Prepositioned Stocks: DOD Needs to Develop a Department-Wide Vision and Goals to Guide Program Management
Published: 2017-07-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: DOD positions billions of dollars worth of assets–including combat vehicles, rations, medical supplies, and repair parts—at strategic locations around the world to use during early phases of operations. Each of the military services maintains its own prepositioned stock program. For the past 6 years, GAO has reported on the risk of duplication and inefficiencies in the services' programs due to the absence of a department-wide strategic policy and joint oversight. Section 321 of the NDAA for fiscal year 2014 required DOD to maintain a strategic policy and develop an implementation plan to manage its prepositioned stocks.
The NDAA for fiscal year 2014 also included a provision for GAO to review DOD's strategic policy and implementation plan. This report assessed the extent to which DOD's strategic policy addresses mandated reporting elements and describes the status of DOD's implementation plan. To conduct this work, GAO analyzed DOD's strategic policy against the elements required in the NDAA and discussed the status of the implementation plan with DOD officials.
section_title: What GAO Found
paragraphs: The Department of Defense's (DOD) strategic policy on its prepositioned stock programs, issued in March 2017, addressed one of the six mandated reporting elements (see table). Specifically, DOD's policy describes strategic planning and resource guidance (element 1), as required.
GAO assessed the remaining five reporting elements as not addressed because DOD did not provide the required information in its policy. For three of the five elements that were not addressed—a description of the strategic environment and challenges (element 4), metrics (element 5), and a framework for joint oversight (element 6)—DOD's policy assigns responsibility for the development of such information, and therefore GAO is not making recommendations related to those elements because DOD has already directed their implementation. However, for two of the five elements that were not addressed—a description of the department's vision and desired end state (element 2) and specific interim goals (element 3)—DOD's strategic policy does not include the required information and instead directs the development of component's (rather than the department's) vision, end state, and goals.
DOD officials stated that the strategic policy does not include required information such as a department-wide vision, end state, and interim goals because it is intended to serve as a directive for assigning responsibilities. Without revising its strategic policy or including required information in other department-wide guidance, DOD will not be positioned to fully synchronize the services' prepositioned stock programs to avoid unnecessary duplication and achieve efficiencies.
DOD has not yet issued an implementation plan for managing its prepositioned stock programs, which the National Defense Authorization Act (NDAA) required by April 24, 2014. DOD officials anticipated that a plan would be finalized by September 30, 2017. It will be important for DOD to address the elements that were omitted from its strategic policy as it creates the implementation plan to ensure that the plan is linked to a complete strategy on prepositioned stock programs for the department.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOD revise its prepositioned stocks strategic policy or include in other department-wide guidance (1) a description of the department's vision and the desired end state, and (2) specific interim goals for achieving this vision and end state. DOD concurred with the recommendations, noting that it is taking steps to implement them.

section_title: Letter
paragraphs: The Department of Defense (DOD) positions equipment and materiel  worth billions of dollars—including items such as combat vehicles,  rations, medical supplies, and repair parts—at strategic locations around  the world. By prepositioning stocks ashore and afloat, DOD is able to  provide assets to U.S. forces during the initial phases of an operation until  follow-on capabilities are available and the supply chain has been  established. DOD primarily uses prepositioned stocks for warfighting  purposes, but they are also used for a variety of other needs including  security cooperation activities, multilateral training exercises abroad,  humanitarian assistance, and disaster relief.
In the National Defense Authorization Act (NDAA) for fiscal year 2014,  Congress required DOD to maintain a strategic policy regarding the  department’s programs for prepositioned stocks that takes into account  national security threats, strategic mobility, service requirements, and the  requirements of the combatant commands. In addition, the act required  DOD, not later than 120 days after the enactment of the law, to develop  an implementation plan on its prepositioned stock programs. Both the  strategic policy and the implementation plan are to address required  elements in the law, such as describing the department’s vision for  prepositioning programs. (See the table on page 5 and appendix I for a  complete list of the required elements for the strategic policy and the  implementation plan respectively.)
