Force Structure: Capabilities and Cost of Army Modular Force Remain Uncertain
Published: 2006-04-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Army considers its modular force transformation the most extensive restructuring it has undertaken since World War II. Restructuring the Army from a division-based force to a modular brigade-based force will require extensive investments in equipment and retraining of personnel. The foundation of the modular force is the creation of standardized modular combat brigades designed to be stand-alone, self-sufficient units that are more rapidly deployable and better able to conduct joint operations than their larger division-based predecessors. GAO was asked to testify on the status of the Army's modularity effort. This testimony addresses (1) the Army's cost estimate for restructuring to a modular force, (2) progress and plans for equipping modular brigade combat teams, (3) progress made and challenges to meeting personnel requirements, and (4) the extent to which the Army has developed an approach for assessing modularity results and the need for further adjusting designs or implementation plans. This testimony is based on previous and ongoing GAO work examining Army modularity plans and cost. GAO's work has been primarily focused on the Army's active forces. GAO has suggested that Congress consider requiring the Secretary of Defense to provide a plan for overseeing spending of funds for modularity.
section_title: What GAO Found
paragraphs: Although the Army is making progress creating modular units, it faces significant challenges in managing costs and meeting equipment and personnel requirements associated with modular restructuring in the active component and National Guard. Moreover, the Army has not provided sufficient information for the Department of Defense and congressional decision makers to assess the capabilities, costs, affordability, and risks of the Army's modular force implementation plans. The Army's cost estimate for completing modular force restructuring by 2011 has grown from an initial rough order of magnitude of $28 billion in 2004 to $52.5 billion currently. Although the Army's most recent estimate addresses some shortcomings of its earlier estimate, it is not clear to what extent the Army can achieve expected capabilities within its cost estimate and planned time frames for completing unit conversions. Moreover, according to senior Army officials, the Army may request additional funds for modularity beyond 2011. Although modular conversions are under way, the Army is not meeting its near-term equipping goals for its active modular combat brigades, and units are likely to have shortfalls of some key equipment until at least 2012. The Army plans to mitigate risk in the near term by providing priority for equipping deployed units and maintaining other units at lower readiness levels. However, it has not yet defined specific equipping plans for units in various phases of its force rotation model. As a result, it is unclear what level of equipment units will have and how well units with low priority for equipment will be able to respond to unforeseen crises. In addition, the Army faces significant challenges in implementing its plan to reduce overall active component end strength from 512,400 to 482,400 soldiers by fiscal year 2011 while increasing the size of its modular combat force from 315,000 to 355,000. This will require the Army to eliminate or realign many positions in its noncombat force. The Army has made some progress in reducing military personnel in noncombat positions through military civilian conversions and other initiatives, but some of its goals for these initiatives may be difficult to meet and could lead to difficult trade-offs. Already the Army does not fully plan to fill some key intelligence positions required by its new modular force structure. Finally, the Army does not have a comprehensive and transparent approach to measure progress against stated modularity objectives and assess the need for further changes to modular designs. The Army has not established outcome-related metrics linked to many of its modularity objectives. Further, although the Army is analyzing lessons learned from Iraq and training events, the Army does not have a long-term, comprehensive plan for further analysis and testing of the designs and fielded capabilities. Without performance metrics and a comprehensive testing plan, neither the Secretary of Defense nor congressional leaders will have full visibility into the capabilities of the modular force as it is currently organized, staffed, and equipped.

section_title: Letter
paragraphs: I am pleased to be here to discuss our ongoing work on the Army’s plans  for restructuring into a modular brigade-based force. In 2004, the Army  began its modular force transformation to restructure itself from a  division-based force to a modular brigade-based force—an undertaking it  considers the most extensive reorganization of its force since World War  II. This restructuring will require a significant investment of billions of  dollars at a time when the Army is developing other high-cost capabilities,  such as the Future Combat Systems. For example, the administration  requested $6.6 billion for modularity as part of its fiscal year 2007 budget  request. The foundation of the modular force is the creation of  standardized modular brigade combat teams designed to be stand-alone,  self-sufficient units that are more rapidly deployable and better able to  conduct joint and expeditionary operations than their larger division- based predecessors. The Army plans to achieve its modular restructuring  without permanently increasing its active component end strength above  482,400 soldiers, primarily by eliminating some noncombat positions in  which military personnel currently serve, and transferring these positions  to its operational combat forces. The February 2006 Quadrennial Defense  Review (QDR) specified that the Army would create 70 modular combat  brigades in its active component and National Guard. This represents a 7- brigade reduction from the Army’s original plan of having 77 modular  combat brigades. However, according to Army officials, resources from  the 7 brigades subtracted from the original plan will be used to increase  support units in the reserve component, and Department of Defense  (DOD) officials believe that 70 brigades will be sufficient to execute the  defense strategy.
