Force Structure: Department of the Navy's Tactical Aviation Integration Plan Is Reasonable, but Some Factors Could Affect Implementation
Published: 2004-08-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Fiscal Year 2004 Defense Appropriations Act and the Senate Report for the 2004 National Defense Authorization Act mandated that GAO examine the Navy and Marine Corps' Tactical Aviation Integration Plan. In response to these mandates, this report addresses (1) how Navy and Marine Corps operational concepts, force structure, and procurement costs change; (2) the methodology and assumptions the services used to analyze the potential for integrating the forces; (3) the analytical process the services used to decide which reserve squadrons to decommission; and (4) other factors that might affect implementation of the Plan.
section_title: What GAO Found
paragraphs: Concerns about the affordability of their prior tactical aviation procurement plan prompted the Navy and Marine Corps to agree to a new Tactical Aviation Integration Plan. Under this Plan, the two services will perform their missions using fewer units of more capable aircraft and reducing total program aircraft procurement costs by $28 billion over the next 18 years. Operationally, the Navy and Marine Corps will increase the extent to which their tactical aviation units are used as a combined force to accomplish both services' missions. The Plan also reduces the services' tactical aviation force structure by decommissioning five squadrons, thus decreasing the number of Navy and Marine Corps squadrons to 59, and reduces the total number of aircraft they plan to buy from 1,637 to 1,140. The Department of the Navy based its conclusion that it could meet the Navy and Marine Corps' operational requirements with a smaller force primarily on the findings of a contractor study that evaluated the relative capability of different tactical aviation force structures. GAO's review of the contractor's methodology and assumptions about force structure, budget resources, and management efficiencies suggests that much of the analysis appears reasonable. However, GAO noted some limitations--including the lack of analytical support for reducing the number of backup aircraft--increase the risk that the smaller force will be less effective than expected. The Navy and Marine Corps each followed a different process in selecting a reserve squadron to decommission. The Marine Corps made a clear and well-documented analysis of the operational, fiscal, logistical, and personnel impacts of different options that appears to provide decision makers with a reasonable basis for selecting the Reserve unit to decommission. By contrast, the Navy selected its reserve squadron without clear criteria or a documented, comprehensive analysis, and thus with less transparency in its process. Two other factors that might affect successful implementation of the Plan are the potential unavailability of readiness funding and delays in fielding the new force. Although the contractor recommended that the Navy identify future readiness-funding requirements, to date, the Navy has not conducted this analysis. In addition, the Department of the Navy is experiencing engineering and weight problems in developing the Joint Strike Fighter that will cause it to be delayed until 2013, at least 1 year later than had been projected, and other high risks to the program remain. Because these delays will cause the Navy to operate legacy aircraft longer than expected, they might also increase operations and maintenance costs, making an analysis of future readiness funding requirements even more important.

section_title: Letter
paragraphs: The Department of the Navy formerly planned to spend almost $92 billion  by fiscal year 2021 to replace legacy F/A-18C/D, F-14, and AV-8 aircraft  with newer F/A-18E/Fs and the future Joint Strike Fighter aircraft.  Concerned that it could not afford to purchase as many of these aircraft as  originally planned, however, in fiscal year 2002 the Department of the  Navy announced a new Tactical Aviation Integration Plan, whereby the  Navy and Marine Corps concluded that they would be able to achieve their  missions with fewer aircraft and units by operating as a combined force.
Out of concern about how the Navy and Marine Corps’ future plans for  their tactical aviation forces would affect mission capability, Congress  mandated that GAO examine the Navy and Marine Corps’ Tactical Aviation  Integration Plan. In the Fiscal Year 2004 Defense Appropriations Act,  Congress directed GAO to assess Navy and Marine Corps requirements for  tactical aviation and the role of Navy and Marine Corps Reserve assets in  meeting such requirements. In addition, the Senate Report for the  National Defense Authorization Act for Fiscal Year 2004 directed GAO to  analyze the Navy and Marine Corps’ Plan to determine the validity of the  assumptions made in formulating the Plan, the expected impact of the  Plan on Navy and Marine Corps force structure, and the ability of the  smaller force structure to meet operational requirements. After meeting  with your offices, we agreed on a strategy for completing work in response  to both mandates and agreed to provide an interim briefing and a final  report. We briefed your offices on our results from late February through  April 2004.
Based on our work in response to these mandates, this final report  addresses the following questions:  1.  How would Navy and Marine Corps operational concepts, force  structure, and procurement costs change under the Plan?  2.  What methodology and assumptions did the Navy and Marine Corps  use to analyze the potential for integrating tactical aviation assets, and  what, if any, limitations affect the services’ analysis?  3.  To what extent did the Navy and Marine Corps use a thorough and  well-documented process to assess which reserve squadrons should be  decommissioned in fiscal year 2004 to implement the Plan?  4.  What other factors might affect the implementation of the Plan?