We have previously reported on the long-term and ongoing challenges  related to DOD’s management and oversight of its prepositioned stocks.  For the past 6 years in our annual reports on duplication, overlap, and  fragmentation, we have identified the potential for duplication in the  services’ prepositioning stock programs. In May 2011, we recommended  that DOD develop a department-wide strategy and strengthen joint oversight to integrate and synchronize at a DOD-wide level the services’  prepositioned stock programs, in order to maximize efficiency in  managing prepositioned stocks across the department and to reduce  potentially unnecessary duplication. DOD concurred with our  recommendation. In the NDAA for fiscal year 2014, Congress required  DOD to maintain a strategic policy and develop an implementation plan to  maximize efficiencies and reduce duplication of prepositioning stocks. In  April 2016, we reported that DOD had made limited progress in  developing a department-wide strategic policy and implementation plan  and recommended that DOD establish a timeline for completing the policy  and plan. DOD did not concur with this recommendation, stating that the  department had already communicated to Congress its plan regarding the  additional development of a strategic policy and implementation plan.  Subsequently, Senate Report 114-255, accompanying a bill for the  National Defense Authorization Act for Fiscal Year 2017, contained a  provision directing DOD to establish a timeline for completing the  department-wide directive and implementation plan and identify the major  steps needed to implement the plan, including target dates for  accomplishing each major step that can be used to monitor progress and  report results. On March 7, 2017, DOD issued a strategic policy for the  management of its prepositioned stock programs. DOD stated in a  September 2016 letter to the defense committees that it would develop a  plan for implementing its strategic policy for its prepositioned stock  programs by the end of the third quarter of fiscal year 2017.
Section 321 of the NDAA for fiscal year 2014 also includes a provision for  us to review DOD’s strategic policy and implementation plan for  managing its prepositioned stock programs. For this report, we assessed  the extent to which DOD’s strategic policy addresses mandated reporting  elements and describe the status of DOD’s implementation plan.
To determine the extent to which DOD’s strategic policy for managing  prepositioned stock programs addresses the specific reporting elements  set out in section 321 of the NDAA for fiscal year 2014, we analyzed DOD  Directive 3110.07, Pre-positioned War Reserve Materiel (PWRM)  Strategic Policy. We performed a content analysis in which we compared  the information in DOD’s strategic policy with the six required reporting  elements and assessed the extent to which the policy addressed each  required element. One GAO analyst coded the information and a different  analyst checked the initial coding for accuracy. Any initial disagreements  in the coding were discussed and reconciled by the analysts. The  analysts then tallied their responses to determine the extent to which the  reporting elements were addressed. We assessed an element as  addressed if DOD’s report addressed all parts of the element. We  assessed an element as partially addressed if one or more—but not all— parts of the required element were explicitly addressed. We assessed an  element as not addressed if the report did not explicitly address any part  of the required element. To determine the status of DOD’s  implementation plan for its prepositioned stock programs, we reviewed  DOD documents, including correspondence to the defense committees  on milestones and actions regarding DOD’s ongoing efforts to develop  the plan. We also interviewed officials from the Offices of the Under  Secretary of Defense for Acquisition, Technology, and Logistics, the  Under Secretary of Defense for Policy, and the Joint Chiefs of Staff to  determine the status of DOD’s efforts.
We conducted this performance audit from April 2017 to July 2017 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The military services preposition stocks ashore and afloat to provide DOD  the ability to respond to multiple scenarios by providing assets to support  U.S. forces during the initial phases of an operation until the supply chain  has been established (see figure). Each military service maintains its own  configurations and types of equipment and stocks to support its own  prepositioned stock program. The Army stores sets of combat brigade  equipment, supporting supplies, and other stocks at land sites in several  countries and aboard ships. The Marine Corps stores equipment and  supplies for its forces aboard ships stationed around the world and at land  sites in Norway. The Navy’s prepositioned stock program provides  construction support, equipment for off-loading and transferring cargo  from ships to shore, and expeditionary medical facilities to support the  Marine Corps. In the Air Force, the prepositioned stock program includes  assets such as direct mission support equipment for fighter and strategic  aircraft as well as base operating support equipment to provide force,  infrastructure, and aircraft support during wartime and contingency  operations.
