United States Government Accountability Office

GAO Testimony 

Before the Subcommittees on Readiness 

and Air and Land Forces, Committee on 

Armed Services, House of Representatives

DEFENSE LOGISTICS

Preliminary Observations 

on the Army’s 

Implementation of Its 

Equipment Reset Strategies 

Statement of William M. Solis 

Director, Defense Capabilities and Management 

For Release on Delivery

Expected at 10:00 a.m. EST 

Wednesday, January 31, 2007 

 

GAO-07-439T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

January 31, 2007

DEFENSE LOGISTICS

Preliminary Observations on the Army’s 

Implementation of Its Equipment Reset 

Strategies 

Highlights of GAO-07-439T, testimony 

before the Subcommittee on Readiness 

and the Subcommittee on Air and Land 

Forces, Committee on Armed Services, 

House of Representatives

Continuing military operations in 

Iraq and Afghanistan are taking a 

heavy toll on the condition and

readiness of the Army’s equipment. 

Harsh combat and environmental

conditions in theater over sustain 

periods exacerbates the wear and 

tear on equipment. Since fiscal 

year 2002, Congress has

appropriated about $38 billion to 

the Army for the reset (repair, 

replacement, and modernization) 

of equipment that has been 

damaged or lost as a result of 

combat operations. As operations 

continue in Iraq and Afghanistan 

and the Army’s equipment reset

requirements increase, the 

potential for reset costs to 

significantly increase in future 

Department of Defense annual

budgets also increases. For

example, the Army estimates that it

will need about $12 billion to $13 

billion per year for equipment reset 

until operations cease, and up to 

two years thereafter. 

Today’s testimony addresses 

(1) the extent to which the Army 

can track and report equipment 

reset expenditures in a way that 

confirms that funds appropriated 

for reset are expended for that 

purpose, and (2) whether the Army 

can be assured that its equipment 

reset strategies will sustain future 

equipment readiness for deployed 

as well as non-deployed units while

meeting ongoing requirements. 

GAO’s preliminary observations are

based on audit work performed

from November 2005 through 

December 2006. 

The Army cannot track or report equipment reset expenditures in a way that 

confirms that funds appropriated for reset are expended for that purpose. In 

order to provide effective oversight of the Army’s implementation of its 

equipment reset strategies and to plan for future reset initiatives, the 

Congress needs to be assured that the funds appropriated for reset are used 

as intended. The Army, however, is unable to confirm that the $38 billion 

that Congress has appropriated to the Army since fiscal year 2002 for 

equipment reset has been obligated and expended for reset. Because

equipment reset had not been identified as a separate program within the 

budget, it was grouped together with other equipment-related line items in 

the O&M and Procurement appropriations. With the enactment of the Fiscal 

Year 2007 Appropriations Act, Congress directed DOD to provide a detailed 

accounting of obligations and expenditures by program and subactivity 

group. The Army has established a subactivity group for reset, and, 

according to Army officials, beginning in fiscal year 2007, the Army has 

begun to track reset obligations and expenditures by subactivity group. 

However, based on our analysis, the Army’s reset tracking system does not 

provide sufficient detail to provide Congress with the visibility it needs to 

provide effective oversight. 

The Army cannot be assured its reset strategies will sustain equipment 

availability for deployed as well as non-deployed units while meeting 

ongoing operational requirements. The Army’s primary objective for 

equipment reset is to equip units preparing for deployment. However, the 

Army’s reset strategy does not specifically target low levels of equipment on 

hand among units preparing for deployment. Although deployed Army units 

generally report high readiness rates, the Army continues to be faced with 

increasing levels of operational risk due to low levels of equipment on hand 

among units preparing for deployment. According to the Army’s fiscal year 

2007 framework for reset and the Army’s Force Generation model 

implementation strategy, the goal of reset is to prepare units for deployment 

and to improve next-to-deploy unit’s equipment on hand levels. However,

since the Army’s current reset planning process is based on resetting 

equipment that it expects will be returning to the United States in a given 

fiscal year, and not based on an aggregate equipment requirement to 

improve the equipment on hand levels of deploying units, the Army cannot 

be assured that its reset programs will provide sufficient equipment to train 

and equip deploying units for ongoing and future requirements for the Global 

War on Terrorism. The Army has recently begun to track the equipment 

readiness of returning units and units approaching deployment in an effort to 

assess the effectiveness of their reset efforts. However, these readiness

indicators are of limited value in assessing the effectiveness of reset because

they do not measure the equipment on hand levels against the equipment 

that the units actually require to accomplish their directed missions in Iraq

and Afghanistan. 

www.gao.gov/cgi-bin/getrpt?GAO-07-439T.