To accomplish these objectives, we analyzed the contractor study that  supports the Plan by reviewing its methodology, major assumptions, and  modeling input and approach. We also obtained information from officials  at Navy and Marine Corps Headquarters, Navy and Marine Corps Reserve  Headquarters, Joint Forces Command, Atlantic and Pacific Naval Air  Forces Headquarters, and Marine Forces Atlantic Headquarters in order to  verify and assess both the information contained in the study and the  resulting decisions about force structure, procurement plans, and  operational impacts. We assessed the reliability of the services’ data by  reviewing the methodology and pertinent contractor and service  information used for the study and the Plan. In addition, as part of our  analysis, we visited selected Navy and Marine Corps Reserve tactical  aviation units in order to get their perspective on the possible  decommissioning of reserve squadrons as well as future roles and  missions.
subsections: section_title: Background
paragraphs: The Department of Defense’s 2001 Defense Planning Guidance tasked the  Department of the Navy to conduct a comprehensive review to assess the  feasibility of fully integrating Navy and Marine Corps aviation force  structure to achieve both effectiveness and efficiency. The Department of  the Navy narrowed the study to include only fixed-wing tactical aviation  assets because of affordability concerns. Specifically, Navy officials were  concerned that the projected procurement budget would not be sufficient  to buy as many F/A-18E/Fs and Joint Strike Fighter aircraft as originally  planned. The difference between the funding needed to support the Navy’s  original plan for procuring tactical aircraft and the Navy’s projected  procurement budget is shown in figure 1.
Figure 1 shows that, starting in fiscal year 2005, the Navy’s typical aviation  allocation of $3,200 million per year would not be sufficient to support the  previous procurement plan for F/A-18E/F and Joint Strike Fighter aircraft.
In December 2001, the Chief of Naval Operations and the Commandant of  the Marine Corps jointly commissioned a contractor to study the feasibility  of integrating Naval tactical aviation. The study prompted a memorandum  of agreement between the Navy and Marine Corps in August 2002 to  integrate their tactical aviation assets and buy fewer aircraft than  originally planned.
section_title: Plan Changes the Navy and Marine Corps’ Operational Concepts and Reduces Force Structure to Achieve Procurement Savings
paragraphs: The Plan proposes that the Navy and Marine Corps (1) merge operational  concepts; (2) reduce the number of squadrons, aircraft per squadron, and  backup aircraft; and (3) reduce the total number of aircraft to be procured  in the future. The Department of the Navy anticipates that these changes  will save approximately $28 billion in procurement costs over the next  18 years through fiscal year 2021.
subsections: section_title: Navy and Marine Corps Merge Concepts of Operation
paragraphs: Operationally, the Navy and Marine Corps would increase the extent to  which their tactical aviation units are used as a combined force for both  services. Under the Plan, the Navy and Marine Corps would increase  cross deployment of squadrons between the services and would further  consolidate missions and operations through changes in aircrew training  and the initiation of command-level officer exchanges.
Under the Plan, the Marine Corps would increase the number of squadrons  dedicated to carrier air wings, and the Navy would begin to dedicate  squadrons to Marine Aircraft Wings. In 2003 the Marine Corps began to  provide the Navy with the first of six additional dedicated squadrons to  augment four squadrons already integrated into carrier air wings during  the 1990s. As a result, each of the Navy’s 10 active carrier air wings would  ultimately include one Marine Corps squadron by 2012. Concurrently, the  Navy would integrate three dedicated squadrons into Marine Aircraft  Wings by 2008, primarily to support the Marine Corps Unit Deployment  Program rotations to Japan. The first Navy squadron to deploy in support  of Marine Corps operations would occur in late fiscal year 2004, with other  squadrons to follow in fiscal years 2007 and 2008.
As part of the new operating concept, the Department of the Navy would  satisfy both Navy and Marine Corps missions using either Navy or Marine  Corps squadrons. Traditionally, the primary mission of Navy tactical  aviation has been to provide long-range striking power from a carrier,  while Marine Corps tactical aviation provided air support for ground  forces. Navy and Marine Corps tactical aviation squadrons will retain their  primary mission responsibilities, but units that integrate would  additionally be responsible to train as well as perform required mission  responsibilities of the other service. For example, if a Navy squadron were  assigned to the Marine Corps Unit Deployment Program, its pilots would  receive more emphasis on training for close air support missions, and,  similarly, Marine Corps pilots would place more emphasis on long-range  strike missions before deploying with a carrier air wing. Moreover, Navy  and Marine Corps officers would exchange Command positions to further  develop a more unified culture. For instance, a Marine Corps colonel  would command a carrier air wing, while a Navy captain would command  a Marine Corps Aircraft Group.
section_title: Plan Expected to Reduce Total Number of Squadrons, Aircraft per Squadron, and Backup Aircraft
paragraphs: As indicated in table 1, the Department of the Navy would create a smaller  tactical aviation force structure consisting of fewer squadrons, reduced  numbers of aircraft per squadron, and fewer backup aircraft. The number  of tactical aviation squadrons would decrease from 68 under the previous  plan to 59 by 2012. To achieve this reduction of nine squadrons, the  department would    cancel plans to reestablish four active Navy squadrons as anticipated  under its prior procurement plan,    decommission one Marine Corps Reserve squadron as well as one Navy  Reserve squadron in 2004, and    decommission three active Navy squadrons. The first active squadron is  scheduled to be decommissioned in fiscal year 2006; two other  squadrons are to be decommissioned from fiscal year 2010 through  fiscal year 2012.
