United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Tactical Air 

and Land Forces, Committee on Armed 

Services, House of Representatives

FORCE STRUCTURE

Capabilities and Cost of 

Army Modular Force 

Remain Uncertain 

Statement of Janet St. Laurent 

Director, Defense Capabilities and Management 

For Release on Delivery

Expected at 2:00 p.m. EDT

Tuesday, April 4, 2006

 

GAO-06-548T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 4, 2006

FORCE STRUCTURE

Capabilities and Cost of Army Modular 

Highlights of GAO-06-548T, a testimony Force Remain Uncertain 

before the Subcommittee on Tactical Air 

and Land Forces, Committee on Armed 

Services, House of Representatives 

The Army considers its modular

force transformation the most 

extensive restructuring it has 

undertaken since World War II.

Restructuring the Army from a 

division-based force to a modular 

brigade-based force will require

extensive investments in 

equipment and retraining of

personnel. The foundation of the 

modular force is the creation of

standardized modular combat 

brigades designed to be standalone, self-sufficient units that are

more rapidly deployable and better 

able to conduct joint operations 

than their larger division-based 

predecessors. 

GAO was asked to testify on the

status of the Army’s modularity 

effort. This testimony addresses 

(1) the Army’s cost estimate for 

restructuring to a modular force, 

(2) progress and plans for

equipping modular combat 

brigades, (3) progress made and

challenges to meeting personnel

requirements, and (4) the extent to

which the Army has developed an 

approach for assessing modularity 

results and the need for further 

adjusting designs or 

implementation plans. 

This testimony is based on 

previous and ongoing GAO work

examining Army modularity plans 

and cost. GAO’s work has been 

primarily focused on the Army’s 

active forces. GAO has suggested

that Congress consider requiring

the Secretary of Defense to provide 

a plan for overseeing spending of

funds for modularity. 

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. Moreover, the Army has not provided 

sufficient information for the Department of Defense and congressional 

decision makers to assess the capabilities, costs, affordability, and risks of 

the Army’s modular force implementation plans. The Army’s cost estimate 

for completing modular force restructuring by 2011 has grown from an initial 

rough order of magnitude of $28 billion in 2004 to $52.5 billion currently. 

Although the Army’s most recent estimate addresses some shortcomings of 

its earlier estimate, it is not clear to what extent the Army can achieve

expected capabilities within its cost estimate and planned time frames for 

completing unit conversions. Moreover, according to senior Army officials,

the Army may request additional funds for modularity beyond 2011. 

Although modular conversions are under way, the Army is not meeting its 

near-term equipping goals for its active modular combat brigades, and units 

are likely to have shortfalls of some key equipment until at least 2012. The 

Army plans to mitigate risk in the near term by providing priority for 

equipping deploying units and maintaining other units at lower equipping 

levels. However, it has not yet defined specific equipping plans for units in 

various phases of its force rotation model. As a result, it is unclear what level 

of equipment units will have and how well units with low priority for 

equipment will be able to respond to unforeseen crises. 

In addition, the Army faces significant challenges in implementing its plan to 

reduce overall active component end strength from 512,400 to 482,400 

soldiers by fiscal year 2011 while increasing the size of its modular combat 

force from 315,000 to 355,000. This will require the Army to eliminate or 

realign many positions in its noncombat force. The Army has made some 

progress in reducing military personnel in noncombat positions through 

military civilian conversions and other initiatives, but some of its goals for 

these initiatives may be difficult to meet and could lead to difficult tradeoffs. Already the Army does not fully plan to fill some key intelligence 

positions required by its new modular force structure. 

Finally, 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. The Army has not established 

outcome-related metrics linked to many of its modularity objectives. 

Further, although the Army 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. 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. 

www.gao.gov/cgi-bin/getrpt? GAO-06-548T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Janet St. 

Laurent at (202) 512-4402 or 

stlaurentj@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here to discuss our ongoing work on the Army’s plans 

for restructuring into a modular brigade-based force. In 2004, the Army 

began its modular force transformation to restructure itself from a 

division-based force to a modular brigade-based force—an undertaking it 

considers the most extensive reorganization of its force since World War 

II. This restructuring will require a significant investment of billions of 

dollars at a time when the Army is developing other high-cost capabilities, 

such as the Future Combat Systems.1

 For example, the administration 

requested $6.6 billion for modularity as part of its fiscal year 2007 budget 

request. The foundation of the modular force is the creation of

standardized modular brigade combat teams designed to be stand-alone,

self-sufficient units that are more rapidly deployable and better able to 

conduct joint and expeditionary operations than their larger divisionbased predecessors. The Army plans to achieve its modular restructuring 

without permanently increasing its active component end strength above 

482,400 soldiers, primarily by eliminating some noncombat positions in 

which military personnel currently serve, and transferring these positions 

to its operational combat forces.2

 The February 2006 Quadrennial Defense

Review (QDR) specified that the Army would create 70 modular combat 

brigades in its active component and National Guard. This represents a 7-

brigade reduction from the Army’s original plan of having 77 modular 

combat brigades. However, according to Army officials, resources from 

the 7 brigades subtracted from the original plan will be used to increase 

support units in the reserve component, and Department of Defense 

(DOD) officials believe that 70 brigades will be sufficient to execute the 

defense strategy. 

For this hearing, you asked us to update our March 2005 testimony before 

this committee, in which we provided preliminary observations on the 

Army’s plan to implement and fund modular forces.3

 At that time we 

 1

 Future Combat Systems is a program that consists of a family of systems composed of 

advanced network combat and sustainment systems, unmanned ground and air vehicles,

and unattended sensors and munitions. 