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. 
Mr. Chairmen and Members of the Subcommittees: 

Thank you for the opportunity to appear before you today to discuss the 

Army’s equipment planning strategies for the repair, replacement, and 

modernization of equipment, collectively known as equipment reset. Our 

service members are working with great courage and diligence to perform 

the roles the President has asked of them. Notwithstanding their noble 

efforts, equipment shortages and equipment readiness shortfalls among 

U.S. Army units are of increasing concern. As operations continue in Iraq 

and Afghanistan and the Army’s equipment reset requirements grow, the 

potential for reset costs to significantly increase in future Department of 

Defense (DOD) annual budgets also grows. In addition to the billions of 

dollars provided to DOD for military equipment in its yearly baseline 

budgets, Congress has provided the Army with more than $38 billion in

supplemental appropriations since fiscal year 2002 for the repair, 

replacement, and modernization of equipment. In fiscal year 2007 alone, 

the Army has received $17.1 billion for equipment reset, almost double the 

$8.6 billion in equipment reset funding the Army received in fiscal year 

2006. In addition, DOD is expected to request an additional $26 billion for 

reset in a subsequent fiscal year 2007 supplemental appropriation. Army 

officials estimate the Army will need about $12 billion to $13 billion per 

year for reset until operations cease in Iraq and Afghanistan and up to two 

years thereafter. 

Continuing military operations in Iraq and Afghanistan are taking a toll on 

the condition and readiness of military equipment. Harsh combat and 

environmental conditions in theater over sustained periods of time 

exacerbates equipment repair, replacement, and modernization problems 

that existed before the onset of combat operations in Iraq and Afghanistan. 

Upon returning from operations, equipment is reset in preparation for 

future operations. Although the Army continues to meet mission 

requirements and reports high readiness rates for deployed units, the lack

of equipment availability for units preparing for deployment and other 

non-deployed units increases the risk to future overall readiness. 

As we testified in March 2006 before the Subcommittees on Readiness and 

Tactical Air and Land Forces of the House Committee on Armed Services,1

the Army will face a number of ongoing and long-term challenges that will 

 1

 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).

Page 1 GAO-07-439T 
affect the timing and cost of equipment reset, such as Army modularity 

initiatives, equipment requirements for prepositioned equipment sets; 

future equipment replacement needs for active, guard, and reserve forces;

depot capacity issues, the potential transfer of U.S. military equipment to 

the Iraqi Security Forces, and the possibility of continuing logistical 

support for Iraqi Security Forces. We also observed that while the precise 

dollar estimate for the reset of Army equipment will not be known until 

operations in Iraq and Afghanistan cease, it will likely cost billions of 

dollars to repair and replace equipment. While the Army is working to 

refine overall requirements, the total requirements and costs are unclear 

and raise a number of questions as to how the Army will afford them. We 

concluded that until the Army is able to firm up these requirements and 

cost estimates, neither the Secretary of Defense nor the Congress will be 

in a sound position to weigh the trade offs between competing 

requirements and risks associated with degraded equipment readiness. 

My statement today reflects our preliminary observations drawn from our 

ongoing work on equipment reset issues, which we are performing under 

the Comptroller General’s authority to conduct evaluations on his own 

initiative. As requested, my testimony today will focus on the Army’s 

equipment reset strategies for ground equipment and rotary aircraft in 

both the active and reserve components. Specifically, it addresses (1) the 

extent to which the Army can track and report equipment reset 

expenditures in a way that confirms that funds appropriated for reset are 

expended for that purpose, and (2) whether the Army can be assured that 

its equipment reset strategies will sustain future equipment readiness for 

deployed as well as non-deployed units while meeting ongoing

requirements. 