Under the Plan, the number of aircraft assigned to some tactical aviation  squadrons would be reduced. All Navy and Marine Corps F/A-18C  squadrons that transition to the future Joint Strike Fighter aircraft would  be reduced from 12 to 10 aircraft. In addition, Navy F/A-18F squadrons will  be reduced from 14 to 12 aircraft. Furthermore, by 2006, aircraft assigned  to the remaining two Navy and three Marine Corps Reserve squadrons  would be reduced from 12 to 10. By reducing the aircraft assigned to  squadrons, the size of Navy air wings will transition from 46 to 44 aircraft  in 2004, as the Navy procures new aircraft. A notional air wing in the  Navy’s current force is made up of 46 aircraft comprising a combination of  F/A-18C and F-14 squadrons. However, by 2016, carrier air wings would  contain 44 aircraft made up of two squadrons of 10 Joint Strike Fighters,  one squadron of 12 F/A-18E fighters, and one squadron of 12 F/A-18F  fighters.
The Department of the Navy’s Plan would also reduce the number of  backup aircraft to be procured from 745 (under the previous program) to  508, for a total reduction of 237 aircraft. Backup aircraft consist of those  aircraft that are not primarily assigned to active or reserve squadrons.  Specifically, backup aircraft are necessary to meet a variety of needs  such as  training new pilots;  replacing aircraft that are either awaiting or undergoing depot-level  repair;    meeting research, development, and test and evaluation needs;    attrition during peacetime or wartime operations; and    meeting miscellaneous requirements, such as adversary training and  the Blue Angels demonstration team.
section_title: Plan Expected to Reduce Procurement of Tactical Fighters and Save Procurement Costs
paragraphs: In implementing the Plan, the Department of the Navy expects to reduce  the number of tactical aviation aircraft it will purchase by 497—from 1,637  to 1,140. As indicated in table 2, it plans to procure, respectively, 88 and  409 fewer F/A-18E/F and Joint Strike Fighter aircraft. Almost half (237, or  48 percent) of the expected reduction in aircraft procurement is  attributable to the plan to have fewer backup aircraft. By reducing the  total number of new tactical aviation aircraft to be procured, the  Department of the Navy now expects that its new procurement program  will cost about $64 billion, as compared with nearly $92 billion for the  previously planned force, resulting in a savings of approximately  $28 billion.
section_title: Navy’s Analysis Generally Appears Reasonable, but Some Limitations Could Understate Risks
paragraphs: The Department of the Navy based its conclusion that it could meet its  operational requirements with a smaller force primarily on the results of a  contractor study. The contractor’s analysis generally appeared reasonable  because it assessed the relative capability of different tactical aviation  force structures and included important assumptions about force  structure, budget resources, and management efficiencies. However, from  our review of the contractor’s methodology and assumptions, we  identified some limitations in its analysis that may understate the risk  associated with implementing some aspects of the Plan. These limitations  include (1) the contractor’s decision to model only the carrier version of  the Joint Strike Fighter despite the Marine Corps’ plans to operate Short  Take Off and Vertical Landing aircraft on carriers, (2) the contractor’s  limited studies supporting recommended reductions in backup aircraft,  and (3) the contractor’s method for determining aircraft capabilities used  in the force analyses.
subsections: section_title: Methodology Compared Relative Force Structure Capabilities
paragraphs: The contractor modeled the effectiveness of the current force, the larger  force that the Navy had previously planned to buy, and the study’s  recommended smaller force at three stages of a notional warfight. The  warfight was based on a generic composite scenario that was developed  with input from the Air Force and Army. It has been previously used by the  Joint Strike Fighter Program Office to assess the effectiveness of a joint  strike force in terms of phases of a warfight; geographical location of  combat forces; the characteristics of targets, such as type and hardness;  and whether targets are mobile. During the forward presence phase of the  contractor’s modeling scenario, one carrier battle group and one  amphibious readiness group were deployed, and aircraft operated at a  maximum distance of 400 nautical miles from the carrier. In the buildup  phase, three carrier battle groups and three amphibious groups were  deployed in one theater, and aircraft operated at a maximum distance of  150 nautical miles. During the mature phase, eight carrier battle groups,  eight amphibious readiness groups, and 75 percent of all other assets were  deployed to land-based sites, and aircraft operated at a maximum distance  of 150 nautical miles from the carrier.
