Defense Logistics: Actions Needed to Improve the Availability of Critical Items during Current and Future Operations
Published: 2005-04-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO has identified spare parts supply as a long-standing Department of Defense (DOD) management problem. In December 2003, GAO reported on problems with Operation Iraqi Freedom (OIF) logistics support including shortages of spare parts and supplies in Iraq. This report expands on that effort by assessing (1) what supply shortages were experienced by U.S. forces in Iraq between October 2002 and September 2004 and what impact the shortages had on their operations, (2) what primary deficiencies in the supply system contributed to any identified supply shortages, and (3) what actions DOD has taken to improve the timely availability of supplies for current and future operations. To address these objectives, GAO judgmentally selected nine items based on lessons learned and after-action reports that represented possible shortages with operational impacts.
section_title: What GAO Found
paragraphs: U.S. troops experienced shortages of seven of the nine items GAO reviewed. According to the 2004 National Military Strategy, U.S. forces expect to have sufficient quantities of the right items at the right time. However, demand for the seven items exceeded availability sometime between October 2002 and September 2004. The documented impact of these shortages varied between combat units. For example, while units in the 3rd Infantry Division reported that tire shortages reduced their operational capability, forcing them to abandon equipment, the 4th Infantry Division reported no similar effect. GAO identified five systemic deficiencies that contributed to shortages of the reviewed items, including inaccurate Army war reserve spare parts requirements and ineffective distribution. Annual updates of Army war reserve parts requirements have not been conducted since 1999. As a result, the war reserves did not contain enough track shoes, batteries, and tires to support U.S. forces during initial operations. Effective distribution relies on a seamless process to promptly move supplies from the United States to a customer. GAO found that conflicting doctrinal responsibilities for distribution management, improperly packed shipments, insufficient transportation personnel and equipment, and inadequate information systems prevented the timely availability of four of the items. While U.S. troops developed short-term solutions to manage item shortages during OIF, DOD and the services have begun to undertake systemic, long-term changes to fix some supply problems identified. While GAO did not evaluate their potential for success, the majority of the changes are focused on distribution, and not on the full gamut of systemic deficiencies GAO identified.

section_title: Letter
paragraphs: To support Operation Iraqi Freedom (OIF), the largest deployment of U.S.  troops since Operation Desert Shield/Desert Storm in 1990, the Department  of Defense (DOD) has undertaken a massive logistics effort, moving more  than 2 million short tons of cargo including equipment, spare parts,  supplies, and other items several thousand miles to the Persian Gulf. This  effort started in late 2001 as U.S. Central Command (CENTCOM) began  planning for OIF, accelerated as troops deployed in the fall of 2002 and  major combat operations were launched on March 19, 2003, and continues  today while U.S. and coalition forces undertake stabilization efforts in Iraq.  From October 2002 through September 2004, DOD reported spending  $51.7 billion for operating support, including fuel, spare parts, and facilities  management, and $10.7 billion for transportation of personnel and supplies  to sustain U.S. forces before, during, and after major combat operations in  Iraq. Despite these expenditures, there have been widespread reports of  serious shortages of some critical items needed by U.S. troops.
DOD relies on a number of individual processes and activities, known  collectively as supply chain management, to purchase, produce, and deliver  products and services to the warfighter during contingency operations  consistent with the National Military Strategy. The goal of supply chain  management is to deliver the “right items to the right place at the right  time” for the warfighter. To meet the initial increase in demand during a  contingency, DOD depends on its war reserves—stocks of specifically  designated weapon systems, equipment, spare parts, and other items that  are amassed during peacetime. The war reserves are intended to fill the gap  until the national supply system can increase production. DOD relies on  defense working capital funds to finance the flow of supplies to the  services. These revolving funds are financed by sales revenue rather than  direct appropriations. Working capital funds allow the Defense Logistics  Agency (DLA) and the services’ logistics agencies to purchase needed  items from suppliers. Military units then order items from the logistics  agencies and pay for them with appropriated funds when the requested  items—either from inventory or manufacturers—are delivered to the units.  Supplies are shipped from the United States by air and sea through DOD’s  joint distribution system and delivered to deployed units.
