United States Government Accountability Office

GAO Report to Congressional Committees

DEFENSE LOGISTICS

Improved Oversight 

and Increased 

Coordination Needed 

to Ensure Viability of 

the Army’s 

Prepositioning 

Strategy 

February 2007 

 

GAO-07-144 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2007

DEFENSE LOGISTICS

Improved Oversight and Increased 

Coordination Needed to Ensure Viability 

of the Army’s Prepositioning Strategy 

Highlights of GAO-07-144, a report to 

congressional committees 

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 solisw@gao.gov. 

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. 

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 longstanding 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. 
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 

Page i GAO-07-144 Defense Logistics
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Page ii GAO-07-144 Defense Logistics
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 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 

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.3

 

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.3

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, GAO-05-427 (Washington, D.C.: 

Sept. 6, 2005). 

Page 1 GAO-07-144 Defense Logistics
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 

 4

 GAO, Defense Logistics: Preliminary Observations on Equipment Reset Challenges and

Issues for the Army and Marine Corps, GAO-06-604T (Washington, D.C.: Mar. 30, 2006).

5 GAO-05-427. 

Page 2 GAO-07-144 Defense Logistics
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. 

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.

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 

Results in Brief 

 6

 The Act (Pub.L. No. 109-163, § 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. 

Page 3 GAO-07-144 Defense Logistics
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. 

The Army faces major strategic and management challenges as it revises 

and implements its prepositioning program, including: 

• 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-

 7

 The new strategy will be the Army Prepositioned Stock Strategy 2013.

Page 4 GAO-07-144 Defense Logistics
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. 

• 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, § 351 (2006). 

9

 GAO, Military Prepositioning: Army and Air Force Programs Need To Be Reassessed, 

GAO/NSIAD-99-6 (Washington, D.C.: Nov. 16, 1998). 

Page 5 GAO-07-144 Defense Logistics
• 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. 

• 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 

 10 Army Regulation 740-1, Storage and Supply Activity Operations (Sept. 9, 2002). 

Page 6 GAO-07-144 Defense Logistics
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. 

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. 

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 

Background 

Page 7 GAO-07-144 Defense Logistics
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. 

• Army Combat brigade sets 

• Are designed to support 3,000 to 5,000 soldiers. 

• Include heavy weaponry such as tanks and Bradley fighting vehicles. 

• Include support equipment such as trucks and High Mobility Multipurpose Wheeled Vehicles. 

• Include spare parts and other sustainment stocks to support the early 

stages of a conflict. 

• War reserve sustainment stocks include 

• Items to sustain the battle unit until resupply can be ramped up to 

wartime levels and arrive in theater.

• War Reserve Secondary Items include rations, clothing and textiles, 

construction and barrier materiel, medical supplies, repair parts, and 

major assemblies (reparables and consumables). 

• Operational project stocks include 

• Authorized material above unit authorizations designed to support 

Army operations or contingencies. 

• Equipment and supplies for special operations forces, bare base sets, 

petroleum and water distribution, mortuary operations, and prisonerof-war operations, among others. 

Page 8 GAO-07-144 Defense Logistics
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. 

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. 

The Army’s April 2006 

Report to Congress 

Addressed the Areas 

Required, But the 

Army’s Strategy is 

Evolving 

Army Report Addresses 

Areas Required by 

Congress 

Page 9 GAO-07-144 Defense Logistics
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. 

Army Prepositioning 

Stocks Strategy 2012 Is No 

Longer Viable 

Page 10 GAO-07-144 Defense Logistics
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 

The Army Faces 

Major Strategic and 

Management 

Challenges As It 

Revises and 

Implements Its 

Prepositioning 

Program 

Alignment between Army’s

Prepositioning Strategy 

and Anticipated DOD 

Strategy Remains 

Uncertain 

Page 11 GAO-07-144 Defense Logistics
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, 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 

Despite Recent Efforts to 

Improve Requirements 

Setting for Secondary Item 

and Operational Project 

Programs, the Army Does 

Not Have Reliable 

Requirements or 

Readiness Information 

Page 12 GAO-07-144 Defense Logistics
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 GAO-05-275. 