To measure combat effectiveness levels, the contractor methodically  compared the estimated capabilities of the current force, the previously  planned force, and the recommended force to hit targets and perform  close air support. To determine the relative capabilities of each aircraft  comprising these forces, the contractor convened a panel of experts who  were familiar with planned capability and used official aircraft  performance data to score the offensive and defensive capabilities of  different aircraft across a range of missions performed during the three  stages of the warfight. As indicated in figure 2, the experts determined that  the Joint Strike Fighter, which is still in development, will be the most  capable aircraft and assigned it a baseline score of 1 compared with the  other aircraft.
Figure 2 also shows that based on the capability scores assigned other  aircraft, the Joint Strike Fighter is expected to be approximately nine  times more capable than the AV-8B Harrier aircraft, about five times more  capable than the F-14D and F/A-18 A+/C/D aircraft, three times more  capable than the first version of the F/A-18 E/F aircraft, and 50 percent  more capable than the second version of the F/A-18E/F. In addition, the  contractor measured the percentage of units deployed in order to ensure  that Navy and Marine Corps personnel tempo and operational tempo  guidelines for peacetime were not exceeded.
The study concluded that, because of the expected increase in the  capabilities of F/A-18 E/F and the Joint Strike Fighter aircraft, both the  previously planned force and the recommended new smaller force were  more effective than today’s force. Furthermore, the new smaller force was  just as effective in most instances as the previously planned force because  the smaller force had enough aircraft to fully populate aircraft carrier  flight decks and therefore did not cause a reduction in the number of  targets that could be hit. However, the analysis showed that beginning in  2015, there would be a 10 percent reduction in effectiveness in close air  support during the mature phase of a warfight because fewer squadrons  and aircraft would be available to deploy to land bases. The analysis also  showed that the smaller force stayed within personnel and operational  tempo guidelines during peacetime.
section_title: Analysis Included Reasonable Assumptions
paragraphs: The contractor’s analysis was based on three key assumptions that  generally appeared to be reasonable and consistent with DOD plans. First,  it assumed that the future naval force structure would include 12 carrier  battle groups, supported by 1 reserve and 10 active carrier air wings, and  12 amphibious readiness groups. The 2001 Quadrennial Defense Review  validated this naval force structure and judged that this force structure  presented moderate operational risk in implementing the defense strategy.  Second, it assumed that the Navy and Marine Corps’ tactical aviation  procurement budget would continue to be about $3.2 billion in fiscal year  2002 dollars annually through 2020. This was based on the Department of  the Navy’s determination that the tactical aviation procurement budget  would continue to represent about 50 percent of the services’ total aircraft  procurement budget as it had in fiscal years 1995 to 2002. Third, it  assumed that the Department of the Navy could reduce the number of  backup aircraft it buys based on expected efficiencies in managing its  backup aircraft inventory.
section_title: Some Limitations in the Navy’s Analysis Understate Risks in Implementing the Plan
paragraphs: Our analysis also showed, however, that certain limitations derived from  the contractor’s study could add risk to the expected effectiveness of the  future smaller force. These limitations are  the study’s modeling assumption that the effectiveness of the Marine  Corps’ Short Takeoff and Vertical Landing version of the Joint Strike  Fighter would be the same as the Navy’s carrier version despite  projected differences in their capability;  the study’s assumption that certain efficiencies in the management of  backup aircraft could be realized, without documenting and providing  supporting analyses substantiating how they would be achieved; and  the study’s process for assigning capability measures to aircraft which,  because of its subjectivity, could result in an overestimation of the  smaller force’s effectiveness.
subsections: section_title: Projected Capability Differences of Joint Strike Fighter Versions Could Affect Expected Effectiveness of Smaller Tactical Aviation Force
paragraphs: The contractor’s study assumed that all Joint Strike Fighters aboard Navy  carriers, including those belonging to the Marine Corps, would have the  performance characteristics of the carrier version of that aircraft.  However, the Marine Corps plans to operate only the Short Takeoff and  Vertical Landing version of the aircraft, which is projected to be  significantly less capable than the carrier version in terms of range and  payload (number of weapons it can carry). The Marine Corps believes this  version is needed to satisfy its requirement to operate from austere land  bases or amphibious ships in order to quickly support ground forces when  needed. But the carrier version’s unrefueled range and internal payload are  expected to exceed those of the Short Takeoff and Vertical Landing  version by approximately 50 and 100 percent, respectively.