For this hearing, you asked us to update our March 2005 testimony before  this committee, in which we provided preliminary observations on the  Army’s plan to implement and fund modular forces. At that time we  observed that because the Army is undertaking this effort while executing  operations in Iraq, Afghanistan, and elsewhere and developing other new  capabilities, such as the Future Combat Systems, DOD may face some  long-term affordability challenges as it moves forward with these and  other initiatives. Since that hearing, in September 2005 we issued a report  on the costs of modularity, and we are drafting a report on the Army’s  plans for modularity, which we expect to issue this spring. Specifically,  my testimony today will address (1) the Army’s cost estimates for  restructuring to a modular force, (2) the Army’s progress and plans for  equipping modular combat brigades, (3) progress made and challenges to  managing personnel requirements of the modular force, and (4) the extent  to which the Army has developed an approach for assessing  implementation of modularity and for further adjusting designs or  implementation plans.
My testimony is based on both our September 2005 report on cost issues  and on our past and ongoing work examining the Army’s plans for  implementing modularity. For our ongoing work, we interviewed officials  and obtained documents from Headquarters, Department of the Army; U.S.  Army Training and Doctrine Command; and U.S. Army Forces Command  to determine the Army’s modular force implementation plans,  organizational design requirements and supporting analysis, equipment  and personnel requirements for the brigade combat teams, and plans for  equipping and staffing modular brigade combat teams to the required  levels. We visited the first three Army divisions undergoing modular  conversions to obtain information on the plans for organizing, staffing, and  equipping the modular brigades and discussed modular force support  requirements with officials from the U.S. Army Center for Army Analysis.  To assess the Army’s cost estimates, we updated our September 2005  report with information from the fiscal year 2007 President’s Budget  request and discussions with Army officials about implications of the QDR  on the cost of modular restructuring. To address equipment plans and  status, we analyzed Department of the Army data on selected equipment  the Army identified as essential for achieving the modular combat  brigades, required operational capabilities and reviewed unit readiness  reports from those brigades that had completed or were in the process of  completing their modular conversion as of February 2006. To assess  personnel plans, we discussed the implications of force structure changes  and plans for eliminating noncombat positions with officials from the  Department of the Army Deputy Chiefs of Staff for Personnel (G1) and  Intelligence (G2). Finally, to assess the framework for assessing  modularity implementation, we examined key Army planning documents  and discussed objectives, performance metrics, and testing plans with  appropriate officials in the Department of the Army Headquarters,  especially officials from the Deputy Chief of Staff for Operations and  Training (G3) and the Training and Doctrine Command. In addition, we  relied on our past reports assessing organizations undertaking significant  reorganizations. We conducted our work from May 2005 through March  2006 in accordance with generally accepted government auditing  standards and determined that the data used were sufficiently reliable for  our objectives.
subsections: section_title: Background
paragraphs: The Army’s conversion to a modular force encompasses the Army’s total  force—active Army, Army National Guard, and Army Reserve—and  directly affects not only the Army’s combat units, but related command  and support organizations. A key to the Army’s new modular force design  is embedding within combat brigades battalion-sized, reconnaissance,  logistics, and other support units that previously made up parts of  division-level and higher-level command and support organizations,  allowing the brigades to operate independently. Restructuring these units  is a major undertaking because it requires more than just the movement of  personnel or equipment from one unit to another. The Army’s new  modular units are designed, equipped, and staffed differently than the  units they replace; therefore successful implementation of this initiative  will require changes such as new equipment and a different mix of skills  and occupational specialties among Army personnel. By 2011, the Army  plans to have reconfigured its total force—to include active and reserve  components and headquarters, combat, and support units—into the  modular design. The foundation of the modular force is the creation of  modular brigade combat teams—combat maneuver brigades that will have  a common organizational design and will increase the rotational pool of  ready units. Modular combat brigades will have one of three standard  designs—heavy brigade combat team, infantry brigade combat team, and  Stryker brigade combat team.