12 The RAND Corporation, Sustainment of Army Forces in Operation Iraqi Freedom: 

Major Findings and Recommendations (Santa Monica, Calif.: 2005). 

Page 13 GAO-07-144 Defense Logistics
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 longstanding 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 

Page 14 GAO-07-144 Defense Logistics
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. 

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. 

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 Lacks a 

Comprehensive 

Prepositioning Storage and 

Maintenance Facilities 

Plan 

Outdoor Storage of Equipment 

Results in Millions of Dollars of 

Increased Maintenance Costs 

 13 GAO, Military Prepositioning: Army and Air Force Programs Need To Be Reassessed, 

GAO/NSIAD-99-6 (Washington, D.C.: Nov.16, 1998). 

14 Corrosion is defined under 10 U.S.C. § 2228 as the deterioration of a material or its

properties caused by a reaction of that material with its chemical environment. 

Page 15 GAO-07-144 Defense Logistics
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. 

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 

Source: U.S. Army.

Page 16 GAO-07-144 Defense Logistics
additional $24 million per year per heavy brigade combat team to maintain 

the equipment in outdoor storage. 

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 

Future Facility Requirements 

for the Army Prepositioning 

Program Remain Uncertain 

Page 17 GAO-07-144 Defense Logistics
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. 

Page 18 GAO-07-144 Defense Logistics
Source: U.S. Army.

Brake test 

facility and 

wash rack 

FY04

7 New warehouses

FY05

Ammunition 

storage area

(camp Darby)

FY06

Maintenance 

faciltliy

FY04 Test 

track

FY05

Administration

building

FY04

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. 

Page 19 GAO-07-144 Defense Logistics
Table 1: Status of Facilities at Selected Army Prepositioned Stock Locations 

Location Status

Europe • Military closed three prepositioned sites in Europe at Bettemborg, 

Luxembourg; Eygelshoven, Netherlands; and Hythe, United

Kingdom 

• 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. • The Army is proposing several projects for additional storage and 

improved maintenance capability for the facility 

South Korea • Construction of a new maintenance facility is currently underway at 

Camp Carroll with completion due in November 2007 

• Planning for additional 200,000 sq. ft. storage capability 

• Exploring potential relocation of set to Kwang Yang 

Kuwait • Existing storage facility is currently being used to house Army

Central Command administrative offices, which leaves 

prepositioned assets stored outside 

• Army Materiel Command is considering permanent and temporary 

maintenance and storage capability alternatives to protect 

prepositioned equipment from the harsh desert climate 

Qatar • 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.

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 

Maintenance Oversight of 

Prepositioned Stocks Has 

Improved in South Korea, 

but Needs Improvement in 

Kuwait 

Page 20 GAO-07-144 Defense Logistics
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 assurance15 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. 

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’ 

Conclusions 

 15 Quality assurance inspectors perform a variety of tasks, including initial acceptance of 

repaired equipment from the maintenance contractor and monitoring of contractorperformed preventative maintenance checks.

Page 21 GAO-07-144 Defense Logistics
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. 

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. 

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 

Recommendations for 

Executive Action 

• completes ongoing reevaluation of the secondary item and operational 

project stock requirements as well as establishes systematic readiness 

Page 22 GAO-07-144 Defense Logistics
measurement and reporting of secondary items and operational project 

stock programs, 

• identifies the optimal mix of storage and maintenance facilities at each 

location to support the emerging strategy, and 

• prescribes oversight requirements for the maintenance of prepositioned 

equipment to ensure that equipment is ready for combat. 