The preliminary observations we will discuss today regarding Army 

equipment reset strategies are based on audit work performed from 

November 2005 through December 2006. We conducted our work in 

accordance with generally accepted government auditing standards. 

The Army cannot track or report equipment reset expenditures in a way 

that confirms that funds appropriated for reset are expended for that 

purpose. In order to provide effective oversight of the Army’s 

implementation of its equipment reset strategies and to plan for future 

reset initiatives, the Congress needs to be assured that the funds 

appropriated for reset are used as intended. The Army, however, is unable 

to confirm that the $38 billion that Congress has appropriated to the Army 

since fiscal year 2002 for equipment reset has been obligated and 

Summary 

Page 2 GAO-07-439T 
expended for reset. Because equipment reset was not identified as a 

separate program within the budget, it was grouped together with other 

equipment-related line items in the O&M and Procurement accounts. The 

Conference Report accompanying the Department of Defense 

Appropriations Act for 20072

 directed the Secretary of Defense to provide 

periodic reports to congressional defense committees which include a

detailed accounting of obligations and expenditures of appropriations 

provided in Title IX of the act by program and subactivity group. 

According to the Conference Report, the conferees have provided $17.1 

billion in additional reset funding for the Army in Title IX. The Army has 

established a subactivity group for reset, and, according to Army officials, 

beginning in fiscal year 2007, the Army has begun to track reset obligations

and expenditures by subactivity group. However, based on our analysis, 

the Army’s reset tracking system does not provide sufficient detail to 

provide Congress with the visibility it needs to provide effective oversight. 

In addition, because the Army has not historically tracked the execution of 

its reset appropriations, it does not have historical execution data. As we 

have previously reported, historical execution data would provide a basis 

for estimating future funding needs.3

 The Congressional Budget Office has

also recently testified that better estimates of future reset costs could be 

provided to Congress if more information was available on expenditures 

incurred to date.4

 Without historical execution data, the Army must rely on 

assumptions and models based on its own interpretations of the definition

of reset, and may be unable to submit accurate budget requests to obtain 

future reset funding. 

The Army cannot be assured its reset strategies will sustain equipment 

availability for deployed as well as non-deployed units while meeting 

ongoing operational requirements. The Army’s primary objective for 

equipment reset is to equip units preparing for deployment. However, the 

Army’s reset strategy does not specifically target low levels of equipment 

on hand among unit’s preparing for deployment. Although deployed Army 

 2

 H.R. Conf. Rep. No. 109-676, at 359 (2006), which accompanied the Department of

Defense Appropriations Act, 2007, Pub. L. No. 109-289 (2006). 

3

 GAO, Global War on Terrorism: Fiscal Year 2006 Obligation Rates Are Within Funding 

Levels and Significant Multiyear Procurement Funds Will Likely Remain Available for

Use in Fiscal Year 2007, GAO-07-76 (Washington, D.C.: Nov. 13, 2006); and GAO, Defense 

Management: Processes to Estimate and Track Equipment Reconstitution Costs Can Be

Improved, GAO-05-293 (Washington, D.C.: May 5, 2005). 

4 Congressional Budget Office, Issues in Budgeting for Operations in Iraq and the War on

Terrorism (Washington, D.C.: Jan. 18, 2007). 

Page 3 GAO-07-439T 
units generally report high readiness rates, the Army continues to be faced 

with increasing levels of operational risk due to low levels of equipment 

on hand among units preparing for deployment. According to the Army’s 

fiscal year 2007 framework for reset and the Army’s Force Generation 

(ARFORGEN) implementation strategy, the goal of reset is to prepare 

units for deployment and to improve next-to-deploy unit’s equipment on 

hand levels. However, since the Army’s current reset planning process is 

based on resetting equipment that it expects will be returning to the 

United States in a given fiscal year, and not based on an aggregate 

equipment requirement to improve the equipment on hand levels of 

deploying units, the Army cannot be assured that its reset programs will 

provide sufficient equipment to train and equip deploying units for 

ongoing and future GWOT requirements. According to November 2006 

Army readiness reports, deployed units and units preparing for 

deployment reported low levels of equipment on hand, as well as specific

equipment item shortfalls that affect their abilities to carry out their 

missions. As of fiscal year 2007, Army officials stated they have begun to 

track the equipment readiness of returning units and units approaching 

deployment in an effort to assess the effectiveness of their reset efforts. To 

do this, Army leaders plan to examine the equipment serviceability of units 

that recently returned from deployment that are resetting and the 

equipment on hand for units preparing to deploy5

. However, these 

readiness indicators such as equipment on hand and equipment 

serviceability are of limited value in assessing the effectiveness of reset. 