Until it revised its plans in March 2006, the Army had planned to have a  total of 77 active component and National Guard modular combat brigades  by expanding the existing 33 combat brigades in the active component into  43 modular combat brigades by 2007, and by creating 34 modular combat  brigades in the National Guard by 2010 from existing brigades and  divisions that have historically been equipped well below requirements. To  rebalance joint ground force capabilities the 2006 QDR determined the  Army should have a total of 70 modular combat brigades—42 active  brigades and 28 National Guard brigades. Also in March 2006, the Army  was in the process of revising its modular combat brigade conversion  schedule; it now plans to convert its active component brigades by fiscal  year 2010 instead of 2007 as previously planned, and convert National  Guard brigades by fiscal year 2008 instead of 2010. As of March 2006 the  Army had completed the conversion of 19 active component brigades to  the modular design and was in the process of converting 2 active and 7  National Guard brigades. Table 1 shows the Army’s schedule as of March  2006 for creating active component and National Guard modular combat  brigades.
According to the Army, this larger pool of available combat units will  enable it to generate both active and reserve component forces in a  rotational manner that will support 2 years at home following each  deployed year for active forces. To do this, the Army has created a  rotational force generation model in which units rotate through a  structured progression of increased unit readiness over time. Units will  progress through three phases of operational readiness cycles, culminating  in full mission readiness and availability to deploy.
The Army’s objective is for the new modular combat brigades, which will  include about 3,000 to 4,000 personnel, to have at least the same combat  capability as a brigade under the current division-based force, which range  from 3,000 to 5,000 personnel. Since there will be more combat brigades in  the force, the Army believes its overall combat capability will be increased  as a result of the restructuring, providing added value to combatant  commanders. Although somewhat smaller in size, the new modular  combat brigades are expected to be as capable as the Army’s existing  brigades because they will have different equipment, such as advanced  communications and surveillance equipment, and a different mix of  personnel and support assets. The Army’s organizational designs for the  modular brigades have been tested by its Training and Doctrine  Command’s Analysis Center against a variety of scenarios, and the Army  has found the new designs to be as capable as the existing division-based  brigades in modeling and simulations.
section_title: Lack of Clarity in Army’s Cost Estimate for Modularity Limits Decision Makers’ Ability to Weigh Funding Priorities
paragraphs: The Army’s cost estimate for modularity has continued to evolve since our  September 2005 report. As we reported, the Army’s cost estimate for  transforming its force through fiscal year 2011 increased from $28 billion  in the summer of 2004 to $48 billion in the spring of 2005. The latter  estimate addressed some of the shortcomings of the initial rough order of  magnitude estimate and included lessons learned from operations in Iraq.  For example, it included costs of restructuring the entire force, to include  77 brigade combat teams, as well as the creation of support and command  units. However, it excluded some known costs. For example, the   $48 billion estimate did not include $4.5 billion in construction costs the  Army plans to fund through business process engineering efficiencies,  which historically have been difficult to achieve. The Army added these  costs when it revised its cost estimate in March 2006, bringing the most  recent total to $52.5 billion. As shown in table 2, most of the planned  funding for modularity—$41 billion, or about 78 percent—will be used to  procure equipment, with the remaining funds divided between military  construction and facilities and sustainment and training. In addition, Army  leaders have recently stated they may seek additional funds after 2011 to  procure additional equipment for modular restructuring.
In our September report, we highlighted uncertainties related to force  design, equipment, facilities, and personnel that could drive costs higher.  Some of these uncertainties have been clarified. For example, we noted  that costs in equipment and facilities would increase significantly if the  Secretary of Defense decided to add 5 brigades to the Army’s active  component to create a total of 48 brigade combat teams—a decision that  was scheduled to be made in fiscal year 2006. The decision about the  number of brigades was made based on the QDR. Instead of a 5 brigade  combat team increase, the report stated that the Army would create a total  of 42 such brigades in the active component, a 1 brigade combat team  reduction from the Army’s plan. In addition, the number of National Guard  brigade combat teams was reduced from 34 to 28. In sum, the QDR  decisions reduced the number of planned brigade combat teams from 77  to 70. However, Army officials stated that the Army plans to fully staff and  equip these units. Moreover, Army officials told us that the Army plans to  use resources freed up by this decision to increase support units in the  reserve component and to fund additional special operations capability in  the active component. We also noted in our September 2005 report that  the Army had not completed designs for all the support units at the time  the estimate was set. According to Army officials, these designs have been  finalized. Despite these refinements to the design and changes to the  planned number of combat and support brigades, the Army has not made  revisions to its $52.5 billion cost estimate or funding plan based on these  changes.