The contractor mitigated the differences in the two versions’ capabilities  by modeling a scenario whereby the aircraft would operate from carriers  located 150 miles from the targets during the mature phase of the  warfight—well within the range of the Marine Corps’ version. By contrast,  during Operation Iraqi Freedom, many of the targets struck from carriers  would have been outside the range of the Short Takeoff and Vertical  Landing version of the aircraft unless in-flight refueling was performed,  thereby reducing its effectiveness. The study noted that because of the  differences in performance, substitution of the Short Takeoff and Vertical  Landing version for the carrier version would result in decreased  effectiveness when the Short Takeoff and Vertical Landing version’s  performance parameters are exceeded. However, the study did not  conduct additional analyses to quantify the impact of using Short Takeoff  and Vertical Landing aircraft aboard carriers. Therefore, if the Plan is  implemented whereby the Marine Corps operates the Short Takeoff and  Vertical Landing version of the aircraft exclusively as one of four tactical  aviation squadrons aboard each carrier, under a different scenario  featuring a greater range to targets, the overall effectiveness of the tactical  fighter group could be less than what the contractor’s study predicted.  Navy officials acknowledged that operating the Short Takeoff and Vertical  Landing Joint Strike Fighter aircraft from carriers presents a number of  challenges that the Navy expects to address as the aircraft progresses  through development.
section_title: Projected Efficiencies in Managing Backup Aircraft Were Based on Limited Analysis
paragraphs: The contractor’s study recommended cutting 351 backup aircraft based on  expected improvements and efficiencies in the Navy’s management of  such aircraft. The study identified three main factors prompting its  conclusion that fewer backup aircraft would be needed.
Actual historical attrition rates for F/A-18 aircraft, according to the  Navy, suggest that the attrition rate for the F/A-18E/F and Joint Strike  Fighter could be lower than expected. The Navy determined that  attrition might be only 1 percent of total aircraft inventory, rather than  the expected 1.5 and 1.3 percent included in the Navy’s original  procurement plan for the aircraft respectively; thus, fewer attrition  aircraft would suffice.
Business practices for managing aircraft in the maintenance pipeline  could be improved. According to the contractor, if Navy depots  performed as much maintenance per day as Air Force depots, it  appears that the Navy could reduce the number of aircraft in the  maintenance pipeline; thus, fewer aircraft could suffice.
Testing, evaluating, and aircrew training could become more efficient.  According to the contractor’s study, fewer aircraft would be needed to  test and evaluate future technology improvements because of the Navy  and Marine Corps’ two Joint Strike Fighter variants (the carrier and  Short Takeoff and Vertical Landing versions would have many common  parts). In addition, advances in trainer technology and the greater  sortie generation capability of the newer aircraft could enable them to  achieve more training objectives in a single flight; thus, fewer aircraft  could suffice.
Although the contractor recognized the potential of these efficiencies  when recommending the reduction to the number of backup aircraft, it did  not fully analyze the likelihood of achieving them. According to the  contractor, it recommended the reduction based on limited analysis of the  potential to reduce the number of attrition and maintenance pipeline  aircraft. As a result, the contractor also recommended that the Department  of the Navy study whether it could achieve expected maintenance  efficiencies by improving its depot operations. However, the department  has not conducted such an assessment.
The Department of the Navy considered the risk of cutting 351 aircraft too  high and instead decided to cut only 237 backup aircraft—the number  reflected in the Navy’s plan. Historically, the Navy’s backup inventory has  equaled approximately 95 percent of the number of combat aircraft. The  contractor recommended that the Navy reduce its backup aircraft  requirement to 62 percent of its planned inventory of combat aircraft.  Concerned that this might be too drastic a cut, the Navy decided to use  80 percent when determining the number of backup aircraft in its Plan.  Although the Plan’s higher ratio of backup aircraft to combat aircraft will  reduce operational risk by having more aircraft available for attrition and  other purposes, the Navy’s 80 percent factor was not based on a  documented analysis. Navy officials noted that because of budget  limitations, it would be difficult to purchase additional aircraft to support  the smaller tactical aviation force in case some of the projected  efficiencies are not realized.
section_title: Subjectivity in Aircraft Capabilities Scoring Could Reduce Expected Force Effectiveness
paragraphs: The contractor relied on aircraft capability scores assigned by a panel of  experts as a basis for comparing the relative effectiveness of the aircraft  and alternative force structures examined. The results showed that by  2020, the previously planned and new smaller force would be four times  more effective at hitting targets than the current force. However, the  panelists subjectively determined the capability scores from official  aircraft performance parameters provided by the Navy. The contractor  reportedly conducted a “sensitivity analysis” of the aircraft capability  scores and found that changing the scores affected the forces’ relative  effectiveness. Since the contractor did not retain documentation of the  analysis, we could not verify the quality of the scoring, nor attest that the  relative effectiveness of the new force will be four times greater than the  current force as the study reported. Nevertheless, the contractor’s  acknowledgement that score variations could affect relative force  effectiveness raises the possibility that the estimated increases in  effectiveness, both for the previously planned force and for the  recommended smaller force, might not be as high as the study concluded.  Navy and Marine Corps officials agreed that gaining a significant increase  in total capability was key to accepting a smaller, more capable tactical  aviation force. However, if the capability of the recommended smaller  force is significantly less than that indicated by the study, the smaller  force’s ability to meet both Navy and Marine Corps’ mission requirements  could be adversely affected.