Since the 1990s, we have identified DOD’s supply chain management as a  high-risk area because of high inventory levels and a supply system that  was not responsive to the needs of the warfighter. In a substantial body of  work, we have examined a range of problems, including inventory  management and shortages of critical spare parts. DOD also recognizes supply chain management as a serious issue. In the Quadrennial Defense  Review for 2001, DOD stated its intention to transform its logistics  capabilities to improve the deployment process and implement new  logistics support tools that accelerate logistics integration between the  services and reduce logistics demand and cost. OIF is one of the first major  tests of these new capabilities, and we have reported on the supply chain  issues that have impeded support to the warfighter. For example, after  visiting the theater in 2003, we provided our preliminary observations on  the effectiveness of logistics support during OIF. Among the problems we  observed were the unavailability of spare parts, hundreds of backlogged  shipments, and an inability to track shipments at the distribution centers.
Supplying spare parts has been a long-standing DOD management problem.  Under the Comptroller General’s authority, we evaluated the effectiveness  of spare parts and related logistics support being provided to deployed  forces for OIF. Our objectives were to assess (1) what supply shortages  were experienced by U.S. forces in Iraq and what impact the shortages had  on operations, (2) what primary deficiencies in the supply system  contributed to any identified supply shortages, and (3) what actions DOD  has taken to improve the timely availability of supplies for current and  future operations.
We developed detailed case studies of nine supply items that were reported  to be in short supply during OIF. (These items, identified in the Results in  Brief section, were managed by various organizations within DOD  including the Army, the Marine Corps, and DLA.) We chose the items that  we believed presented possible shortages with operational impacts based  on information available in GAO and military reports, military and  contractor lessons-learned studies, and other accounts covering the time  period between October 2002 and September 2004. To identify the extent  and impact of supply shortages, we visited numerous DOD logistics  organizations to obtain data on the production, availability, and distribution  of supply items at the national level. When supply data specifically for OIF  were not available, we used worldwide data since OIF received supply  priority. We also interviewed members of units that had returned from the  theater to determine the extent and impacts of item shortages on their  operations. We identified deficiencies that affected the availability of  two or more of the case study items. We worked with DOD logistics  agencies, operational units, and service and geographic commands to  evaluate the significance of these deficiencies to DOD’s overall logistics  system. We also identified DOD’s and the services’ short-term and long- term efforts to address these shortages. We assessed the reliability of the  data we obtained for individual items and determined they were  sufficiently reliable for our purposes. We performed our review from  March 2004 through February 2005 in accordance with generally accepted  government auditing standards. A detailed discussion of our scope and  methodology is located in appendix I.
subsections: section_title: Background
paragraphs: CENTCOM, whose area of responsibility encompasses 27 countries in  South and Central Asia, the Horn of Africa, the Arabian Peninsula, and Iraq  began planning for OIF in late 2001 (see fig. 1).
Starting in mid-2002, CENTCOM began to improve the U.S. military’s  infrastructure in Kuwait. This included an expansion of fuel and port  facilities to support the arrival of U.S. military units. Beginning in the fall  of 2002, CENTCOM began to deploy troops to the OIF area of operation.  These deployments continued up to, and beyond, the start of major  combat operations in Iraq on March 19, 2003. According to the Defense  Manpower Data Center, the number of military personnel deployed in  CENTCOM’s area of responsibility in support of OIF and Operation  Enduring Freedom steadily increased from over 113,000 in December 2002  to over 409,000 in May 2003 (see fig. 2). During major combat operations,  over 280,000 U.S. military personnel were deployed in Iraq, Kuwait, and  nearby Persian Gulf nations. All of the services were represented in the  theater, but U.S. Army units formed the bulk of military personnel. After  major combat operations were officially declared over on May 1, 2003, the  total number of personnel in CENTCOM’s area of responsibility began to  gradually decrease. However, U.S. and coalition forces continue to conduct  stabilization operations in Iraq and DOD increased the number of military  personnel in Iraq to support the elections in January 2005.
subsections: section_title: Organizations Responsible for Logistics
paragraphs: CENTCOM’s command authority over units deployed to its area of  responsibility allows it to direct all necessary military actions to assigned  military forces, including units deployed in both Operation Enduring  Freedom in Afghanistan and OIF. Command authority also provides the  geographic combatant commander with directive authority over logistics.  The services and other defense components, however, share the  responsibility of supplying U.S. forces.