Moreover, as I will discuss shortly, uncertainty remains in the Army’s  evolving strategy for equipping its modular combat brigades. As a result,  based on discussions with Army officials, it remains unclear to what  extent the $41 billion will enable the Army to equip units to levels in the  Army’s tested design. In addition, it is not clear how the Army will  distinguish between modularity, costs associated with restoring equipment  used in operations, or modernizing equipment. In estimating its equipment  costs for modularity, the Army assumed that some equipment from  ongoing operations would remain in operational condition for  redistribution to new and restructured modular units. To the extent  equipment is not returned from operations at assumed rates, it is not clear  how this will affect equipping levels of modular units or how the Army  would pay for such equipment. As a result, the Secretary of Defense and  Congress may not be in a sound position to weigh competing demands for  funding and assess whether the Army will be able to fully achieve planned  capabilities for the modular force by 2011 within the planned funding  level.
section_title: Although the Army Is Well Under Way in Its Active Modular Combat Brigade Conversions, Its Ability to Meet Its Equipping Goals by 2011 Is Unclear
paragraphs: The Army has made progress in creating active component modular  combat brigades, but it is not meeting its equipping goals for these  brigades and is still developing its overall equipping strategy, which raises  concerns about the extent to which brigades will be equipped in the near  and longer term. While active brigades are receiving significant amounts of  new equipment, Army officials indicated that they may seek additional  funding for equipment beyond 2011. Moreover, brigades will initially lack  key equipment, including items that provide enhanced intelligence,  situational awareness, and network capabilities needed to help the Army  achieve its planned capabilities of creating a more mobile, rapidly  deployable, joint, expeditionary force. In addition, because of existing  equipment shortages, the Army National Guard will likely face even  greater challenges providing the same types of equipment for its 28  planned modular combat brigades. To mitigate equipment shortages, the  Army plans to provide priority for equipment to deploying active  component and National Guard units but allocate lesser levels of  remaining equipment to other nondeploying units based on their  movement through training and readiness cycles. However, the Army has  not yet determined the levels of equipment it needs to support this  strategy, assessed the operational risk of not fully equipping all units, or  provided to Congress detailed information about these plans so it can  assess the Army’s current and long-term equipment requirements and  funding plans.
subsections: section_title: Army Facing Difficulty Meeting Its Goals for Equipping Active Modular Combat Brigades
paragraphs: The Army faces challenges meeting its equipping goals for its modular  brigades both in the near and longer term. As of February 2006, the Army  had converted 19 modular combat brigades in the active force. According  to the Army Campaign Plan, which established time frames and goals for  the modular force conversions, each of these units individually is expected  to have on hand at least 90 percent of its required major equipment items  within 180 days after its new equipment requirements become effective.  We reviewed data from several brigades that had reached the effective  date for their new equipment requirements by February 2006, and found  that all of these brigades reported significant shortages of equipment 180  days after the effective date of their new equipment requirements, falling  well below the equipment goals the Army established in its Campaign  Plan. Additionally, the Army is having difficulty providing equipment to  units undergoing their modular conversion in time for training prior to  operational deployments, and deploying units often do not receive some of  their equipment until after their arrival in theater. At the time of our visits,  officials from three Army divisions undergoing modular conversion  expressed concern over the lack of key equipment needed for training  prior to deployment.