Figure: High Mobility Multipurpose Wheeled Vehicles in a Prepositioned Storage Facility (left) and Mine Resistant Ambush  Protected Vehicles Being Loaded for Prepositioning (right)
In June 2008, DOD issued an instruction directing the Under Secretary of  Defense for Policy to develop and coordinate guidance that identifies an  overall war reserve materiel strategy that includes starter stocks, which  DOD defines as war reserve materiel that is prepositioned in or near a  theater of operations and is designed to last until resupply at wartime  rates is established. Also, the instruction states that the Under Secretary  of Defense for Policy is responsible for establishing and coordinating  force development guidance that identifies an overall strategy to achieve  desired capabilities and responsiveness in support of the National  Defense Strategy. Further, it states that the Global Prepositioned Materiel  Capabilities Working Group, including representatives from the Office of  the Under Secretary of Defense for Acquisition, Technology, and  Logistics and the Joint Staff, has responsibility for, among other things,  addressing joint issues concerning prepositioned stocks.
section_title: DOD’s Strategic Policy Does Not Address 5 of the 6 Required Elements, and the Department Has Not Issued an Implementation Plan
paragraphs: On March 7, 2017, DOD issued its strategic policy for managing its  prepositioned stocks in DOD Directive 3110.07, Pre-positioned War  Reserve Materiel (PWRM) Strategic Policy, and included information that  addresses one of the six reporting elements enumerated in section 321 of  the NDAA for fiscal year 2014. The table below presents our assessment  of DOD’s strategic policy.
Table: GAO’s Assessment of DOD’s Strategic Policy Compared to the Six Reporting Elements Required by the National  Defense Authorization Act for Fiscal Year 2014  GAO Assessment of  DOD’s Strategic Policy  Addressed  (1) Overarching strategic guidance concerning  planning and resource priorities that link the  Department of Defense’s current and future needs  for prepositioning stocks, such as desired  responsiveness, to evolving national defense  objectives.
DOD’s strategic policy requires the Under Secretary  of Defense for Policy to develop and coordinate  planning and resource requirements – such as  those found in the Guidance for Employment of the  Force and the Defense Planning Guidance – so that  war materiel and prepositioned war reserve materiel  is appropriately linked to desired capabilities in  support of the national defense strategy. In addition,  the strategic policy requires the Under Secretary of  Defense for Acquisition, Technology, and Logistics  and the DOD Component heads to maintain  guidance that includes component-specific  requirements for planning and resourcing priorities  to address current and future requirements for  maintaining prepositioned stocks optimally.
subsections: section_title: Reporting Elements
paragraphs: GAO Assessment of  DOD’s Strategic Policy  Not Addressed  (2) A description of the department’s vision for  prepositioning programs and the desired end  state.
DOD’s strategic policy does not include information  describing the department’s vision for prepositioning  programs and the desired end state. Rather, the  strategic policy assigns the Under Secretary of  Defense for Acquisition, Technology, and Logistics  and the DOD Component heads with the  responsibility of maintaining guidance that includes  a description of the component’s vision and desired  end state. (3) Specific interim goals demonstrating how the  vision and end state will be achieved.
DOD’s strategic policy does not include information  on specific interim goals describing how the  department’s vision and end state will be achieved.  Rather, the strategic policy assigns the Under  Secretary of Defense for Acquisition, Technology,  and Logistics and the DOD Component heads with  the responsibility of maintaining guidance that  includes specific interim goals demonstrating how  the component’s vision and end state will be  achieved. (4) A description of the strategic environment,  requirements for, and challenges associated with  prepositioning.
DOD’s strategic policy does not include a  description of the strategic environment,  requirements for, and challenges associated with,  prepositioning stocks. Rather, the strategic policy  assigns the Under Secretary of Defense for  Acquisition, Technology, and Logistics, the Under  Secretary of Defense for Policy, and the DOD  Component heads the responsibility for providing  guidance on the strategic environment,  requirements for, and challenges associated with  prepositioning stocks. (5) Metrics for how the Department will evaluate  the extent to which prepositioned assets are  achieving defense objectives.
The strategic policy does not include metrics to  evaluate whether prepositioned assets are  achieving defense objectives. Rather, the strategic  policy assigns the Chairman of the Joint Chiefs of  Staff with the responsibility for developing metrics  regarding DOD’s prepositioned stock programs. (6) A framework for joint departmental oversight  that reviews and synchronizes the military  services’ prepositioned strategies to minimize  potentially duplicative efforts and maximize  efficiencies in prepositioned stocks across the  Department of Defense.