The directive authority gives the combatant commander the ability to shift  logistics resources within the theater, but logistics support outside of the  area of responsibility is usually dependent on the services. The combatant  commander relies on the services’ logistics components, such as the  U.S. Army Materiel Command (AMC), the U.S. Marine Corps Logistics  Command, and DLA to purchase supplies and manage inventory. AMC  has major subordinate commands that manage supply inventories,  such as the Communications-Electronics Command (CECOM) and the  Tank-automotive and Armaments Command (TACOM). DLA has a role in  packaging supplies for shipment, while the U.S. Transportation Command  is responsible for delivering them to theater. The combatant commander  assigns one service as the lead for logistics support, including  transportation, in the theater. During OIF, the Army was the lead service  for logistics support.
section_title: War Reserves
paragraphs: The military services rely heavily on their specifically designated war  reserve stock, including weapon systems, equipment, and spare parts, to  equip units when they first arrive in a theater of operation. The Army’s war  reserves consist of major items including trucks and secondary items such  as spare parts, food, clothing, medical supplies, and fuel. Spare parts have  the largest dollar value of the Army’s secondary items.
War reserves are protected go-to-war assets that are not to be used for  purposes such as improving peacetime readiness or filling unit shortages.
Some of these assets are located in Southwest Asia, the Pacific, Europe,  and on special war reserve ships. War reserves are funded through direct  congressional appropriations that are requested in the services’ annual  budget submissions.
AMC is responsible for determining the Army’s requirements for war  reserve spare parts. To do this, AMC officials use a computer model—the  Army War Reserve Automated Process system. The model uses DOD  planning guidance and Army information on anticipated force structure  including a list of the end items and associated spare parts. For each end  item or part, the model uses data on expected usage and spare parts  consumption rates based on breakage, geography, environment, and rates  of equipment loss due to battle damage.
The Marine Corps Logistics Command and logistics planners from Marine  operational units are responsible for determining annually the adequacy of  war reserve stock based on current operational plans. Once this is  determined, planning officials confirm the availability of the supplies with  DLA and other supporting logistics agencies that manage individual items.
section_title: Operational Requirements
paragraphs: DOD forecasts operational requirements for spare and repair parts  differently than it does for items that result from rapidly emerging needs.  DOD forecasting methods for spare and repair parts vary by service. The  Army normally uses a computer model to forecast its spare and repair parts  requirements based on the average monthly demand over the previous  24 months. The Marine Corps also uses models and involves operational  and logistics planners at several levels of command to validate their  forecasted requirements.
Operational requirements to support rapidly emerging needs, such as  Interceptor body armor and up-armored High-Mobility Multi-Purpose  Wheeled Vehicle (HMMWV), are developed outside of normal supply  forecasting procedures. They are identified through operational needs  statements from the theater that are validated and resourced by the Army.  Units in theater submit operational needs statements for the items, which  are combined by their higher headquarters into theater requirements.
The Coalition Forces Land Component Command communicates these  requirements to the Department of the Army, where they are validated and  resourced by offices of the Assistant Secretary of the Army (Financial  Management and Comptroller), the Deputy Chief of Staff for Operations,  the Deputy Chief of Staff for Program and Analysis, and the Deputy Chief of  Staff for Logistics and eventually transmitted to the program manager.
section_title: Supply Item Funding
paragraphs: Generally, supplies and equipment for customers—including military units  and DOD agencies—are purchased using defense working capital funds or  procurement funds.
subsections: section_title: Defense Working Capital Funds
paragraphs: Of the nine items we examined, seven are purchased using defense  working capital funds (assault amphibian vehicle (AAV) generators,  armored vehicle track shoes, chemical-biological suits, lithium batteries,  Marine Corps helicopter rotor blades, Meals Ready-to-Eat (MRE), and  tires). Working capital fund managers at the logistics agencies obligate and  spend funds to purchase supplies from manufacturers and repair items to  build up inventories in anticipation of sales. Military units then order  supplies from the logistics agencies. When the requisitioned supplies are  delivered, the units pay for them with funds that are appropriated annually  by Congress. The logistics agencies then use this revenue to pay the  manufacturers and to cover their own operating costs.