The Army already faced equipment shortages before it began its modular  force transformation and is wearing out significant quantities in Iraq,  which could complicate plans for fully equipping new modular units. By  creating modular combat brigades with standardized designs and  equipment requirements, the Army believed that it could utilize more of its  total force, thereby increasing the pool of available and ready forces to  meet the demands of sustained rotations and better respond to an  expected state of continuous operations. Also, by comparably equipping  all of these units across the active component and National Guard, the  Army further believes it will be able to discontinue its practice of  allocating limited resources, including equipment, based on a system of  tiered readiness, which resulted in lower-priority units in both active and  reserve components having significantly lower levels of equipment and  readiness than the higher priority units. However, because of the need to  establish a larger pool of available forces to meet the current high pace of  operational commitments, the Army’s modular combat brigade conversion  schedule is outpacing the planned acquisition or funding for some  equipment requirements. The Army has acknowledged that funding does  not match its modular conversion schedule and that some units will face  equipment shortages in the early years of transformation. The Army says it  will manage these shortfalls; however, according to Army officials, the  Army may continue to seek modular force equipment funding beyond 2011  and may exceed its $52.5 billion modularity cost estimate.
section_title: Equipment Shortages Include Key Equipment the Army Identified as Essential for Achieving Modular Force Capabilities
paragraphs: Active modular combat brigades will initially lack required numbers of  some of the key equipment that Army force design analyses determined  essential for achieving their planned capabilities. Army force designers  identified a number of key organizational, personnel, and equipment  enablers they determined must be present for the modular combat  brigades to be as lethal as the division-based brigades they are replacing,  achieve their expected capabilities, and function as designed. Essential  among these is the equipment that will enable the modular combat  brigades to function as stand-alone, self-sufficient tactical forces, capable  of conducting and sustaining operations on their own if required without  also deploying large numbers of support forces. They include battle  command systems to provide modular combat brigades the latest  command and control technology for improved situational awareness;  advanced digital communications systems to provide secure high-speed  communications links; and advanced sensors, providing modular combat  brigades their own intelligence-gathering, reconnaissance, and target  acquisition capabilities.
We reviewed several command and control, communications, and  reconnaissance systems to determine the Army’s plans and timelines for  providing active modular combat brigades some of the key equipment they  need to achieve their planned capabilities and function as designed.  According to Army officials responsible for managing the distribution and  fielding of equipment, in 2007 when 38 of 42 active component modular  combat brigades are to complete their modular conversions, the Army will  not have all of this equipment onhand to meet the new modular force  design requirements. These shortfalls are due to a range of reasons, but  primarily because the modular conversion schedule is outpacing the  planned acquisition or funding. For example, the Army does not expect to  meet until at least 2012 its modular combat brigade requirements for Long- Range Advanced Scout Surveillance Systems, an advanced visual sensor  that provides long-range surveillance capability to detect, recognize, and  identify distant targets. In addition, because of an Army funding decision,  the Army only plans to meet 85 percent of its requirements across the  force for Single Channel Ground and Airborne Radio Systems, a command  and control network radio system that provides voice and data  communications capability in support of command and control operations.  Finally, a recent DOD decision could set back the Army’s schedule for the  acquisition of Joint Network Node, a key communications system that  provides secure high-speed computer network connection for data  transmission down to the battalion level, including voice, video, and e- mail. According to Army officials, DOD recently decided to require the  Army to have Joint Network Node undergo developmental and operational  testing prior to further acquisition, which could delay equipping active and  National Guard modular combat brigades.
section_title: National Guard Faces Significant Equipping Challenges
paragraphs: In addition to the challenges the Army faces in providing active  component modular combat brigades the equipment necessary for meeting  expected capabilities, the Army will face greater challenges meeting its  equipping requirements for its 28 planned National Guard combat  brigades. The Army’s modular force concept is intended to transform the  National Guard from a strategic standby force to a force that is to be  organized, staffed, and equipped comparable to active units for  involvement in the full range of overseas operations. As such, Guard  combat units will enter into the Army’s new force rotational model in  which, according to the Army’s plans, Guard units would be available for  deployment 1 year out of 6 years. However, Guard units have previously  been equipped at less than wartime readiness levels (often at 65 to 75  percent of requirements) under the assumption that there would be  sufficient time for Guard forces to obtain additional equipment prior to  deployment. Moreover, as of July 2005, the Army National Guard had  transferred more than 101,000 pieces of equipment from nondeploying  units to support Guard units’ deployments overseas. As we noted in our  report last year on National Guard equipment readiness, National Guard  Bureau officials estimated that the Guard’s nondeployed units had only  about 34 percent of their essential warfighting equipment as of July 2005  and had exhausted inventories of 220 critical items. Although the Army  says it plans to invest $21 billion into equipping and modernizing the  Guard through 2011, Guard units will start their modular conversions with  less and much older equipment than most active units. This will add to the  challenge the Army faces in achieving its plans and timelines for equipping  Guard units at comparable levels to active units and fully meeting the  equipping needs across both components. Moreover, the Army National  Guard believes that even after the Army’s planned investment, the Army  National Guard will have to accept risk in certain equipment, such as  tactical wheeled vehicles, aircraft, and force protection equipment.