2

 Army personnel assigned to noncombat positions provide management, administrative, 

training, and other support. Operational combat forces include personnel assigned to the

Army’s combat, combat support, and combat service support units, including the modular

brigade combat teams. 

3

 GAO, Force Structure: Preliminary Observations on Army Plans to Implement and

Fund Modular Forces, GAO-05-443T (Washington, D.C.: Mar. 16, 2005).

Page 1 GAO-06-548T 
observed that because the Army is undertaking this effort while executing 

operations in Iraq, Afghanistan, and elsewhere and developing other new 

capabilities, such as the Future Combat Systems, DOD may face some 

long-term affordability challenges as it moves forward with these and 

other initiatives. Since that hearing, in September 2005 we issued a report

on the costs of modularity, and we are drafting a report on the Army’s 

plans for modularity, which we expect to issue this spring.4

 Specifically, 

my testimony today will address (1) the Army’s cost estimates for 

restructuring to a modular force, (2) the Army’s progress and plans for 

equipping modular combat brigades, (3) progress made and challenges to 

managing personnel requirements of the modular force, and (4) the extent 

to which the Army has developed an approach for assessing 

implementation of modularity and for further adjusting designs or 

implementation plans. 

My testimony is based on both our September 2005 report on cost issues 

and on our past and ongoing work examining the Army’s plans for 

implementing modularity. For our ongoing work, we interviewed officials 

and obtained documents from Headquarters, Department of the Army; U.S. 

Army Training and Doctrine Command; and U.S. Army Forces Command 

to determine the Army’s modular force implementation plans, 

organizational design requirements and supporting analysis, equipment 

and personnel requirements for the brigade combat teams, and plans for 

equipping and staffing modular brigade combat teams to the required 

levels. We visited the first three Army divisions undergoing modular 

conversions to obtain information on the plans for organizing, staffing, and 

equipping the modular brigades and discussed modular force support 

requirements with officials from the U.S. Army Center for Army Analysis. 

To assess the Army’s cost estimates, we updated our September 2005 

report with information from the fiscal year 2007 President’s Budget 

request and discussions with Army officials about implications of the QDR 

on the cost of modular restructuring. To address equipment plans and 

status, we analyzed Department of the Army data on selected equipment

the Army identified as essential for achieving the modular combat 

brigades, required operational capabilities and reviewed unit readiness 

reports from those brigades that had completed or were in the process of

completing their modular conversion as of February 2006. To assess 

personnel plans, we discussed the implications of force structure changes 

 4

 GAO, Force Structure: Actions Needed to Improve Estimates and Oversight of Costs for 

Transforming Army to a Modular Force, GAO-05-926 (Washington, D.C.: Sept. 29, 2005).

Page 2 GAO-06-548T 
and plans for eliminating noncombat positions with officials from the 

Department of the Army Deputy Chiefs of Staff for Personnel (G1) and 

Intelligence (G2). Finally, to assess the framework for assessing 

modularity implementation, we examined key Army planning documents 

and discussed objectives, performance metrics, and testing plans with 

appropriate officials in the Department of the Army Headquarters, 

especially officials from the Deputy Chief of Staff for Operations and 

Training (G3) and the Training and Doctrine Command. In addition, we 

relied on our past reports assessing organizations undertaking significant 

reorganizations. We conducted our work from May 2005 through March 

2006 in accordance with generally accepted government auditing 

standards and determined that the data used were sufficiently reliable for 

our objectives. 

The Army is making progress converting active Army combat units to the 

new modular structure at a time of war. The Army’s goals for increasing 

combat power while introducing predictability in deployments for its 

soldiers are important, and the Army leadership in headquarters, military 

and civilian staffs, and operational and support units throughout the Army 

have dedicated considerable attention, energy, and time to achieving these 

goals under tight time frames. However, the Army faces significant 

challenges in executing its modularity plans to fully achieve planned 

capabilities within the time frames it established. In short, because of 

uncertainties in cost, equipment, and personnel plans and the absence of a 

comprehensive approach for assessing modularity results, we do not 

believe decision makers have sufficient information to assess the 

capabilities, costs, and risks posed by the transformation to a modular 

force. I will now turn to our four main issues. 

Summary 

First, the lack of clarity in the Army’s cost estimates for modularity may 

limit the Secretary of Defense and Congress’s ability to weigh competing 

funding priorities. The Army’s cost estimate through fiscal year 2011 has 

increased from an initial rough order of magnitude estimate of $28 billion 

in 2004 to $52.5 billion currently. Of this $52.5 billion estimate, $41 billion,

or 78 percent, has been allocated to equipment, with the remaining 

$11.5 billion allocated to military construction, facilities, sustainment, and 

training. Although the estimate has grown, the Army’s rationale for 

allocating dollar amounts to specific aspects of modularity has not become 

more transparent. For example, it is not clear how the Army will 

distinguish between costs associated with modularity and the costs 

associated with modernizing equipment or restoring equipment used 

during ongoing operations. In addition, despite recent force structure 

Page 3 GAO-06-548T 
changes, schedule changes, and design refinements, the Army has not 

updated its cost estimate or funding plan. Moreover, the Army may seek 

additional funding after 2011 to buy equipment required for modular 

restructuring. In short, it is not clear what level of capability the Army will 

achieve with the $52.5 billion it plans to spend on its modular restructuring 

through fiscal year 2011. As a result, decision makers may not have 

adequate information on which to weigh competing demands for funding.