Several funds make up the defense working capital funds, including the  Army Working Capital Fund, the Navy Working Capital Fund (which  finances Marine Corps managed items), and the Defense-wide Working  Capital Fund (which finances Defense Logistics Agency-managed items).  AMC uses the Army Working Capital Fund to purchase and maintain  supplies.
section_title: Procurement Funds
paragraphs: The remaining two items (Interceptor body armor and up-armored  HMMWVs) are purchased with procurement funding because they are still  in the process of initial issuance. Procurement funds are used to pay for  such expenses as the purchase of weapons and weapon components,  communication and support equipment, munitions, initial and  replenishment spare parts, and modernization equipment.
Project managers for these items receive congressional appropriations to  fund purchases of additional supplies.
section_title: Distribution Doctrine and Process
paragraphs: DOD guidance defines distribution as the operational process of  synchronizing all elements of the logistics system to deliver the “right  things” to the “right place” at the “right time” to support the combatant  commander. These elements include physical, financial, information, and  communication networks, which can be divided into two general  categories—the actual movement of supplies (physical networks) and the  use of information technology (financial, information, and communication  networks) to support distribution system activities. Table 2 lists the  primary DOD regulation and joint doctrine that guide the distribution  process.
In its guidance, DOD identifies eight fundamental principles of theater  distribution: 1. Centralized management: Identify one manager who is responsible for  distribution, visibility, and control of items in the theater distribution  system. 2. Optimize the distribution system: Give distribution managers the ability  to maintain visibility in locations under their control and provide them  with resources to meet changing requirements. 3. Velocity over mass: Substitute speed and accuracy for large  investments in inventory. 4. Maximize throughput: Reduce the number of times that supplies must  be opened and sorted. 5. Reduce customer wait time. 6. Maintain minimum essential stocks: Reduce reliance on large, costly  stockpiles. 7. Maintain continuous, seamless, two-way flow of resources: Apply the  distribution principles to maintain an integrated and seamless  distribution system. 8. Achieve time definite delivery: Deliver the right supplies to the  combatant commander at the right place and time.
Figure 3 illustrates the complexity of DOD’s joint distribution system. The  system moves supply items from inventories, vendors, and repair facilities  in the U.S. to deployed units in the theater. The system also returns items to  the U.S. for repair and maintenance.
section_title: Recent Studies of OIF Logistics
paragraphs: Several DOD components have recently commissioned assessments of  logistics operations during OIF with the aim of identifying areas for  improvement. One study, Objective Assessment of Logistics in Iraq,  commissioned by the Deputy Under Secretary of Defense (Logistics and  Materiel Readiness) and the Director for Logistics, Joint Staff, was  published in 2004 by the Science Applications International Corporation  (SAIC). This study identified problems with DOD’s logistics support and  contained several recommendations that were endorsed by the Under  Secretary of Defense (Acquisition, Technology, and Logistics) such as  synchronizing the distribution chain from the U.S. to CENTCOM’s area of  responsibility and resolving issues with technology.