section_title: To Mitigate Equipment Shortages, Army Plans to Rotate Equipment among Units Based on Their Movement through Training, Readiness, and Deployment Cycles
paragraphs: Because the Army realized that it would not have enough equipment in the  near term to simultaneously equip modular combat brigades at 100 percent  of their requirements, the Army is developing a new equipping strategy as  part of its force rotation model; however, it has not yet determined  equipping requirements for this new strategy. Under the force rotation  model, the Army would provide increasing amounts of equipment to units  as they move through training phases and near readiness for potential  deployment so they would be ready to respond quickly if needed with fully  equipped forces. The Army believes that over time, equipping units in a  rotational manner will enable it to better allocate available equipment and  help manage risk associated with specific equipment shortages.
Under this strategy, brigades will have three types of equipment sets—a  baseline set, a training set, and a deployment set. The baseline set would  vary by unit type and assigned mission and the equipment it includes could  be significantly reduced from the amount called for in the modular brigade  design. Training sets would include more of the equipment units will need  to be ready for deployment, but units would share the equipment that  would be located at training sites throughout the country. The deployment  set would include all equipment needed for deployment, including theater- specific equipment, high-priority items provided through operational  needs statements, and equipment from Army prepositioned stock. With  this cyclical equipping approach, the Army believes it can have from 12 to  16 active combat brigades and from 3 to 4 Army National Guard combat  brigades equipped and mission ready at any given time.
However, the Army has not yet determined equipping requirements for  units as they progress through the rotational cycles. While the Army has  developed a general proposal to equip both active and Army National  Guard units according to the readiness requirements of each phase of the  rotational force model, it has not yet detailed the types and quantities of  items required in each phase. We noted in our October 2005 report on  Army National Guard equipment readiness that at the time of the report,  the Army was still developing the proposals for what would be included in  the three equipment sets and planned to publish the final requirements in  December 2005. However, as of March 2006 the Army had not decided on  specific equipping plans for units in the various phases of its force rotation  model.
Because the Army is early in the development of its rotational equipping  strategy and has not yet defined specific equipping plans for units as they  progress through rotational cycles, the levels of equipment the deploying  and nondeploying units would receive are currently not clear. Therefore, it  is difficult to assess the risk associated with decreasing nondeploying  units’ readiness to perform other missions or the ability of units in the  earlier stages of the rotational cycle to respond to an unforeseen crisis if  required.
section_title: The Army Faces Challenges in Managing Personnel Requirements for Its New Modular Force Structure
paragraphs: The Army has made some progress meeting modular personnel  requirements in the active component by shifting positions from its  noncombat force to its operational combat force but faces significant  challenges reducing its overall end strength while increasing the size of its  modular combat force. The Army plans to reduce its current end strength  of 512,400, based upon a temporary authorized increase, to 482,400  soldiers by 2011 in order to help fund the Army’s priority acquisition  programs. Simultaneously, the Army plans to increase the number of  soldiers in its combat force from approximately 315,000 to 355,000 in order  to meet the increased personnel requirements of its new larger modular  force structure. The Army plans to utilize several initiatives to reduce and  realign the Army with the aim of meeting these planned manpower levels.
For example, the Army has experienced some success in converting  nonoperational military positions into civilian positions, thereby freeing up  soldiers to fill modular combat brigades’ requirements. During fiscal year  2005, the Army converted approximately 8,000 military positions to  civilian-staffed positions within the Army’s institutional force. However,  officials believe additional conversions will be more challenging to  achieve. In addition to its success with the military-to-civilian conversions,  the Army has been given statutory authority to reduce active personnel  support to the National Guard and Reserves by 1,500. However, the Army  must still eliminate additional positions, utilizing these and other  initiatives, so it can reduce its overall end strength while filling  requirements for modular units.