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 

Agency Comments 

and Our Evaluation 

Page 23 GAO-07-144 Defense Logistics
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 

Page 24 GAO-07-144 Defense Logistics
Defense Logistics

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 

Page 25 GAO-07-144
Appendix I: Scope and Methodology 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 

Page 26 GAO-07-144 Defense Logistics
Appendix I: Scope and Methodology 

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: 

• U.S. Army Headquarters, Washington, D.C. 

• U.S. Army Material Command, Ft. Belvoir, Virginia. 

• U.S. Army Forces Command, Ft. McPherson, Georgia. 

• U.S. Army Central Command, Ft. McPherson, Georgia. 

• U.S. Army Sustainment Command, Rock Island, Illinois. 

• U.S. Army Europe, Campbell Barracks, Germany. 

• 8th U.S. Army, Yongsan Garrison, South Korea. 

• U.S. Army Field Support Brigade, Seckenheim, Germany. 

• Material Support Center – Korea, Camp Carroll, South Korea. 

• U.S. Army Field Support Battalion – Livorno, Camp Livorno, Italy. 

• U.S. Army Field Support Battalion – Northeast Asia, Camp Carroll, Korea. 

• U.S. Army Field Support Battalion – Southwest Asia, Camp Arifjan, 

Kuwait. 

• U.S. Army Field Support Battalion- Afloat – Charleston, South Carolina. 

Unified Commands 

• U.S. Forces Europe, Patch Barracks, Germany. 

• U.S. Forces Korea, Yongsan Garrison, South Korea. 

• Joint Chiefs of Staff, J-4, Washington, D.C. 

Page 27 GAO-07-144 Defense Logistics
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 

Provide DOD and Congress More 

Visibility Regarding Modular Force 

Capabilities and Implementation 

Plans, GAO-06-745 (September 

2006) 

In September 2006, we reported that the Army had not completed key details of the equipping 

strategy for its modular force and, as a result, it is unclear what level of equipment units will 

have, how this strategy may affect the Army’s equipment 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: Challenges 

Remain to Achieving and 

Demonstrating Progress in Supply 

Chain Management, GAO-06-983T

(July 2006) 

In July 2006, we testified that DOD has continued to make progress implementing the 10

initiatives in its supply chain management improvement plan, but it will 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. 

Appendix II: Past Products Identifying 

Challenges Facing the Army and DOD 

Regarding Prepositioning Programs 

Page 28 GAO-07-144 Defense Logistics
Appendix II: Past Products Identifying

Challenges Facing the Army and DOD

Regarding Prepositioning Programs 

Title Key challenges identified

Force Structure: Capabilities and 

Cost of Army Modular Force Remain

Uncertain, GAO-06-548T (April 2006) 

In April 2006, we testified that although the Army is making progress creating modular units, it 

faces significant 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

Observations on Equipment Reset 

Challenges and Issues for the Army 

and Marine Corps, GAO-06-604T

(March 2006) 

In March 2006, we testified that both the Army and Marine Corps will face a number of 

ongoing and long-term challenges that will affect the timing and cost of equipment 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: High-Level 

Commitment and Oversight Needed 

for DOD Supply Chain Plan to

Succeed, GAO-06-113T (October 

2005) 

In October 2005, we testified that DOD’s plan to improve supply chain management provides a 

good start and framework for addressing long-term systemic weaknesses 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 

Management and Oversight of 

Prepositioning Programs Needed to 

Reduce Risk and Improve Future 

Programs, GAO-05-427 (September 

2005) 

In September 2005, we reported that DOD faced near-term operational risks should another 

large-scale conflict emerge because existing prepositioned stocks had been heavily drawn to 

support operations in Iraq. We noted that some residual 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 Needed to 

Improve the Availability of Critical 

Items during Future Military 

Operations, GAO-05-275 (March 

2005) 

In March 2005, we reported on DOD’s supply-chain management during Operation Iraqi

Freedom. We developed detailed case studies of nine supply items that were reported to be in 

short supply and could 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. 