Second, while the Army is well under way in creating active component 

modular combat brigades, it is not meeting its equipping goals for these 

brigades and is still developing its equipping strategy, raising considerable 

uncertainty as to the levels of equipment they will have in both the near 

term and longer term. Although active modular combat brigades are 

receiving considerable quantities of equipment, they will initially lack 

required quantities of items such as communications systems that are key 

for providing the enhanced intelligence, situational awareness, and 

network capabilities needed to help match the combat power of the 

Army’s former brigade structure. The Army will likely face even greater 

challenges fully equipping 28 planned National Guard modular combat 

brigades since the National Guard has historically been underequipped. To

mitigate equipment shortages, the Army is developing an equipping 

strategy that will provide varying levels of equipment to brigades 

depending on their phase of readiness—that is, whether the brigades are 

available for deployment, training for deployment, or returning from 

deployment. However, the Army has not yet defined specific equipping

plans for brigades in each of the various readiness phases. Until the Army 

completes development of its equipping strategy, the Secretary of Defense

and Congress will not be in a good position to assess the Army’s 

equipment requirements and the level of risk associated with the Army’s 

plans. 

Third, while the Army has made some progress meeting modular 

personnel requirements in the active component by shifting positions from

its noncombat force to its operational combat force, it faces significant 

challenges in meeting its goal to reduce its overall active end strength to 

482,400, as specified by the QDR, while increasing the size of its modular 

combat force. The Army has developed initiatives to reduce and realign its 

end strength, but some of these initiatives may not meet the Army’s initial 

expectations. In addition, the Army does not plan to fill some key 

intelligence positions required by its new modular force structure design

in part because of the requirement to reduce overall end strength. Without 

continued, significant progress in meeting personnel requirements, the 

Army may need to accept increased risk in its ability to conduct 

Page 4 GAO-06-548T 
operations and support its combat forces or it may need to seek support 

for an end strength increase from DOD and Congress. 

Finally, the Army lacks a comprehensive and transparent approach to 

effectively measure progress against stated modularity objectives, assess 

the need for further changes to its modular unit designs, and monitor 

implementation plans. GAO and DOD have identified the importance of 

establishing objectives that can be translated into measurable metrics, 

which in turn provide accountability for results. The Army has identified 

objectives for modularity, but metrics for assessing the Army’s progress on

modularity-specific goals are extremely limited. In 2004, the Army’s 

Training and Doctrine Command (TRADOC) conducted a wide-ranging 

baseline analysis of the modular design using measures of effectiveness; 

however, the Army does not have a long-term plan to conduct similar 

analysis so that it can compare the performance of actual modular units 

with the TRADOC-validated design. Without performance metrics and a 

comprehensive testing plan, neither Army nor congressional leaders will 

be able to assess the capabilities of and risks associated with the modular 

force as it is currently organized, staffed, and equipped. 

The Army’s conversion to a modular force encompasses the Army’s total 

force—active Army, Army National Guard, and Army Reserve—and 

directly affects not only the Army’s combat units, but related command 

and support organizations. A key to the Army’s new modular force design

is embedding within combat brigades battalion-sized, reconnaissance, 

logistics, and other support units that previously made up parts of 

division-level and higher-level command and support organizations, 

allowing the brigades to operate independently. Restructuring these units 

is a major undertaking because it requires more than just the movement of 

personnel or equipment from one unit to another. The Army’s new 

modular units are designed, equipped, and staffed differently than the 

units they replace; therefore successful implementation of this initiative 

will require changes such as new equipment and a different mix of skills 

and occupational specialties among Army personnel. By 2011, the Army 

plans to have reconfigured its total force—to include active and reserve 

components and headquarters, combat, and support units—into the 

modular design. The foundation of the modular force is the creation of 

modular brigade combat teams—combat maneuver brigades that will have 

a common organizational design and will increase the rotational pool of 

ready units. Modular combat brigades will have one of three standard 

designs—heavy brigade combat team, infantry brigade combat team, and 

Stryker brigade combat team. 

Background 

Page 5 GAO-06-548T 
Until it revised its plans in March 2006, the Army had planned to have a 

total of 77 active component and National Guard modular combat brigades 

by expanding the existing 33 combat brigades in the active component into 

43 modular combat brigades by 2007, and by creating 34 modular combat 

brigades in the National Guard by 2010 from existing brigades and 

divisions that have historically been equipped well below requirements. To 

rebalance joint ground force capabilities the 2006 QDR determined the 

Army should have a total of 70 modular combat brigades—42 active 

brigades and 28 National Guard brigades. Also in March 2006, the Army 

was in the process of revising its modular combat brigade conversion 

schedule; it now plans to convert its active component brigades by fiscal 

year 2010 instead of 2007 as previously planned, and convert National 

Guard brigades by fiscal year 2008 instead of 2010. As of March 2006 the

Army had completed the conversion of 19 active component brigades to 

the modular design and was in the process of converting 2 active and 7 

National Guard brigades. Table 1 shows the Army’s schedule as of March 

2006 for creating active component and National Guard modular combat 

brigades. 

Table 1: Army Schedule for Creating Active Component and National Guard 

Modular Combat Brigades as of March 2006 

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Total

Active component 

combat brigades 

2 11 8 14 3 2 1 1 42

National Guard

combat brigades 

— — 7 7 7 7 — — 28

Total 2 11 15 21 10 9 1 1 70

Source: GAO analysis of Army data. 

According to the Army, this larger pool of available combat units will 

enable it to generate both active and reserve component forces in a 

rotational manner that will support 2 years at home following each 

deployed year for active forces. To do this, the Army has created a 

rotational force generation model in which units rotate through a 

structured progression of increased unit readiness over time. Units will 

progress through three phases of operational readiness cycles, culminating 

in full mission readiness and availability to deploy. 