Specifically, equipment on hand measures required levels of equipment 

against the primary mission for which the unit was designed, which may 

be much different than the unit’s directed GWOT mission, and equipment

serviceability ratings may be high, even if equipment on hand levels are 

very low. For example, the Army plans to recapitalize more than 7,500 

High Mobility, Multi-Purpose Wheeled Vehicles (HMMWV) in fiscal year 

2007 at a cost of $455 million. While the Army’s HMMWV recapitalization 

activities may raise overall HMMWV equipment on hand levels of nondeployed units in the United States, Army officials have stated that this 

recapitalization program will not directly provide HMMWVs to train or 

equip units deploying for OIF missions. Specifically, the unarmored 

HMMWVs produced by the recapitalization program are not being 

deployed to the OIF theater due to inadequate force protection and have 

 5

 Equipment on hand is a readiness measurement based on the quantity and type of

required equipment that is available to a unit for the execution of the unit’s primary 

mission. Equipment serviceability is based on the condition of equipment the unit has on

hand. 

Page 4 GAO-07-439T 
limited training value to deploying units primarily because the unarmored 

HMMWVs have different handling characteristics and configurations than 

the armored HMMWVs used in Iraq. Furthermore, the Army’s reset 

strategies do not ensure that the repairing, replacing, and modernizing of 

equipment needed to support units that are preparing for deployment are 

being given priority over other longer-term equipment needs, such as 

equipment modernization in support of the Army’s modularity initiative. 

For example, the Army’s FY 2007 reset strategy includes plans to 

accelerate modernization of Abrams Tanks and Bradley Fighting Vehicles 

to accelerate achieving long-term strategic goals under the Army’s 

modularity initiative. 

As a result of operations related to OIF, the Army continues to face an 

enormous challenge to reset its equipment. This is due to the increased 

usage of equipment, pace of operations, and the amount of equipment to 

be reset. At the onset of operations in March 2003, the Army deployed with 

equipment that in some cases was already more than 20 years old. As of 

January 2007, the Army has about 25 percent of total on-hand wheeled and 

tracked vehicles and about 19 percent of rotary wing aircraft deployed to 

the OIF/Operation Enduring Freedom (OEF) theater as shown in table 1.

Background 

Table 1. Comparison of Army Ground Equipment and Rotary Aircraft Deployed to 

OIF/OEF Theater and the Total Equipment On Hand as of January 2007

Total In OIF/OEF 

Theater Total On Hand

Percent 

Equipment 

Deployed

Wheeled Vehicles 

 HEMTT 3282 12836 26

 HET 912 2394 38

 HMMWV 23818 95970 24

Tracked Vehicles 

 Bradley 679 3021 22

 Abram 366 3406 11

 M88 192 1832 10

Total Wheeled & 

Tracked Vehicles 29249 119459 24

Rotary Wing A/C 

 AH-64A/D 120 689 17

Page 5 GAO-07-439T 
Total In OIF/OEF 

Theater Total On Hand

Percent 

Equipment 

Deployed

 CH-47D 63 392 16

 OH-58D 60 354 17

 UH-60A/L 293 1362 21

Total Rotary Wing

Aircraft 536 2797 19

Source: Army G-8 

As we stated in our March 2006 testimony, the Army is operating this 

equipment at a pace well in excess of peacetime operations. The harsh 

operating environments in Iraq and environmental factors such as heat, 

sand, and dust have taken a toll on sensitive components. Troop levels and 

the duration of operations are also factors that affect equipment reset 

requirements. 