Page 29 GAO-07-144 Defense Logistics
Appendix II: Past Products Identifying

Challenges Facing the Army and DOD

Regarding Prepositioning Programs 

Title Key challenges identified

High-Risk Series: An Update, GAO05-207 (January 2005) 

In January 2005, we reported that DOD’s 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: Observations 

on Army and Marine Corps Programs 

During Iraqi Freedom and Beyond, 

GAO-04-562T (March 2004) 

In March 2004, we testified that during Operation Iraqi Freedom, the Army’s prepositioning 

program had some equipment that was outdated or did not match unit 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

Observations on the Effectiveness of 

Logistics Activities During Operation 

Iraqi Freedom, GAO-04-305R

(December 2003) 

In December 2003, we reported that during Operation Iraqi Freedom poor asset visibility and 

insufficient and ineffective theater distribution capabilities contributed to substantial logistics 

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 Reporting 

System Is Intended to Address LongStanding Problems, but Better 

Planning Is Needed, GAO-03-456 

(March 2003) 

In March 2003, we reported that DOD used readiness measures that varied 10 percentage

points or more to determine readiness ratings and often did not report the precise 

measurements outside DOD. We 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 and 

Program Risks: Department of

Defense, GAO-03-98 (January 2003) 

In January 2003, we reported that inefficient inventory management practices represented one 

of the most serious 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 

Industrial Base Assessments for 

Army War Reserve Spares Could 

Save Money, GAO-02-650 (July 

2002) 

In July 2002, we reported that the Army’s approach to industrial-base capability assessments 

lacked key attributes that included the collection of current industry 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. 

Page 30 GAO-07-144 Defense Logistics
Appendix II: Past Products Identifying

Challenges Facing the Army and DOD

Regarding Prepositioning Programs 

Title Key challenges identified

Defense Inventory: Army War 

Reserve Spare Parts Requirements 

Are Uncertain, GAO-01-425 (May

2001) 

In May 2001, we reported that notwithstanding the apparent shortfall in funding for war reserve 

spare parts, our 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 and Air 

Force Programs Need To Be 

Reassessed, GAO/NSIAD-99-6 

(November 1998) 

In November 1998, we reported that the Army and Air Force had poorly defined, outdated, or 

otherwise questionable requirements in the major programs that GAO reviewed. The 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 

Equipment Meets the Army’s 

Readiness Goal, GAO/NSIAD-97-169 

(July 1997) 

In July 1997, we reported that of the Army’s unit sets considered when reporting the readiness 

of the brigade set of war reserve equipment; about 25 percent did not 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 

Save Millions by Aligning Resources 

With the Reduced European Mission, 

GAO/NSIAD-97-158 (July 1997) 

In July 1997, we reported that DOD could have saved about $54 million per year in personnel 

costs once the Army removed unneeded war reserve equipment from central Europe and

aligned its resources with the 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: 

Problems, Progress, and Additional 

Actions Needed, GAO/T-NSIAD-97-

109 (March 1997) 

In March 1997, we testified that inventory management problems had plagued DOD for 

decades. We had recently reported that about half of DOD’s secondary inventory was 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.

Page 31 GAO-07-144 Defense Logistics
Appendix II: Past Products Identifying

Challenges Facing the Army and DOD

Regarding Prepositioning Programs 

Table 3: Other Products

Title Key challenges identified

Management of Army Prepositioned 

Stocks. Headquarters, Department of the 

Army, U.S. Army Audit Agency, A2006-

0200-ALL (August 2006) 

In August 2006, the Army Audit Agency reported that U.S. Army Material Command 

management practices for overseeing the Army prepositioned stocks program and 

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 Europe. 

Headquarters, Department of the Army, 

U.S. Army Audit Agency, A2006-0197-

ALE (August 2006) 

In August 2006, the Army Audit Agency reported that the requirements identified in the 

Army’s APS Strategy 2012 would not effectively support responsibilities in 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 Supporting 

Army Prepositioned Stocks in Europe. 