The Army’s objective is for the new modular combat brigades, which will 

include about 3,000 to 4,000 personnel, to have at least the same combat 

capability as a brigade under the current division-based force, which range 

from 3,000 to 5,000 personnel. Since there will be more combat brigades in 

Page 6 GAO-06-548T 
the force, the Army believes its overall combat capability will be increased 

as a result of the restructuring, providing added value to combatant 

commanders. Although somewhat smaller in size, the new modular 

combat brigades are expected to be as capable as the Army’s existing 

brigades because they will have different equipment, such as advanced 

communications and surveillance equipment, and a different mix of 

personnel and support assets. The Army’s organizational designs for the 

modular brigades have been tested by its Training and Doctrine 

Command’s Analysis Center against a variety of scenarios, and the Army 

has found the new designs to be as capable as the existing division-based

brigades in modeling and simulations. 

The Army’s cost estimate for modularity has continued to evolve since our 

September 2005 report.5

 As we reported, the Army’s cost estimate for 

transforming its force through fiscal year 2011 increased from $28 billion 

in the summer of 2004 to $48 billion in the spring of 2005. The latter 

estimate addressed some of the shortcomings of the initial rough order of 

magnitude estimate and included lessons learned from operations in Iraq. 

For example, it included costs of restructuring the entire force, to include

77 brigade combat teams, as well as the creation of support and command 

units. However, it excluded some known costs. For example, the 

$48 billion estimate did not include $4.5 billion in construction costs the 

Army plans to fund through business process engineering efficiencies, 

which historically have been difficult to achieve. The Army added these 

costs when it revised its cost estimate in March 2006, bringing the most 

recent total to $52.5 billion. As shown in table 2, most of the planned 

funding for modularity—$41 billion, or about 78 percent—will be used to

procure equipment, with the remaining funds divided between military 

construction and facilities and sustainment and training. In addition, Army 

leaders have recently stated they may seek additional funds after 2011 to 

procure additional equipment for modular restructuring. 

Lack of Clarity in

Army’s Cost Estimate 

for Modularity Limits 

Decision Makers’ 

Ability to Weigh 

Funding Priorities 

 5 GAO-05-926. 

Page 7 GAO-06-548T 
Table 2: Modular Force Cost Estimates for the Entire Army by Function 

Dollars in billions 

2005 2006 2007 2008 2009 2010 2011 Total Percentage

Equipping $4.7 $5.8 $5.4 $5.9 $6.5 $6.7 $6.0 $41.0 78

Military 

construction/ 

facilities 

0.3 0.0 0.5 0.5 1.5 1.5 1.5 5.8 11

Sustainment 

and training 

0.0 0.7 0.7 1.2 1.1 1.0 1.0 5.7 11

Total $5.0 $6.5 $6.6 $7.6 $9.1 $9.2 $8.5 $52.5 100

Source: GAO analysis of Army data. 

In our September report, we highlighted uncertainties related to force 

design, equipment, facilities, and personnel that could drive costs higher. 

Some of these uncertainties have been clarified. For example, we noted 

that costs in equipment and facilities would increase significantly if the 

Secretary of Defense decided to add 5 brigades to the Army’s active 

component to create a total of 48 brigade combat teams—a decision that 

was scheduled to be made in fiscal year 2006. The decision about the 

number of brigades was made based on the QDR. Instead of a 5 brigade 

combat team increase, the report stated that the Army would create a total 

of 42 such brigades in the active component, a 1 brigade combat team 

reduction from the Army’s plan. In addition, the number of National Guard 

brigade combat teams was reduced from 34 to 28. In sum, the QDR 

decisions reduced the number of planned brigade combat teams from 77 

to 70. However, Army officials stated that the Army plans to fully staff and 

equip these units. Moreover, Army officials told us that the Army plans to 

use resources freed up by this decision to increase support units in the 

reserve component and to fund additional special operations capability in 

the active component. We also noted in our September 2005 report that 

the Army had not completed designs for all the support units at the time 

the estimate was set. According to Army officials, these designs have been

finalized. Despite these refinements to the design and changes to the 

planned number of combat and support brigades, the Army has not made 

revisions to its $52.5 billion cost estimate or funding plan based on these 

changes. 

Moreover, as I will discuss shortly, uncertainty remains in the Army’s 

evolving strategy for equipping its modular combat brigades. As a result, 

based on discussions with Army officials, it remains unclear to what 

extent the $41 billion will enable the Army to equip units to levels in the 

Page 8 GAO-06-548T 
Army’s tested design. In addition, it is not clear how the Army will 

distinguish between modularity, costs associated with restoring equipment 

used in operations, or modernizing equipment. In estimating its equipment 

costs for modularity, the Army assumed that some equipment from 

ongoing operations would remain in operational condition for 

redistribution to new and restructured modular units. To the extent 

equipment is not returned from operations at assumed rates, it is not clear 

how this will affect equipping levels of modular units or how the Army 

would pay for such equipment. As a result, the Secretary of Defense and

Congress may not be in a sound position to weigh competing demands for 

funding and assess whether the Army will be able to fully achieve planned 

capabilities for the modular force by 2011 within the planned funding 

level. 

The Army has made progress in creating active component modular 

combat brigades, but it is not meeting its equipping goals for these 

brigades and is still developing its overall equipping strategy, which raises 

concerns about the extent to which brigades will be equipped in the near 

and longer term. While active brigades are receiving significant amounts of 

new equipment, Army officials indicated that they may seek additional 

funding for equipment beyond 2011. Moreover, brigades will initially lack 

key equipment, including items that provide enhanced intelligence, 

situational awareness, and network capabilities needed to help the Army 

achieve its planned capabilities of creating a more mobile, rapidly 

deployable, joint, expeditionary force. In addition, because of existing 

equipment shortages, the Army National Guard will likely face even 

greater challenges providing the same types of equipment for its 28 

planned modular combat brigades. To mitigate equipment shortages, the 

Army plans to provide priority for equipment to deploying active 

component and National Guard units but allocate lesser levels of 

remaining equipment to other nondeploying units based on their 

movement through training and readiness cycles. However, the Army has 

not yet determined the levels of equipment it needs to support this 

strategy, assessed the operational risk of not fully equipping all units, or 

provided to Congress detailed information about these plans so it can 

assess the Army’s current and long-term equipment requirements and 

funding plans. 