Another study, commissioned by the Army Deputy Chief of Staff for  Logistics, is an independent assessment of the Army’s logistics experience  in OIF by the RAND Corporation’s Arroyo Center. This study focuses on  how Army forces were sustained and the performance of the sustainment  system during combat operations and initial stability and support  operations. RAND’s report is currently under review by the Army.
section_title: Supply Shortages Reduced Operational Capability and Increased Risk to Troops in Iraq
paragraphs: During OIF, DOD was responsible for moving over 2 million tons of  supplies and spare parts to theater. U.S. troops experienced shortages of  seven of the nine items GAO selected for review. According to the 2004  National Military Strategy, U.S. forces expect to have sufficient quantities  of the right items at the right time. However, demand for the seven items  exceeded availability sometime between October 2002 and September  2004. The overall impact of these shortages on military operations is  difficult to quantify because it varied between combat units and is not  always apparent in DOD’s readiness systems. The remaining two items that  we examined did not experience shortages in theater. Detailed case studies  for the nine items are in appendixes II-X.
subsections: section_title: Shortages Occurred during OIF for Seven Critical Items
paragraphs: U.S. troops in the OIF theater did not always have sufficient quantities of  seven items that we reviewed. For some items, the shortages occurred  primarily during initial troop deployments and major combat operations in  early 2003; for other items, shortages emerged during the sustainment  period after major combat operations were declared over in May 2003. The  overall impact is difficult to quantify because it differed between units.  For example, while units in the 3rd Infantry Division reported that tire  shortages affected their mission by forcing them to abandon equipment,  the 4th Infantry Division reported that their tire shortages had no affect on  their mission. The following describes the shortages for each of the  seven items.
Generators for AAVs. Marine Corps units in Iraq experienced  shortages of generators for their AAVs during deployment and combat  operations in early 2003. The AAV is a landing vehicle that the Marine  Corps used as an armored personnel carrier in Iraq. Without the  generator, which provides electric power, the AAV cannot operate.  Although 140 generators were reported shipped from the U.S., Marine  forces in theater reported receiving only 15. Neither we nor the Marine  Corps could find the remaining 125 in the supply system. While the  service did not document any operational impacts specifically due  to generator shortages, its forces had to strip parts from about  40 nonoperational vehicles to maintain the operational capabilities of  other vehicles.
Track shoes for Abrams Tanks and Bradley Fighting Vehicles. As  the conflict in Iraq continued, track shoes, essential components of  combat vehicles such as Abrams tanks and Bradley Fighting Vehicles,  were not available to meet increasing demands. Although sufficient  quantities of track shoes existed to meet demand at the beginning of  combat, by May 2003 actual demand was 5 times the forecasted  demand primarily because of the heavy wear and tear on track shoes as  a result of high mileage, poor road conditions, and extreme desert heat.  Major combat units reported that significant shortages of track shoes  negatively affected their operational capabilities. For example, the  3rd Infantry Division reported in June 2003 that 111 (60 percent) of  its 185 Abrams tanks were unable to perform their missions because  of supply shortfalls that included track shoes. Furthermore,  159 (67 percent) of the division’s 237 Bradley Fighting Vehicles were not  mission capable for the same reason.
Interceptor Body Armor. Demand for Interceptor body armor  exceeded supply during OIF. The Coalition Forces Land Component  commander decided to increase individual protection by issuing the  armor to all troops and civilians. As a result, demand for the body armor  surged, with quarterly demand rising from a pre-war level of about  8,600 vests and 9,600 plates, to about 77,000 vests and 109,000 plates by  the time the war commenced on March 2003. Back orders for plates  peaked at 598,000 in November 2003, while back orders for vests  reached 328,000 in December. Even though the services did not report  that the lack of body armor impacted their missions during OIF, there  were serious concerns. For example, combat support units in the Army  and Marine Corps were among the last to be equipped with the armor,  increasing the risk to personnel given the enemy’s focus on attacking  supply routes.
Lithium batteries. Army and Marine Corps forces operating in Iraq  experienced severe shortages of lithium batteries, particularly BA-5590s  and BA-5390s, during major combat operations in the spring of 2003.  These nonrechargeable batteries power some 60 critical  communications and electronics systems, such as radios and missile  guidance systems. Worldwide demand for these batteries surged  from a peacetime average of below 20,000 per month prior to  September 11, 2001, to a peak rate of over 330,000 in April 2003. As a  result, the number of back orders rose rapidly to 900,000 by May 2003.  According to Marine Corps officials, if the war had continued at the  same pace into May 2003 or beyond, Marine units would have  experienced degraded communications capability and increased risk as  a result of battery shortages.