The strategic policy does not include a framework  for joint departmental oversight. Rather, the  strategic policy assigns the Chairman of the Joint  Chiefs of Staff with the responsibility for developing  such a framework for synchronizing the services’  prepositioning stock programs.
As the table shows, DOD addressed the first element in section 321 of  the NDAA for fiscal year 2014 by describing strategic planning and  resource guidance. However, we assessed the remaining elements as  not addressed because DOD did not provide the required information in  its strategic policy. Officials from the Office of the Under Secretary of  Defense for Policy stated that the strategic policy does not include this  information because it is intended to serve as a directive for developing  policies and assigning key responsibilities, which can be used as a  mechanism for addressing required elements at a later time. However,  the NDAA for fiscal year 2014 required that these elements be included in  the strategic policy. Specifically:
Element 2 (Description of the Department’s Vision and Desired  End State) and Element 3 (Specific Interim Goals): DOD’s strategic  policy does not include a description of the department’s vision and  the desired end state for its prepositioning programs, as required by  element 2, or specific interim goals for achieving the department’s  vision and desired end state, as required by element 3. Rather, the  strategic policy assigns the Under Secretary of Defense for  Acquisition, Technology, and Logistics and the DOD Component  heads the responsibility for providing guidance that includes a  description of the component’s vision and desired end stats as well as  specific interim goals for achieving the component’s vision and  desired end state. DOD officials from the offices of the Under  Secretary of Defense for Policy and the Joint Staff acknowledged that  the strategic policy does not include a department-wide vision, desired  end state, and specific interim goals. However, the NDAA for fiscal  year 2014 requires a department vision, not a component vision.  Moreover, for the past 6 years in our annual reports on duplication,  overlap, and fragmentation and in our related reports, we have  identified the potential for duplication in the services’ prepositioned  stock programs due to the absence of a department-wide strategic  policy and joint oversight. Such joint oversight is necessary to  articulate a single, department-wide vision and interim goals. By not  including the department’s vision or interim goals in its strategic  policy, and instead, directing the Under Secretary of Defense for  Acquisition, Technology, and Logistics and the DOD Component  heads to provide guidance on the component’s vision, DOD is  continuing its fragmented approach to managing its prepositioned  stock programs by further emphasizing individual visions rather than a  joint, department-wide view. Unless DOD revises its policy or includes  in other guidance a department-wide vision, desired end state, and  goals for its prepositioned stock programs, DOD risks being unable to  recognize potential efficiencies that could be gained by synchronizing  the services’ prepositioning programs with each other.
Element 4 (Description of the Strategic Environment and  Challenges): DOD’s strategic policy does not include a description of  the strategic environment, or the requirements for and challenges  associated with prepositioned stocks as required by element 4.  Rather, it directs the Under Secretary of Defense for Acquisition,  Technology, and Logistics, the Under Secretary of Defense for Policy,  and the DOD Component heads to provide guidance on this element.  We believe that if the Under Secretaries issue such guidance as  directed, DOD and the services will be able to have a shared  understanding of the strategic environment, requirements, and  challenges of managing their prepositioned stocks, which could  promote joint oversight and efficiencies across the department.
Element 5 (Metrics): DOD’s strategic policy does not include metrics  for evaluating the extent to which DOD prepositioned stocks are  achieving defense objectives as required by element 5. Rather, the  policy assigns the Chairman of the Joint Chiefs of Staff with the  responsibility for developing metrics. We believe that if the Chairman  develops such metrics as directed, DOD and the services will have  common criteria with which to measure their programs. However,  DOD will not be able to create informed metrics before first  addressing other elements such as developing a department vision,  goals, and articulating the strategic environment.
Element 6 (Framework for Joint Departmental Oversight): DOD’s  strategic policy does not include a framework for joint departmental  oversight that reviews and synchronizes the military services’  prepositioned strategies to minimize potentially duplicative efforts and  maximize efficiencies in prepositioned stocks across DOD, as  required by element 6. Rather, the policy assigns the Chairman of the  Joint Chiefs of Staff with the responsibility for establishing the  framework. We have reported for years that DOD lacks joint oversight  of its prepositioned programs. We believe that if the Chairman of the  Joint Chiefs of Staff develops such a framework, as directed by the  policy, DOD and the services will be better able to integrate and align  at a department-wide level its prepositioning programs in order to  achieve efficiencies and avoid duplication.