Although the Army Is 

Well Under Way in Its 

Active Modular 

Combat Brigade 

Conversions, Its

Ability to Meet Its 

Equipping Goals by 

2011 Is Unclear 

Page 9 GAO-06-548T 
The Army faces challenges meeting its equipping goals for its modular 

brigades both in the near and longer term. As of February 2006, the Army 

had converted 19 modular combat brigades in the active force. According 

to the Army Campaign Plan, which established time frames and goals for 

the modular force conversions, each of these units individually is expected 

to have on hand at least 90 percent of its required major equipment items 

within 180 days after its new equipment requirements become effective.

6

We reviewed data from several brigades that had reached the effective 

date for their new equipment requirements by February 2006, and found

that all of these brigades reported significant shortages of equipment 180 

days after the effective date of their new equipment requirements, falling 

well below the equipment goals the Army established in its Campaign 

Plan. Additionally, the Army is having difficulty providing equipment to 

units undergoing their modular conversion in time for training prior to 

operational deployments, and deploying units often do not receive some of 

their equipment until after their arrival in theater. At the time of our visits, 

officials from three Army divisions undergoing modular conversion 

expressed concern over the lack of key equipment needed for training 

prior to deployment. 

Army Facing Difficulty 

Meeting Its Goals for 

Equipping Active Modular 

Combat Brigades 

The Army already faced equipment shortages before it began its modular 

force transformation and is wearing out significant quantities in Iraq, 

which could complicate plans for fully equipping new modular units. By 

creating modular combat brigades with standardized designs and 

equipment requirements, the Army believed that it could utilize more of its 

total force, thereby increasing the pool of available and ready forces to 

meet the demands of sustained rotations and better respond to an 

expected state of continuous operations. Also, by comparably equipping 

all of these units across the active component and National Guard, the 

Army further believes it will be able to discontinue its practice of 

allocating limited resources, including equipment, based on a system of 

tiered readiness,7

 which resulted in lower-priority units in both active and 

 6

 The Army defines this in its Campaign Plan as the effective date on which the new 

modular organizational designs’ equipment requirements formally apply to converting

brigades. The Army calls this a Modified Table of Organization and Equipment, which 

documents the specific types and amounts of equipment Army units are authorized to have.

7

 Under this model, which the Army calls its tiered readiness system, high priority or first to 

deploy units in the active component received much higher levels of resources than lower

priority or later deploying active and reserve component units. While some units 

maintained high levels of readiness, a large part of both the active and reserve components 

were in a low state of readiness with the expectation that there would be sufficient time to 

add the required resources prior to deployment. 

Page 10 GAO-06-548T 
reserve components having significantly lower levels of equipment and 

readiness than the higher priority units. However, because of the need to 

establish a larger pool of available forces to meet the current high pace of 

operational commitments, the Army’s modular combat brigade conversion 

schedule is outpacing the planned acquisition or funding for some 

equipment requirements. The Army has acknowledged that funding does 

not match its modular conversion schedule and that some units will face 

equipment shortages in the early years of transformation. The Army says it 

will manage these shortfalls; however, according to Army officials, the 

Army may continue to seek modular force equipment funding beyond 2011 

and may exceed its $52.5 billion modularity cost estimate. 

Equipment Shortages 

Include Key Equipment the 

Army Identified as 

Essential for Achieving 

Modular Force Capabilities 

Active modular combat brigades will initially lack required numbers of 

some of the key equipment that Army force design analyses determined 

essential for achieving their planned capabilities. Army force designers 

identified a number of key organizational, personnel, and equipment 

enablers they determined must be present for the modular combat 

brigades to be as lethal as the division-based brigades they are replacing,

achieve their expected capabilities, and function as designed. Essential 

among these is the equipment that will enable the modular combat 

brigades to function as stand-alone, self-sufficient tactical forces, capable

of conducting and sustaining operations on their own if required without 

also deploying large numbers of support forces. They include battle 

command systems to provide modular combat brigades the latest 

command and control technology for improved situational awareness; 

advanced digital communications systems to provide secure high-speed 

communications links; and advanced sensors, providing modular combat 

brigades their own intelligence-gathering, reconnaissance, and target 

acquisition capabilities. 

We reviewed several command and control, communications, and 

reconnaissance systems to determine the Army’s plans and timelines for 

providing active modular combat brigades some of the key equipment they 

need to achieve their planned capabilities and function as designed. 

According to Army officials responsible for managing the distribution and

fielding of equipment, in 2007 when 38 of 42 active component modular 

combat brigades are to complete their modular conversions, the Army will 

not have all of this equipment onhand to meet the new modular force 

design requirements. These shortfalls are due to a range of reasons, but 

primarily because the modular conversion schedule is outpacing the 

planned acquisition or funding. For example, the Army does not expect to

meet until at least 2012 its modular combat brigade requirements for LongPage 11 GAO-06-548T 
Range Advanced Scout Surveillance Systems, an advanced visual sensor 

that provides long-range surveillance capability to detect, recognize, and 

identify distant targets. In addition, because of an Army funding decision, 

the Army only plans to meet 85 percent of its requirements across the 

force for Single Channel Ground and Airborne Radio Systems, a command 

and control network radio system that provides voice and data 

communications capability in support of command and control operations.