section_title: In the Absence of DOD Criteria, the Marine Corps and Navy Used Different Methods and Documentation Standards to Determine Which Reserve Units to Decommission
paragraphs: The Navy and Marine Corps took significantly different approaches toward  the task of assessing and documenting their decisions on which reserve  units to decommission. The Marine Corps used a well-documented  process that clearly showed what criteria were applied to arrive at its  decision, whereas the Navy’s approach lacked clarity and supporting  documentation about how different options were evaluated. DOD has not  developed criteria to guide such decommissioning decisions. In a previous  report, we reviewed the Air Force’s decision to reduce and consolidate the  B-1B bomber fleet and found that Air Force officials did not complete a  formal comprehensive analysis of potential basing options in order to  determine whether they were choosing the most cost-effective units to  keep. We also stated that in the absence of standard guidance for  analyzing basing alternatives, similar problems could occur in the future.  In this instance, the absence of standard DOD guidance for analyzing and  documenting decommissioning alternatives allowed the Navy to use a very  informal and less transparent process to determine which reserve  squadron to decommission in fiscal year 2004. The lack of a formal  process could also hinder transparency in making such decisions in the  future, which adversely affects Congress’s ability to provide appropriate  oversight.
subsections: section_title: The Marine Corps Conducted a Comprehensive Analysis to Support Decommissioning Decision
paragraphs: The Marine Corps established a team that conducted and documented a  comprehensive review to support its decision about which Marine Corps  Reserve squadron to decommission. In conducting its analysis, the Marine  Corps assumed that (1) reserve assets that had not been decommissioned  must be optimized for integration in future combat roles, (2) mission  readiness and productivity are crucial, and (3) the political and legal  ramifications of deactivating reserve units must be considered. The study  team established a set of criteria consisting of personnel, operational,  fiscal, logistical, and strategic factors and applied these criteria when  evaluating each of the Marine Corps’ four reserve squadrons. Table 3  identifies the selection criteria applied to each squadron.
The study results were presented to the Marine Requirements Oversight  Council for review and recommendation and to the Commandant of the  Marine Corps. The Commandant decided in May 2004 to decommission   reserve squadron VMFA-321 located at Andrews Air Force Base, Maryland,  by September 2004.
section_title: The Navy Did Not Conduct a Formal Analysis or Provide Documentation to Support Its Decommissioning Decision
paragraphs: In December 2003, the Navy decided to decommission one of three Navy  Reserve tactical aviation squadrons, VFA-203, located in Atlanta, Georgia.  The Chief of Naval Reserve stated that the Navy used a variety of criteria  in deciding which unit to decommission. These criteria included the  squadrons’ deployment history, the location of squadrons in relation to  operating ranges, and the location of a reserve intermediate maintenance  facility. Navy officials, however, could not provide documentation of the  criteria or the analysis used to support its decision. Without such  documentation to provide transparency to the Navy’s process, we could  not determine whether these criteria were systematically applied to each  reserve squadron. Furthermore, we could not assess whether the Navy had  systematically evaluated and compared other factors such as operational,  personnel, and financial impacts for all Navy Reserve squadrons.
section_title: Two Other Factors Could Affect the Plan’s Implementation and Add Risk
paragraphs: Two other factors could adversely affect the successful implementation of  the Plan and increase the risk level assumed at the time the contractor  completed the study and the Navy and Marine Corps accepted the Plan.  These factors are (1) uncertainty about requirements for readiness funding  to support the tactical aviation force and (2) projected delays in fielding  the Joint Strike Fighter aircraft that might cause the Department of the  Navy not to implement the Plan as early as expected and might increase  operations and maintenance costs. If these factors are not appropriately  addressed, the Department of the Navy may not have sufficient funding to  support the readiness levels required for the smaller force to meet the  Navy and Marine Corps’ missions, and the transition to the Plan’s force  might be more costly than anticipated.
The contractor’s study stated that because the Navy and the Marine Corps  would have a combined smaller tactical aviation force under the Plan, the  services’ readiness accounts must be fully funded to ensure that the  aircraft readiness levels are adequate to meet the mission needs of both  services. Furthermore, the contractor recommended that the Navy  conduct an analysis to determine the future readiness funding  requirements and ensure that the Navy has a mechanism in place to fully  fund the readiness accounts. So far, the Navy has not conducted this  analysis, nor has it addressed how it will ensure that the readiness  accounts will be fully funded because Navy officials noted that they  consider future budget estimates to be adequate. However, a recent  Congressional Research Service evaluation of the Plan noted that  operations and maintenance costs have been growing in recent years for  old aircraft and that new aircraft have sometimes, if not often, proved  more expensive to maintain than planned. Furthermore, our analysis of  budget data for fiscal years 2001-3 indicates that the Department of the  Navy’s operations and maintenance costs averaged about $388 million  more than what was requested for tactical aviation and other flight  operations. Without a review of future readiness funding requirements, the  Navy cannot be certain that sufficient funding will be available to maintain  the readiness levels that will enable the smaller tactical aviation force to  meet the mission needs of both the Navy and the Marine Corps.