The Army defines reset as the repair, recapitalization, and replacement of 

equipment. Repairs can be made at the field level or national (depot) level. 

Army field level maintenance is intended to bring equipment back to the 

10/20 series Technical Manual standard, is done by soldiers augmented by 

contractors, as required, and is usually performed at installations where 

the equipment is stationed.6

 National level maintenance is work performed 

on equipment that exceeds field level reset capabilities. National Level 

maintenance may be done at Army depots, by contractors, by installation 

maintenance activities, or a combination of the three, and is coordinated

by the Army Material Command. The Army Chief of Staff testified in June 

2006 that, as of that point in time, the Army had reset over 1,920 aircraft,

14,160 tracked vehicles, and 110,800 wheeled vehicles, as well as 

thousands of other items. He further stated that the Army expected to 

have placed about 290,000 major items in reset by the end of fiscal year 

2006.

7

 6

 Army reset does not include contractor logistics support for equipment readiness, field 

level maintenance required to keep equipment operational, or the replacement of

ammunition. 

7

 Gen. Peter J. Schoomaker, Chief of Staff of the Army, Army’s Reset Strategy and Plan for

Funding Reset Requirements, Statement before Committee on Armed Services, U.S. House 

of Representatives (June 27, 2006). 

Page 6 GAO-07-439T 
Recapitalization includes rebuilding of equipment which could include:

extending service life, reducing operating and support costs, enhancing 

capability, and improving system reliability. The Army recapitalizes 

equipment either at Army Materiel Command depots or arsenals, the 

original equipment manufacturer, or a partnership of the two.

Replacement includes buying new equipment to replace confirmed battle 

losses, washouts, obsolete equipment, and critical equipment deployed

and left in theater but needed by reserve components for homeland 

defense/homeland security missions. 

Army reset funding includes ground and aviation equipment, combat 

losses, and prepositioned equipment. The Army funds field level and some 

depot level maintenance from the operation & maintenance (O&M) 

appropriations, while procurement appropriations fund most 

recapitalization and all procurement of new equipment as part of reset. 

The Army’s fiscal year 2007 reset execution plan includes about 46 percent 

O&M funding and 54 percent procurement funding. Table 2 provides a 

breakdown of Army equipment reset execution plans for fiscal year 2007.

Table 2: Army Fiscal Year 2007 Reset Execution Plans 

Army

Reset Category 

Amount of reset funding

(dollars in billions) Percent of total

Repair (O&M): $7.8 46 

 Field level Maintenance 3.7

 Depot level Maintenance 4.1

Recapitalization 4.3 25

Replacement (Procurement) 5.0 29

 Total fiscal year 2007 funding1$17.1 100

Source: Army G-8 

Under the Army’s framework for training and equipping units for 

deployments, known as the Army Force Generation Model (ARFORGEN), 

reset begins when units return from their deployments and concludes 

prior to a unit’s being made available for subsequent missions. Reset is 

intended to be a demand-based process, focused on operational 

requirements of the combatant commander, to rapidly return Army 

materiel to units preparing for subsequent operations in order to meet 

current and future combatant commander demands. Next-to-deploy units

are identified and intended to receive first priority for distribution of 

equipment emerging from reset programs per the Army’s Resource Priority 

Page 7 GAO-07-439T 
List8

. The Army’s fiscal year 2007 reset policy states that the primary driver 

in equipment reset operations is the rapid return of Army materiel to units

preparing for subsequent operations as specified by the Army Resource 

Priority List (ARPL), a process that should lead to improved equipment 

readiness over time. 

To develop its fiscal year 2007 reset execution plan, the Army examined 

the types and quantities of equipment held by deployed units overseas and 

estimated what equipment they expected to return from overseas theaters 

to unit home stations or Army depots for reset. Depending on the required 

work, and whether upgrades and modernizations are planned, item-byitem determinations were made on what level of maintenance the 

equipment would receive as part of its reset. Due to the complexity and

quantity of the maintenance required, some equipment items are 

automatically sent to one of the Army’s depots. For example, returning 

Abrams tanks and Bradley Fighting vehicles are automatically inducted

into depot level reset programs due to the quantity and complexity of their 

reset maintenance. For each equipment item expected to return from 

overseas theaters for reset in a given fiscal year, the Army estimates a per 

unit cost of the planned reset activity, and multiplies that cost by the 

number of items expected to returned and be available for reset. The total 

Army reset funding requirement for a given fiscal year is determined by 

aggregating all of these costs to include all equipment expected to return 

from overseas theaters.