Finally, a recent DOD decision could set back the Army’s schedule for the 

acquisition of Joint Network Node, a key communications system that 

provides secure high-speed computer network connection for data 

transmission down to the battalion level, including voice, video, and email. According to Army officials, DOD recently decided to require the 

Army to have Joint Network Node undergo developmental and operational 

testing prior to further acquisition, which could delay equipping active and 

National Guard modular combat brigades. 

National Guard Faces 

Significant Equipping 

Challenges 

In addition to the challenges the Army faces in providing active 

component modular combat brigades the equipment necessary for meeting 

expected capabilities, the Army will face greater challenges meeting its 

equipping requirements for its 28 planned National Guard combat 

brigades. The Army’s modular force concept is intended to transform the 

National Guard from a strategic standby force to a force that is to be 

organized, staffed, and equipped comparable to active units for 

involvement in the full range of overseas operations. As such, Guard 

combat units will enter into the Army’s new force rotational model in 

which, according to the Army’s plans, Guard units would be available for

deployment 1 year out of 6 years. However, Guard units have previously 

been equipped at less than wartime readiness levels (often at 65 to 75

percent of requirements) under the assumption that there would be 

sufficient time for Guard forces to obtain additional equipment prior to 

deployment. Moreover, as of July 2005, the Army National Guard had 

transferred more than 101,000 pieces of equipment from nondeploying 

units to support Guard units’ deployments overseas. As we noted in our

report last year on National Guard equipment readiness,8

 National Guard 

Bureau officials estimated that the Guard’s nondeployed units had only 

about 34 percent of their essential warfighting equipment as of July 2005 

 8

 GAO, Reserve Forces: Plans Needed to Improve Army National Guard Equipment 

Readiness and Better Integrate Guard into Army Force Transformation Initiatives, 

GAO-06-111 (Washington, D.C.: Oct. 4, 2005). 

Page 12 GAO-06-548T 
and had exhausted inventories of 220 critical items. Although the Army 

says it plans to invest $21 billion into equipping and modernizing the 

Guard through 2011, Guard units will start their modular conversions with 

less and much older equipment than most active units. This will add to the 

challenge the Army faces in achieving its plans and timelines for equipping

Guard units at comparable levels to active units and fully meeting the 

equipping needs across both components. Moreover, the Army National 

Guard believes that even after the Army’s planned investment, the Army 

National Guard will have to accept risk in certain equipment, such as 

tactical wheeled vehicles, aircraft, and force protection equipment. 

To Mitigate Equipment 

Shortages, Army Plans to 

Rotate Equipment among 

Units Based on Their 

Movement through 

Training, Readiness, and 

Deployment Cycles 

Because the Army realized that it would not have enough equipment in the 

near term to simultaneously equip modular combat brigades at 100 percent 

of their requirements, the Army is developing a new equipping strategy as 

part of its force rotation model; however, it has not yet determined 

equipping requirements for this new strategy. Under the force rotation 

model, the Army would provide increasing amounts of equipment to units 

as they move through training phases and near readiness for potential 

deployment so they would be ready to respond quickly if needed with fully 

equipped forces. The Army believes that over time, equipping units in a 

rotational manner will enable it to better allocate available equipment and 

help manage risk associated with specific equipment shortages. 

Under this strategy, brigades will have three types of equipment sets—a 

baseline set, a training set, and a deployment set. The baseline set would 

vary by unit type and assigned mission and the equipment it includes could

be significantly reduced from the amount called for in the modular brigade 

design. Training sets would include more of the equipment units will need 

to be ready for deployment, but units would share the equipment that 

would be located at training sites throughout the country. The deployment 

set would include all equipment needed for deployment, including theaterspecific equipment, high-priority items provided through operational 

needs statements, and equipment from Army prepositioned stock. With 

this cyclical equipping approach, the Army believes it can have from 12 to 

16 active combat brigades and from 3 to 4 Army National Guard combat 

brigades equipped and mission ready at any given time. 

However, the Army has not yet determined equipping requirements for 

units as they progress through the rotational cycles. While the Army has 

developed a general proposal to equip both active and Army National 

Guard units according to the readiness requirements of each phase of the

rotational force model, it has not yet detailed the types and quantities of 

Page 13 GAO-06-548T 
items required in each phase. We noted in our October 2005 report on 

Army National Guard equipment readiness9

 that at the time of the report, 

the Army was still developing the proposals for what would be included in

the three equipment sets and planned to publish the final requirements in 

December 2005. However, as of March 2006 the Army had not decided on 

specific equipping plans for units in the various phases of its force rotation

model. 

Because the Army is early in the development of its rotational equipping

strategy and has not yet defined specific equipping plans for units as they 

progress through rotational cycles, the levels of equipment the deploying 

and nondeploying units would receive are currently not clear. Therefore, it 

is difficult to assess the risk associated with decreasing nondeploying 

units’ readiness to perform other missions or the ability of units in the 

earlier stages of the rotational cycle to respond to an unforeseen crisis if 

required. 

The Army has made some progress meeting modular personnel 

requirements in the active component by shifting positions from its 

noncombat force to its operational combat force but faces significant 

challenges reducing its overall end strength while increasing the size of its 

modular combat force. The Army plans to reduce its current end strength

of 512,400, based upon a temporary authorized increase,10 to 482,400 

soldiers by 2011 in order to help fund the Army’s priority acquisition 

programs. Simultaneously, the Army plans to increase the number of 

soldiers in its combat force from approximately 315,000 to 355,000 in order 

to meet the increased personnel requirements of its new larger modular 

force structure. The Army plans to utilize several initiatives to reduce and 

realign the Army with the aim of meeting these planned manpower levels. 