While the Army is attempting to reduce end strength and realign positions  to the combat force via several initiatives, it may have difficulty meeting  its expectations for some initiatives. For example, the Army expected that  the Base Realignment and Closure (BRAC) decisions of 2005 could free up  approximately 2,000 to 3,000 positions in the institutional Army, but the  Army is revisiting this assumption based upon updated manpower levels at  the commands and installations approved for closure and consolidation.  Army officials believe they will be able to realign some positions from  BRAC, but it is not clear whether the reductions will free up 2,000 to 3,000  military personnel. In the same vein, Army officials expected to see  reductions of several hundred base support staff resulting from  restationing forces currently overseas back to garrisons within the United  States. However, Army officials are still attempting to determine if the  actual savings will meet the original assumptions.
In addition, the Army’s new modular force structure increases  requirements for military intelligence specialists, but according to Army  officials the Army will not be able to fully meet these requirements. The  modular force requires the Army to adjust the skill mix of its operational  force by adding 8,400 active component intelligence specialist positions to  support its information superiority capability—considered a key enabler  of modular force capabilities. However, the Army plans to fill only about  57 percent of these positions by 2013 in part because of efforts to reduce  overall end strength. According to Army officials, despite these shortfalls,  intelligence capability has improved over that of the previous force;  however, shortfalls in filling intelligence requirements have stressed  intelligence specialists with a high tempo of deployments. However, since  intelligence was considered a key enabler of the modular design—a  component of the new design’s improved situational awareness—it is  unclear how this shortage in planned intelligence capacity will affect the  overall capability of modular combat brigades.
If the Army is unable to transfer enough active personnel to its combat  forces while simultaneously reducing its overall end strength, it will be  faced with a difficult choice. The Army could accept increased risk to its  operational units or nonoperational units that provide critical support,  such as training. Alternatively, the Army could ask DOD to seek an end  strength increase and identify funds to pay for additional personnel.  However, DOD is seeking to reduce end strength in all the services to limit  its personnel costs and provide funds for other priorities.
section_title: The Army Has Objectives and Time Frames for Modularity but Lacks Performance Metrics to Measure Progress
paragraphs: The Army lacks a comprehensive and transparent approach to effectively  measure its progress against stated modularity objectives, assess the need  for further changes to its modular unit designs, and monitor  implementation plans.
subsections: section_title: Army Lacks Performance Metrics to Measure the Results of Modularity
paragraphs: GAO and DOD, among others, have identified the importance of  establishing objectives that can be translated into measurable, results- oriented metrics, which in turn provide accountability for results. In a 2003  report we found that the adoption of a results-oriented framework that  clearly establishes performance goals and measures progress toward those  goals was a key practice for implementing a successful transformation.  DOD has also recognized the need to develop or refine metrics so it can  measure efforts to implement the defense strategy and provide useful  information to senior leadership.
The Army considers the Army Campaign Plan to be a key document  guiding the modular restructuring. The plan provides broad guidelines for  modularity and other program tasks across the entire Army. However,  modularity-related metrics within the plan are limited to a schedule for  creating modular units and an associated metric of achieving unit  readiness goals for equipment training and personnel by certain dates after  unit creation. Moreover, a 2005 assessment by the Office of Management  and Budget identified the total number of brigades created as the only  metric the Army has developed for measuring the success of its modularity  initiative. Another key planning document, the 2005 Army Strategic  Planning Guidance, identified several major expected advantages of  modularity, including an increase in the combat power of the active  component force by at least 30 percent, an increase in the rotational pool  of ready units by at least 50 percent, the creation of a deployable joint- capable headquarters, a force design upon which the future network- centric developments can be readily applied, and reduced stress on the  force through a more predictable deployment cycle. However, these goals  have not translated into outcome-related metrics that are reported to  provide decision makers a clear status of the modular restructuring as a  whole. Army officials stated that unit creation schedules and readiness  levels are the best available metrics for assessing modularity progress  because modularity is a reorganization encompassing hundreds of  individual procurement programs that would be difficult to collectively  assess in a modularity context.
While we recognize the complexity of the modular restructuring, we also  note that without clear definitions of metrics, and periodic communication  of performance against these metrics, the Secretary of Defense and  Congress will have difficulty assessing the impact of refinements and  enhancements to the modular design, such as changes in the number of  modular combat and support brigades reported in the QDR and any  changes in resource requirements that may occur as a result of these  changes.
section_title: Army Lacks a Long-term Plan for Comprehensively Evaluating Modular Designs
paragraphs: In fiscal year 2004, TRADOC’s Analysis Center concluded that the modular  brigade combat team designs would be more capable than division-based  units based on an integrated and iterative analysis employing computer- assisted exercises, subject matter experts, and senior observers. This  analysis culminated in the approval of modular brigade-based designs for  the Army. The assessment employed performance metrics such as mission  accomplishment, units’ organic lethality, and survivability, and compared  the performance of variations on modular unit designs against the existing  division-based designs. The report emphasized that the Chief of Staff of  the Army had asked for “good enough” prototype designs that could be  quickly implemented, and the modular organizations assessed were not  the end of the development effort.