The Army cannot track or report equipment reset expenditures in a way 

that confirms that funds appropriated for reset are expended for that 

purpose. In order to provide effective oversight of the Army’s 

implementation of its equipment reset strategies and to plan for future 

reset initiatives, the Congress needs to be assured that the funds 

appropriated for reset are used as intended. The Army, however, is unable 

to confirm that the $38 billion that Congress has appropriated to the Army 

since fiscal year 2002 for equipment reset has been obligated and 

expended for reset. Because equipment reset was not a separate program 

within the budget, it was grouped together with other equipment-related 

line items in the O&M and Procurement accounts. The Conference Report 

Army Reset Tracking 

System Cannot 

Confirm Funds 

Appropriated for 

Reset are Expended 

for that Purpose 

 8

 The Army Resource Priority List specifies the order in which Army units have precedence 

for distribution of resource. Generally, units closer to deployment dates have the highest 

priority. 

Page 8 GAO-07-439T 
accompanying the Department of Defense Appropriations Act for 20079

directed the Secretary of Defense to provide periodic reports to 

congressional defense committees which include a detailed accounting of 

obligations and expenditures of appropriations provided in Title IX of the 

act by program and subactivity group. According to the Conference 

Report, the conferees have provided $17.1 billion in additional reset 

funding for the Army in Title IX. The Army has established a subactivity 

group for reset, and, according to Army officials, beginning in fiscal year 

2007, the Army has begun to track reset obligations and expenditures by 

subactivity group. However, based on our analysis, the Army’s reset 

tracking system does not provide sufficient detail to provide Congress 

with the visibility it needs to provide effective oversight. For example, the 

Army’s tracking system compares what they have executed by month to 

their obligation plan at a macro level. Unlike the annual baseline budget 

requests which include details within each subactivity group, the Army’s 

O&M monthly reset report does not provide details of the types of 

equipment repaired. Likewise, the Procurement report does not itemize 

the types of equipment replaced or recapitalized. As a result, the Army is 

not in a position to tell Congress how they have expended the funds they 

have received to repair, replace, and recapitalize substantial amounts of 

damaged equipment. Because funds for reset are generally recorded in the 

same appropriation accounts as other funds that are included in the 

baseline budget, it is difficult to determine what is spent on reset and what 

is spent on routine equipment maintenance. In addition, because the Army 

has not historically tracked the execution of its reset appropriations, it 

does not have historical execution data. As we have previously reported, 

historical execution data would provide a basis for estimating future 

funding needs.10 The Congressional Budget Office has also recently 

testified that better estimates of future reset costs could be provided to 

Congress if more information was available on expenditures incurred to 

date.11 Without historical execution data, the Army must rely on 

assumptions and models based on its own interpretations of the definition

of reset, and may be unable to submit accurate budget requests to obtain 

reset funding in the future. 

 9

 H.R. Conf. Rep. No. 109-676, at 359 (2006), which accompanied the Department of

Defense Appropriations Act, 2007, Pub. L. No. 109-289 (2006). 

10 GAO-07-76; GAO-05-293. 

11 Congressional Budget Office, Issues in Budgeting for Operations in Iraq and the War 

on Terrorism (Washington, D.C.: Jan. 18, 2007). 

Page 9 GAO-07-439T 
The Army cannot be assured its reset strategies will sustain equipment 

availability for deployed as well as non-deployed units while meeting 

ongoing operational requirements. The Army’s primary objective for 

equipment reset is to equip its deployed forces and units preparing for 

deployment. However, the Army’s reset strategy does not specifically

target low levels of equipment on hand among units preparing for 

deployment. Furthermore, the Army’s reset strategies do not ensure that 

the repairing, replacing, and modernizing of equipment needed to support 

units that are preparing for deployment are giving priority over other 

longer-term equipment needs, such as equipment modernization in support 

of the Army’s modularity initiative. 