Delays in fielding the Joint Strike Fighter aircraft, both known and  potential, could also affect the successful implementation of the Plan. As a  result of engineering and weight problems in the development of the Joint  Strike Fighter, there will be at least a 1-year delay in when the Navy and  Marine Corps had expected to begin receiving the Joint Strike Fighter  aircraft. As noted in the Department of the Navy’s most recent acquisition  reports to Congress, the Navy has delayed the Short Takeoff and Vertical  Landing version from 2010 to 2012 and the Navy’s carrier version from  2012 to 2013. Furthermore, in March 2004 we reported that numerous  program risks and possible schedule variances could cause additional  delays.
Recent Joint Strike Fighter program cost increases could also delay the  fielding of the aircraft. In DOD’s December 31, 2003, procurement plan, the  average unit cost of the aircraft increased from $69 million to $82 million.  Assuming that the Department of the Navy procures the 680 Joint Strike  Fighter aircraft as proposed under the Plan, the total procurement cost  will be approximately $9 billion higher. This increase in cost, when  considered within the limits of the expected $3.2 billion annual  procurement budget, will likely prevent the Department of the Navy from  fielding the smaller but more effective tactical aviation force as early as  expected. Additionally, these delays will oblige the Department of the  Navy to operate legacy aircraft longer than expected, which could result in  increased operations and maintenance costs. A potential increase in  operations and maintenance costs makes it even more important for the  Department of the Navy to conduct an analysis to determine its future  readiness funding requirements.
section_title: Conclusions
paragraphs: The contractor’s study results provided the Department of the Navy with a  reasonable basis for concluding that it could afford to buy a smaller but  more capable force that would meet its future operating requirements by  using fewer Navy and Marine Corps tactical aviation squadrons of more  capable aircraft as a combined force and achieving efficiencies that allow  it to reduce the number of backup aircraft needed. However, there are  known management and funding risks to realizing the new smaller forces’  affordability and effectiveness. Until Navy management assesses the  likelihood of future lower attrition rates and aircraft maintenance, test and  evaluation, and training requirements, the Navy runs the risk that the  number of backup aircraft it plans to procure will not be adequate to  support the smaller tactical aviation force and add concern to the Plan’s  affordability. Furthermore, in the absence of clear DOD guidance citing  consistent criteria and documentation requirements for supporting  decisions that affect units, such as which Navy and Marine Corps Reserve  squadrons to decommission, we remain concerned about the transparency  of the process for reducing the force to those with oversight responsibility.  The inconsistency in the Marine Corps’ and Navy’s approaches and  supporting documentation confirms the value of such guidance to ensure  clear consideration of the best alternative. Finally, until the Department of  the Navy knows the readiness funding requirements for operating the new  smaller force, it cannot be certain that it can maintain the readiness levels  required to meet operational demands. Such an assessment of these  requirements would provide a sound basis for seeking proper funding.
section_title: Recommendations for Executive Action
paragraphs: To enhance the potential that the future Navy and Marine Corps integrated  tactical aviation force will meet the mission needs of both services and  ensure more transparency when making future decommissioning  decisions, we recommend that the Secretary of Defense take the following  three actions:    direct the Secretary of the Navy to thoroughly assess all of the factors  that provide the basis for the number of backup aircraft needed to  support a smaller tactical aviation force under the plan to integrate  Navy and Marine Corps tactical aviation forces,    develop guidance that (1) identifies the criteria and methodology for  analyzing future decisions about which units to decommission and  (2) establishes requirements for documenting the process used and  analysis conducted, and    direct the Secretary of the Navy to analyze future readiness funding  requirements to support the tactical aviation integration plan and  include required funding in future budget requests.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, the Director, Defense  Systems, Office of the Under Secretary of Defense, stated that the  department generally agreed with our recommendations and cited actions  that it is taking. The department’s comments are reprinted in their entirety  in appendix I.
In partially concurring with our first recommendation to thoroughly assess  all of the factors that provide the basis for the number of backup aircraft,  DOD stated that the Department of the Navy’s Naval Air Systems  Command would complete an effort to review all aircraft inventories to  determine the optimum quantity required by July 2004. However, we were  not able to evaluate the Navy’s study because Navy officials have since  told us that it will not be completed until late September or early October  2004.