Headquarters, Department of the Army, 

U.S. Army Audit Agency, A2006-0149-

ALE (June 2006) 

In June 2006, the Army Audit Agency reported that the Army was continuing with its 

construction projects at Livorno, Italy, despite elimination of the original requirements for 

the 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) Maritime 

Prepositioning Force (MPF) 

Reconstitution, Regeneration, and 

Reembarkation (R3)Operations: Summary 

Findings, Center for Naval Analyses, CAB 

D0009974.A2/Final (June 2004) 

In June 2004, the Center for Naval Analyses reported that although Marine Corps 

Maritime Prepositioning Force operations in Iraq could be characterized as a success, the 

execution of reconstitution, regeneration, and reembarkation was neither simple nor 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 - Phase II, 

Headquarters, Department of the Army, U. 

S. Army Audit Agency, A-2004-0108-AML 

(February 2004) 

In February 2004, the Army Audit Agency reported that some operational projects—one of 

four categories of Army prepositioned stocks—had (1) invalid 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 Matériel Command (USAMC) 

Operation Iraqi Freedom (OIF) Lessons 

Learned Conference, 10-11 September 

2003, Redstone Arsenal, Alabama 

In September 2003, the U.S. Army Matériel Command sponsored an Operation Iraqi 

Freedom lessons learned conference during which 27 major issues were identified in 

such areas as personnel, supply, maintenance, and distribution. For example (1) supplyrelated 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. 

Page 32 GAO-07-144 Defense Logistics
Appendix II: Past Products Identifying

Challenges Facing the Army and DOD

Regarding Prepositioning Programs 

Title Key challenges identified

Systematic Inspection of the Material 

Condition of Army War Reserve Stocks, 

U.S. Army Matériel Command Inspector 

General (August 2001) 

In August 2001, the Army Matériel Command Inspector General reported the following 

problems with Army war reserve sustainment stocks related to the Army 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 matériel 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) matériel 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 Program, 

Combat Equipment Group - Europe, U.S. 

Army Audit Agency, AA 98-138 (March 

1998) 

In March 1998, the Army Audit Agency reported that while the Army Combat Equipment 

Group properly accounted for 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 Army 

Prepositioned Stock Program, U.S. Army 

Audit Agency, AA 98-99 (February 1998) 

In February 1998, the Army Audit Agency reported that a substantial number of 

undesignated war reserve assets were stored in Europe that could have been used to 

satisfy new sustainment stock requirements. 

Total Asset Visibility-Operational Projects, 

U.S. Army Audit Agency, AA 98-31

(November 1997) 

In November 1997, the Army Audit Agency reported problems in the Total Asset Visibility

capability for Army 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, 

Department of Defense Inspector General, 

97-054 (December 1996) 

In December 1996, the DOD Inspector General reported that the Army had 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.

Page 33 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department Appendix III: Comments from the of Defense 

Department of Defense 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

Page 34 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

Page 35 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

Page 36 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

See comment 1. 

See comment 2. 

Page 37 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

See comment 3. 

See comment 4. 

Page 38 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

See comment 5. 

See comment 6. 

See comment 7. 

Page 39 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

See comment 8. 

See comment 9. 

See comment 10. 

See comment 11. 

Page 40 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

See comment 12. 

See comment 13. 

See comment 14. 

Page 41 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

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. 

GAO’s Responses to 

DOD’s Technical 

Comments: 

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 

Page 42 GAO-07-144 Defense Logistics
Appendix III: Comments from the Department 

of Defense 

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. 

Page 43 GAO-07-144 Defense Logistics
Appendix IV: 

A

GAO Contact and Staff 

cknowledgments 

Page 44 GAO-07-144

Appendix IV: GAO Contact and Staff 

Acknowledgments 

William M. Solis, (202) 512-8365 

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. 

Defense Logistics

GAO Contact 

Acknowledgments 

(350921) 
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