The Army Faces 

Challenges in 

Managing Personnel 

Requirements for Its 

New Modular Force 

Structure 

For example, the Army has experienced some success in converting 

nonoperational military positions into civilian positions, thereby freeing up 

soldiers to fill modular combat brigades’ requirements. During fiscal year 

 9 GAO-06-111. 

10 The National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, § 401

(Jan. 6, 2006), sets the end strength level for the Army at 512,400 but stipulates costs of 

active duty personnel of the Army for that fiscal year in excess of 482,400 shall be paid out 

of funds authorized to be appropriated for that fiscal year for a contingent emergency 

reserve fund or as an emergency supplemental appropriation. 

Page 14 GAO-06-548T 
2005, the Army converted approximately 8,000 military positions to 

civilian-staffed positions within the Army’s institutional force. However, 

officials believe additional conversions will be more challenging to 

achieve. In addition to its success with the military-to-civilian conversions, 

the Army has been given statutory authority to reduce active personnel 

support to the National Guard and Reserves by 1,500.11 However, the Army 

must still eliminate additional positions, utilizing these and other 

initiatives, so it can reduce its overall end strength while filling 

requirements for modular units. 

While the Army is attempting to reduce end strength and realign positions

to the combat force via several initiatives, it may have difficulty meeting 

its expectations for some initiatives. For example, the Army expected that

the Base Realignment and Closure (BRAC) decisions of 2005 could free up 

approximately 2,000 to 3,000 positions in the institutional Army, but the 

Army is revisiting this assumption based upon updated manpower levels at 

the commands and installations approved for closure and consolidation. 

Army officials believe they will be able to realign some positions from 

BRAC, but it is not clear whether the reductions will free up 2,000 to 3,000 

military personnel. In the same vein, Army officials expected to see 

reductions of several hundred base support staff resulting from 

restationing forces currently overseas back to garrisons within the United

States. However, Army officials are still attempting to determine if the 

actual savings will meet the original assumptions. 

In addition, the Army’s new modular force structure increases 

requirements for military intelligence specialists, but according to Army 

officials the Army will not be able to fully meet these requirements. The 

modular force requires the Army to adjust the skill mix of its operational 

force by adding 8,400 active component intelligence specialist positions to 

support its information superiority capability—considered a key enabler 

of modular force capabilities. However, the Army plans to fill only about 

57 percent of these positions by 2013 in part because of efforts to reduce 

overall end strength. According to Army officials, despite these shortfalls, 

intelligence capability has improved over that of the previous force; 

however, shortfalls in filling intelligence requirements have stressed 

intelligence specialists with a high tempo of deployments. However, since

 11 The Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L.

No. 108-375, § 515 (Oct. 28, 2004) reduces the minimum number of active component 

advisors required to be assigned to units of the selected reserve from 5,000 to 3,500. 

Page 15 GAO-06-548T 
intelligence was considered a key enabler of the modular design—a 

component of the new design’s improved situational awareness—it is 

unclear how this shortage in planned intelligence capacity will affect the 

overall capability of modular combat brigades. 

If the Army is unable to transfer enough active personnel to its combat 

forces while simultaneously reducing its overall end strength, it will be 

faced with a difficult choice. The Army could accept increased risk to its 

operational units or nonoperational units that provide critical support, 

such as training. Alternatively, the Army could ask DOD to seek an end 

strength increase and identify funds to pay for additional personnel. 

However, DOD is seeking to reduce end strength in all the services to limit 

its personnel costs and provide funds for other priorities. 

The Army lacks a comprehensive and transparent approach to effectively

measure its progress against stated modularity objectives, assess the need 

for further changes to its modular unit designs, and monitor 

implementation plans. 

The Army Has 

Objectives and Time 

Frames for 

Modularity but Lacks 

Performance Metrics 

to Measure Progress 

Army Lacks Performance 

Metrics to Measure the 

Results of Modularity 

GAO and DOD, among others, have identified the importance of 

establishing objectives that can be translated into measurable, resultsoriented metrics, which in turn provide accountability for results. In a 2003 

report we found that the adoption of a results-oriented framework that 

clearly establishes performance goals and measures progress toward those 

goals was a key practice for implementing a successful transformation.12

DOD has also recognized the need to develop or refine metrics so it can 

measure efforts to implement the defense strategy and provide useful 

information to senior leadership. 

The Army considers the Army Campaign Plan to be a key document 

guiding the modular restructuring. The plan provides broad guidelines for 

 12 GAO, Results-Oriented Cultures: Implementation Steps to Assist Mergers and

Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003). 

Page 16 GAO-06-548T 
modularity and other program tasks across the entire Army. However, 

modularity-related metrics within the plan are limited to a schedule for 

creating modular units and an associated metric of achieving unit 

readiness goals for equipment training and personnel by certain dates after 

unit creation. Moreover, a 2005 assessment by the Office of Management 

and Budget identified the total number of brigades created as the only 

metric the Army has developed for measuring the success of its modularity 

initiative. Another key planning document, the 2005 Army Strategic

Planning Guidance, identified several major expected advantages of 

modularity, including an increase in the combat power of the active 

component force by at least 30 percent, an increase in the rotational pool 

of ready units by at least 50 percent, the creation of a deployable jointcapable headquarters, a force design upon which the future networkcentric developments can be readily applied, and reduced stress on the 

force through a more predictable deployment cycle. However, these goals 

have not translated into outcome-related metrics that are reported to 

provide decision makers a clear status of the modular restructuring as a 

whole. Army officials stated that unit creation schedules and readiness 

levels are the best available metrics for assessing modularity progress 

because modularity is a reorganization encompassing hundreds of 

individual procurement programs that would be difficult to collectively 

assess in a modularity context. 