The Army’s reset strategies do not specifically target low levels of 

equipment on hand among units preparing for deployment in order to 

mitigate operational risk. The Army continues to be faced with increasing 

levels of operational risk due to low levels of equipment on hand among 

units preparing for deployment. According to the Army’s fiscal year 2007

framework for reset and the Army’s ARFORGEN implementation strategy, 

the primary goal of reset is to prepare units for deployment and to improve 

next-to-deploy units’ equipment on hand levels. Units preparing for 

deployment are intended to attain a prescribed level of equipment on hand

within forty-five days prior to their mission readiness exercise, which is 

intended to validate the unit’s preparedness for its next deployment. 

However, since the Army’s reset planning process is based on resetting the 

equipment that will be returning to the United States in a given fiscal year, 

and not based on an aggregate equipment requirement to improve the 

equipment on hand levels of deploying units, the Army cannot be assured 

that its reset programs will provide sufficient equipment to train and equip

deploying units for ongoing and future GWOT requirements, which may 

lead to increasing levels of operational risk. 

Army Cannot Be 

Assured Its Reset 

Strategies Will Sustain 

Equipment 

Availability While 

Meeting Ongoing 

Operational 

Requirements 

Army Reset Strategies Do 

Not Target Low Levels Of 

Equipment On Hand To

Mitigate Operational Risk 

Army Has Begun To Track 

Equipment Readiness But 

Readiness Indicators Are 

of Limited Value 

As of fiscal year 2007, Army officials stated they have begun to track the 

equipment readiness of returning units and units approaching deployment

dates in an effort to assess the effectiveness of their reset efforts. To do 

this, Army leaders plan to examine the equipment serviceability of units 

that recently returned from deployed that are resetting and the equipment 

on hand for units preparing to deploy. However, these readiness indicators 

such as equipment on hand and equipment serviceability are of limited 

value in assessing the effectiveness of reset. For example, equipment on 

hand measures required levels of equipment against the unit’s primary 

mission which may be much different than the unit’s directed GWOT 

Page 10 GAO-07-439T 
mission. In addition, a unit’s equipment serviceability ratings may be 

reported as acceptable, even if equipment on hand levels are very low12. 

For example, the Army plans to induct 7,500 High Mobility, Multi-Purpose 

Wheeled Vehicles (HMMWV) into depot level recapitalization programs in 

2007 at a cost of $455 million. The Army intends to use these HMMWVs to

fill gaps in the Army’s force structure to allow units to train and perform 

homeland security missions. However, according to Army officials, the 

HMMWVs that emerge from this recapitalization program will not be 

suitable for use in the OIF theater because they will not be armored and, 

thus, will not provide protection from sniper fire and mine blasts. The 

unarmored M1097R1 HMMWVs will not offer the same level of force 

protection as the M1114 Uparmored HMMWV, and do not have the M1114’s 

rooftop weapons station. According to Army officials, only fully armored 

HMMWVs are being deployed to the OIF theater. While the Army’s 

HMMWV recapitalization activities may raise overall HMMWV equipment 

on hand levels of non-deployed units in the United States, they will not 

directly provide HMMWVs to equip units deploying for OIF missions, or 

allow them to train on vehicles similar to those they would use while 

deployed. According to November 2006 Army readiness data, deployed 

units, and units preparing for deployment report low levels of equipment

on hand, as well as specific equipment item shortfalls that affect their 

ability to carry out their missions. Army unit commanders preparing for 

deployments may subjectively upgrade their unit’s overall readiness 

levels13, which may result in masking the magnitude of equipment 

shortfalls. Since 2003, deploying units have continued to subjectively 

upgrade their overall readiness as they approach their deployment dates, 

despite decreasing overall readiness levels among those same units. This 

trend is one indicator of the increasing need for Army leaders to carefully

balance short-term investments as part of reset to ensure overall readiness

levels remain acceptable to sustain current global requirements. Until this 

is done, the Army cannot be assured that their plans will achieve the stated 

 12 Units report their readiness using overall C-level ratings, which are based on assessments

of their equipment on hand, equipment serviceability, training, and personnel levels. These 

assessments are made against the unit’s Table of Organization and Equipment, which 

prescribes the wartime mission, capabilities, organizational structure, and equipment 

requirements for which the unit was designed, which may be different than its directed

mission supporting operations in Iraq or Afghanistan. 