Since these initial design assessments, the Army has been assessing  implementation and making further adjustments in designs and  implementation plans through a number of venues, to include    unit readiness reporting on personnel, equipment, and training;    modular force coordination cells to assist units in the conversion process;    modular force observation teams to collect lessons during training; and    collection and analysis teams to assess units’ effectiveness during  deployment.
TRADOC has approved some design change recommendations and has not  approved others. For example, TRADOC analyzed a Department of the  Army proposal to reduce the number of Long-Range Advanced Scout  Surveillance Systems, but recommended retaining the higher number in  the existing design in part because of decreases in units’ assessed lethality  and survivability with the reduced number of surveillance systems.
Army officials maintain that ongoing assessments provide sufficient  validation that the modularity concept works in practice. However, these  assessments do not provide a comprehensive evaluation of the modular  design as a whole. Further, the Army does not plan to conduct a similar  overarching analysis to assess the modular force capabilities to perform  operations across the full spectrum of potential conflict. In November  2005, we reported that methodically testing, exercising, and evaluating  new doctrines and concepts is an important and established practice  throughout the military, and that particularly large and complex issues  may require long-term testing and evaluation that is guided by study  plans. We believe the evolving nature of the design highlights the  importance of planning for broad-based evaluations of the modular force  to ensure the Army is achieving the capabilities it intended, and to provide  an opportunity to make course corrections if needed. For example, one  controversial element of the design was the decision to include two  maneuver battalions instead of three in the brigade combat teams.
TRADOC’s 2004 analysis noted that the brigade designs with the two  maneuver battalion organization had reduced versatility compared to the  three maneuver battalion design, and cited this as one of the most  significant areas of risk in the modular combat brigade design. Some  defense experts, to include a current division commander and several  retired Army generals, have expressed concerns about this aspect of the  modular design. In addition, some of these experts have expressed  concerns about whether the current designs have been sufficiently tested  and whether they provide the best mix of capabilities to conduct full- spectrum operations. In addition, the Army has recently completed  designs for support units and headquarters units. Once the Army gets more  operational experience with the new modular units, it may find it needs to  make further adjustments to its designs. Without another broad-based  evaluation, the Secretary of Defense and congressional leadership will  lack visibility into the capabilities of the brigade combat teams as they are  being organized, staffed, and equipped.
section_title: Concluding Remarks
paragraphs: The fast pace, broad scope, and cost of the Army’s restructuring to a  modular force present considerable challenges for the Army, particularly  as it continues to be heavily involved in fighting the Global War on  Terrorism. These factors pose challenges to Congress as well to provide  adequate oversight of the progress being made on achieving modularity  goals and of funds being appropriated for this purpose. In this challenging  environment, it is important for the Army to clearly establish and  communicate its funding priorities and equipment and personnel  requirements and assess the risks associated with its plans. Moreover, it is  important for the Army to clearly establish a comprehensive long-term  approach for its modular restructuring that reports not only a schedule of  creating modular units, but measures of its progress toward meeting its  goal of creating a more rapidly deployable, joint, expeditionary force.  Without such an approach, the Secretary of Defense and Congress will not  have the information needed to weigh competing funding priorities and  monitor the Army’s progress in its over $52 billion effort to transform its  force.
Mr. Chairman and members of the subcommittee, this concludes my  prepared remarks. I would be happy to answer any questions you may  have.
section_title: Contacts and Acknowledgments
paragraphs: For future questions about this statement, please contact Janet St. Laurent  at (202) 512-4402. Other individuals making key contributions to this  statement include Gwendolyn Jaffe, Assistant Director; Margaret Best;  Alissa Czyz; Christopher Forys; Kevin Handley; Joah Iannotta; Harry Jobes;  David Mayfield; Sharon Pickup; Jason Venner; and J. Andrew Walker.
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