While we recognize the complexity of the modular restructuring, we also 

note that without clear definitions of metrics, and periodic communication 

of performance against these metrics, the Secretary of Defense and 

Congress will have difficulty assessing the impact of refinements and 

enhancements to the modular design, such as changes in the number of 

modular combat and support brigades reported in the QDR and any 

changes in resource requirements that may occur as a result of these 

changes. 

Army Lacks a Long-term 

Plan for Comprehensively 

Evaluating Modular 

Designs 

In fiscal year 2004, TRADOC’s Analysis Center concluded that the modular 

brigade combat team designs would be more capable than division-based 

units based on an integrated and iterative analysis employing computerassisted exercises, subject matter experts, and senior observers. This 

analysis culminated in the approval of modular brigade-based designs for 

the Army. The assessment employed performance metrics such as mission 

accomplishment, units’ organic lethality, and survivability, and compared 

the performance of variations on modular unit designs against the existing 

division-based designs. The report emphasized that the Chief of Staff of 

the Army had asked for “good enough” prototype designs that could be 

Page 17 GAO-06-548T 
quickly implemented, and the modular organizations assessed were not 

the end of the development effort. 

Since these initial design assessments, the Army has been assessing 

implementation and making further adjustments in designs and 

implementation plans through a number of venues, to include 

• unit readiness reporting on personnel, equipment, and training; 

• modular force coordination cells to assist units in the conversion process; 

• modular force observation teams to collect lessons during training; and 

• collection and analysis teams to assess units’ effectiveness during 

deployment.

TRADOC has approved some design change recommendations and has not 

approved others. For example, TRADOC analyzed a Department of the 

Army proposal to reduce the number of Long-Range Advanced Scout 

Surveillance Systems, but recommended retaining the higher number in 

the existing design in part because of decreases in units’ assessed lethality 

and survivability with the reduced number of surveillance systems. 

Army officials maintain that ongoing assessments provide sufficient 

validation that the modularity concept works in practice. However, these 

assessments do not provide a comprehensive evaluation of the modular 

design as a whole. Further, the Army does not plan to conduct a similar 

overarching analysis to assess the modular force capabilities to perform 

operations across the full spectrum of potential conflict. In November 

2005, we reported that methodically testing, exercising, and evaluating 

new doctrines and concepts is an important and established practice 

throughout the military, and that particularly large and complex issues 

may require long-term testing and evaluation that is guided by study 

plans.13 We believe the evolving nature of the design highlights the 

importance of planning for broad-based evaluations of the modular force 

to ensure the Army is achieving the capabilities it intended, and to provide 

an opportunity to make course corrections if needed. For example, one 

controversial element of the design was the decision to include two 

maneuver battalions instead of three in the brigade combat teams.14

 13 GAO, Military Readiness: Navy’s Fleet Response Plan Would Benefit from a

Comprehensive Management Approach and Rigorous Testing, GAO-06-84 (Washington,

D.C.: Nov. 22, 2005). 

14 Brigades are made up of battalions; battalions made up of companies. 

Page 18 GAO-06-548T 
TRADOC’s 2004 analysis noted that the brigade designs with the two 

maneuver battalion organization had reduced versatility compared to the 

three maneuver battalion design, and cited this as one of the most 

significant areas of risk in the modular combat brigade design. Some 

defense experts, to include a current division commander and several 

retired Army generals, have expressed concerns about this aspect of the 

modular design. In addition, some of these experts have expressed 

concerns about whether the current designs have been sufficiently tested

and whether they provide the best mix of capabilities to conduct fullspectrum operations. In addition, the Army has recently completed 

designs for support units and headquarters units. Once the Army gets more 

operational experience with the new modular units, it may find it needs to 

make further adjustments to its designs. Without another broad-based 

evaluation, the Secretary of Defense and congressional leadership will 

lack visibility into the capabilities of the brigade combat teams as they are 

being organized, staffed, and equipped. 

The fast pace, broad scope, and cost of the Army’s restructuring to a 

modular force present considerable challenges for the Army, particularly 

as it continues to be heavily involved in fighting the Global War on 

Terrorism. These factors pose challenges to Congress as well to provide 

adequate oversight of the progress being made on achieving modularity 

goals and of funds being appropriated for this purpose. In this challenging 

environment, it is important for the Army to clearly establish and 

communicate its funding priorities and equipment and personnel 

requirements and assess the risks associated with its plans. Moreover, it is

important for the Army to clearly establish a comprehensive long-term 

approach for its modular restructuring that reports not only a schedule of

creating modular units, but measures of its progress toward meeting its 

goal of creating a more rapidly deployable, joint, expeditionary force. 

Without such an approach, the Secretary of Defense and Congress will not 

have the information needed to weigh competing funding priorities and 

monitor the Army’s progress in its over $52 billion effort to transform its 

force. 

Mr. Chairman and members of the subcommittee, this concludes my 

prepared remarks. I would be happy to answer any questions you may 

have. 

Concluding Remarks 

Page 19 GAO-06-548T 
For future questions about this statement, please contact Janet St. Laurent 

at (202) 512-4402. Other individuals making key contributions to this 

statement include Gwendolyn Jaffe, Assistant Director; Margaret Best; 

Alissa Czyz; Christopher Forys; Kevin Handley; Joah Iannotta; Harry Jobes; 

David Mayfield; Sharon Pickup; Jason Venner; and J. Andrew Walker. 

Page 20 GAO-06-548T 

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