13 Army units assigned directed missions can subjectively report their readiness for 

upcoming deployment using “percent effective” ratings. These reflect the unit commander’s 

subjective assessment of the unit’s ability to perform its mission. 

Page 11 GAO-07-439T 
purpose of their reset strategy for 2007, or in future years, to restore the 

capability of the Army to meet current and future operational demands. 

The Army’s reset strategies do not ensure that the repairing, replacing, and 

modernizing of equipment needed to support units that are preparing for 

deployment are given priority over other longer-term equipment needs, 

such as equipment modernization in support of the Army’s modularity 

initiative. Army reset strategies are primarily intended to be based on 

plans for repairing, recapitalizing, or replacing equipment returning from 

overseas theaters in a given fiscal year. However, in addition to meeting 

these short term requirements, the Army’s reset strategy has included 

funding requests for certain items to accelerate achieving longer-term 

strategic goals under the Army’s modularity initiative. For example, in 

addition to the planned fiscal year 2007 national level reset of almost 500 

tanks and more than 300 Bradleys expected to return from the OIF theater,

the Army also intends to spend approximately $2.4 billion in fiscal year 

2007 reset funds to take more than 400 Abrams tanks and more than 500 

Bradley Fighting Vehicles from long-term storage or from units that have

already received modernized Bradleys for depot level upgrades. These 

recapitalizations will allow the Army to accelerate their progress in 

achieving a modular force structure14 by providing modernized Abrams 

and Bradley vehicles to several major combat units 1 or 2 years ahead of 

schedule. The Army believes achieving these modularity milestones for 

Abrams tanks and Bradley Fighting Vehicles will achieve greater 

commonality in platforms that will enable force generation efforts and 

reduce overall logistical and financial requirements by reducing the 

number of variants that must be supported. 

Since fiscal year 2002, Congress has appropriated approximately $38 

billion for Army equipment reset. In addition, the Army estimates that 

future funding requirements for equipment reset will be about $12 to $13 

billion per year for the foreseeable future. To ensure that these funds are 

Army Reset Strategies Do 

Not Give Priority To Unit 

Equipment Needs Over 

Longer-Term Equipment 

Needs 

Concluding 

Observations 

 14 The Army Modular Heavy Brigade Combat Team (HBCT) force structure calls for 31 

HBCTs equipped with combinations to two different types of Abrams Tanks and Bradley 

Fighting Vehicles. Seventeen HBCTs would be equipped with the digitized Abrams M1A2 

System Enhancement Program (SEP) tanks and digitized M2A3 Bradley Fighting Vehicles. 

The remaining fourteen HBCTs would be equipped with the Abrams M1A1 Abrams

Integrated Management (AIM) and Bradley Operation Desert Storm (ODS) upgraded

vehicles. 

Page 12 GAO-07-439T 
appropriately used for the purposes intended and to provide the Congress 

with the necessary information it needs to provide effective oversight, the 

Army will need to be able to track and report the obligation and 

expenditure of these funds at a more detailed level than they have in the 

past. We do not believe that the reporting format the Army developed for 

tracking and reporting this data for fiscal year 2007 is sufficiently detailed

to provide Congress with the visibility it needs to provide effective

oversight. 

Also, the Army’s reset strategies need to ensure that priority is given to 

repairing, replacing, and modernizing the equipment that is needed to

equip units preparing for deployment. The current low levels of equipment 

on hand for units that are preparing for deployment could potentially 

decrease overall force readiness if equipment availability shortages are not 

filled prior to these units’ deployments. 

Lastly, as the Army moves forward with equipment reset, it will need to 

establish more transparent linkages among the objectives of its reset 

strategies, the funds requested for reset, the obligation and expenditure of 

appropriated reset funds, and equipment requirements and related reset

priorities. 

Mr. Chairmen, this concludes my statement. I would be happy to answer 

any questions. 

Page 13 GAO-07-439T (350737) 
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