With regard to our second recommendation to develop guidance that  would identify criteria and a methodology for analyzing future  decommissioning decisions and require documenting the process, DOD  stated that it would change Directive 5410.10, which covers the  notification of inactivation or decommission of forces, and require it to  contain the criteria and methodology used to make the force structure  decision. While we agree that the new guidance, if followed, would  disclose these aspects of the decision-making process, it does not appear  sufficient to meet the need we identified for consistency and  documentation to support force structure decisions. Therefore, we believe  that DOD should take additional steps to meet the intent of our  recommendation by developing consistent criteria and requiring  documentation to ensure transparency for those providing oversight of  such decisions in the future.
In partially concurring with our third recommendation related to future  readiness funding requirements, the Department of Defense stated that the  Department of the Navy is currently developing analytical metrics that  would provide a better understanding of how to fund readiness accounts  to achieve a target readiness level. We support the development of  validated metrics that would link the amount of funding to readiness levels  because they would provide decision makers with assurance that  sufficient funding would be provided.
section_title: Scope and Methodology
paragraphs: To determine how Navy and Marine Corps operational concepts, force  structure, and procurement costs would change under the Plan, we  obtained information about the Navy and Marine Corps’ current roles and  mission, force structure, and projected tactical aviation procurement  programs and conducted a comparative analysis. We also met with Navy  and Marine Corps officials at the headquarters and major command levels  as well as Congressional Research Service officials to further understand  and document the operational, force structure, and procurement cost  changes expected if the Plan is implemented.
To determine what methodology and assumptions the Navy and Marine  Corps used to analyze the potential for integrating tactical aviation assets  and any limitations that could affect the services’ analysis, we analyzed  numerous aspects of the contractor’s study that provided the impetus for  the Plan. Specifically, we met with the contractor officials of Whitney,  Bradley & Brown, Inc., to gain first-hand knowledge of the model used to  assess aircraft performance capability and the overall reasonableness of  the study’s methodology. We also reviewed the scenario and assessed the  key analytical assumptions used in order to evaluate their possible impact  on the implementation of the Plan. We examined operational and aircraft  performance factors to determine the potential limitations that could  affect the services’ analysis. Additionally, we held discussions with  officials at Navy and Marine Corps headquarters, Joint Forces Command,  Naval Air Forces Pacific and Atlantic Commands, Marine Forces Atlantic  Command, and the Air Combat Command to validate and clarify how the  Plan would or would not affect the ability of tactical aviation forces to  meet mission needs.
To determine the process the Navy and Marine Corps used to assess which  reserve squadrons should be decommissioned in fiscal year 2004, we  obtained information from the Marine Corps Reserve Headquarters and  the 4th Marine Air Wing showing a comparative analysis of Marine Corps  Reserve squadrons. In the absence of comparable information from the  Navy, we held discussions with the Chief of Naval Reserve and the  Director, Navy Air Warfare, and visited the Naval Air Force Reserve  Command to obtain information about the decision-making process for  selecting the Navy reserve unit to be decommissioned. We also visited the  Commander of the Navy Reserve Carrier Air Wing-20, along with four  reserve squadrons, two each from the Navy and Marine Corps Reserves, to  clarify and better understand their roles, missions, and overall value to the  total force concept.
To determine what other factors might affect the implementation of the  Plan, we analyzed the contractor’s study, Congressional Research Service  reports, and prior GAO reports for potential effects that were not  considered in the final results of the analysis. We discussed these factors  with officials from Navy and Marine Corps headquarters as well as Naval  Air Forces Pacific and Atlantic Commands and Marine Forces Atlantic  Command to assess the impact of the Plan on day-to-day operations.
We assessed the reliability of pertinent data about aircraft capability, force  structure, and military operations contained in the contractor’s study that  supports the Plan by (1) reviewing with contractor officials the  methodology used for the analysis; (2) reviewing the 2001 Quadrennial  Defense Review, prior GAO reports, and service procurement and aircraft  performance documents; and (3) conducting discussions with Navy and  Marine Corps officials. We concluded that the data were sufficiently  reliable for the purpose of this report.
We performed our review from July 2003 through May 2004 in accordance  with generally accepted government auditing standards.
We are sending copies of this report to the Secretary of Defense; the  Secretary of the Navy; the Commandant of the Marine Corps; the Director,  Office of Management and Budget; and other interested congressional  committees and parties. We will also make copies available to others upon  request. In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.
Please contact me on (202) 512-4402 if you or your staff have any  questions concerning this report. Major contributors to this report are  included in appendix I.
section_title: Appendix I: Comments from the Department of Defense
section_title: Appendix II: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, Willie J. Cheely, Jr.; Kelly Baumgartner;  W. William Russell, IV; Michael T. Dice; Cheryl A. Weissman; Katherine S.  Lenane; and Monica L. Wolford also made significant contributions to this  report.
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