Further, DOD has not yet issued an implementation plan for managing its  prepositioned stock programs, which was also required by Section 321 of  the NDAA for fiscal year 2014. The NDAA required DOD to complete the  plan by April 24, 2014. In May 2017, DOD officials stated that they were  reviewing information on the military services’ prepositioning strategies for  consolidation into a department-wide implementation plan. They  anticipated that a plan would be finalized by September 30, 2017. It will  be important for DOD to address the elements that were omitted from its  strategic policy as it creates the implementation plan to ensure that the  plan is linked to a complete strategy on prepositioned stocks for the  department.
section_title: Conclusions
paragraphs: Prepositioned stocks play a pivotal role during the initial phases of an  operation. We have reported for the past 6 years on the importance of  DOD having a department-wide strategic policy and joint oversight of the  services’ prepositioned stock programs, and Congress has required DOD  to take action in this area. While it is encouraging that DOD has recently  issued a strategic policy, the policy does not address most of the required  elements enumerated in section 321 of the NDAA for fiscal year 2014. In  the cases of a description of the strategic environment and challenges,  metrics, and a framework for joint departmental oversight, DOD’s policy  appropriately assigns responsibility for the development of such  information, and therefore we are not making recommendations related to  those elements because the department has already directed their  implementation. However, for the description of the department’s vision  and desired end state and specific interim goals, DOD’s strategic policy  does not include the required information and instead directs the  development of the component’s vision, end state, and goals, which  reinforces a fragmented and potentially duplicative approach to managing  prepositioned stocks across the services. Without either revising its  strategic policy or including in other guidance the department’s vision,  end state, and goals for its prepositioned stock programs, DOD will  continue to be ill positioned to recognize potential duplication, achieve  efficiencies, and fully synchronize the services’ prepositioned stock  programs across the department.
section_title: Recommendations for Executive Action
paragraphs: To improve DOD’s management of its prepositioned stocks and reduce  potential duplication among the services’ programs, we recommend that  the Secretary of Defense direct the Under Secretary of Defense for  Acquisition, Technology, and Logistics, in coordination with the Chairman  of the Joint Chiefs of Staff, to revise DOD’s strategic policy or include in  other department-wide guidance: a description of the department’s vision and the desired end state for  its prepositioned stock programs, and  specific interim goals for achieving that vision and desired end state.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD for review and comment. DOD  provided written comments on the draft, which are reprinted in appendix  II. DOD concurred with our recommendations and noted it is taking steps  to implement them. We also received technical comments from DOD,  which we incorporated throughout our report as appropriate.
We are providing copies of this report to the appropriate congressional  committees, the Secretary of Defense, the Under Secretary of Defense  for Acquisition, Technology, and Logistics, and the Chairman of the Joint  Chiefs of Staff. In addition, this report is available at no charge on the  GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-5431 or russellc@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix III.
section_title: Appendix I: Required Elements for the Department of Defense’s Implementation Plan on Prepositioned Stocks
paragraphs: Section 321 of the National Defense Authorization Act (NDAA) for fiscal  year 2014 required that the Department of Defense (DOD) establish an  implementation plan for its programs of prepositioned stocks. The  implementation plan for the prepositioning strategic policy shall include  the following elements:  A.  Detailed guidance for how the Department of Defense will achieve the  vision, end state, and goals outlined in the strategic policy.
B.  A comprehensive list of the Department’s prepositioned stock  programs.
C.  A detailed description of how the plan will be implemented.
D.  A schedule with milestones for the implementation of the plan.
E.  An assignment of roles and responsibilities for the implementation of  the plan.
F.  A description of the resources required to implement the plan.
G.  A description of how the plan will be reviewed and assessed to  monitor progress.
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, individuals who made key  contributions to this report include Alissa H. Czyz, Assistant Director;  Vincent M. Buquicchio, Tracy W. Burney, Lionel C. Cooper, Richard  Powelson, Courtney R. Bond, and Michael D. Silver.