MREs. U.S. forces in Iraq experienced shortages of MREs primarily  during the deployment and major combat phases in February, March,  and April 2003 before normal dining facilities were established. The  peak monthly demand for MREs rose to more than 1.8 million cases,  while inventories dropped to a level of 500,000 cases. In late April when  other food options became available, demand fell rapidly. While certain  Army units reported running out of MREs, available data only shows  that they came close. According to a RAND study, some Army units  came within an estimated 2 days or less of exhausting their on hand  quantities. Similarly, according to a Center for Naval Analysis study, at  times Marine Corps combat support units had less than 1 day of MREs  on hand. As a result, both Army and Marine Corps units were at risk of  running out of food if supply distribution was hindered.
Tires for 5-ton trucks and HMMWVs. The rising demand for  truck tires during and after major combat operations in Iraq nearly  exhausted existing inventories. The demand grew as vehicles were  driven long distances and were modified with add-on-armor. For  example, in August 2003, the Army’s inventory contained only 505 tires  for 5-ton trucks, which fell far below the worldwide monthly demand of  more than 4,800 tires. As a result, back orders spiked to over 7,000 for  5-ton truck tires and to over 13,000 for HMMWV tires. The shortages  reduced the operational capabilities of these vehicles and negatively  impacted operations in Iraq. For example, 3rd Infantry Division units  reported that tire shortages forced them to abandon equipment, and  Marine Corps units reported stripping and abandoning otherwise good  vehicles because of a lack of tires.
Up-armored HMMWVs and add-on-armor kits. Since the  U.S. military began identifying requirements for these vehicles during  the summer of 2003, there has been a gap between the number of  vehicles required and the number being produced by the industrial base.  This new requirement was based on the need to protect soldiers and  Marines executing distribution and force protection missions. The  up-armored HMMWV provides enhanced protection against rifle  rounds and explosive blasts while the add-on–armor kits provide  some additional protection to previously unarmored vehicles. As of  September 2004, only 5,330 of the 8,105 required vehicles were in  theater. The overall impact of the shortages of up-armored HMMWVs  and add-on-armor kits is difficult to measure because units do not report  the direct effects of using unarmored HMMWVs. However, according to  a Center for Army Lessons Learned study, the risk of harm to both  personnel and equipment from improvised explosive devices is greatly  reduced when they are transported in an up-armored HMMWV.
section_title: Two Items Were Not in Short Supply During OIF
paragraphs: Two items we examined—chemical-biological suits and Marine Corps  helicopter parts—did not experience shortages. In these cases, although  demands were high because of wartime operations, the defense supply  system was able to meet the needs of deployed forces. A discussion of the  availability of the two items follows.
Chemical-biological suits. Although there was a perception that  sufficient quantities of the new Joint Service Lightweight Integrated Suit  Technology (JSLIST) chemical-biological suits were not available during  OIF, our work did not identify any actual shortages in the theater of  operations. Concerns about a shortage of chemical-biological suits arose as a result of an October 2002 Congressional request that DOD  provide suits to all military and civilian personnel located in the OIF  theater. However, according to DLA, the contracting agent for  chemical-biological suits, and our analysis, there were sufficient  quantities of the suits in the inventory to meet the suit demand  during OIF.
Marine Corps helicopter rotor blades. Although concerns were  raised about shortages of helicopter parts for Marine Corps helicopters,  specifically rotor blades, we did not identify any shortages in the theater  of operations. Marine Corps officials reported there were no rotor blade  shortages and our analysis of supply data confirms this. In addition,  the mission capable rates during OIF for the two helicopters we  reviewed—the UH-1N and the CH-53E—were comparable to peacetime  rates.
section_title: Impact of Shortages Was Not Always Apparent in DOD’s Readiness Reporting System
paragraphs: We were not always able to identify the impact of specific shortages  because, although DOD’s supply system showed shortages of items in  theater, DOD’s readiness reporting systems did not always show the impact  of these shortages on unit operational capability. Such systems as the  Global Status of Resources and Training System and Unit Status Reports  are intended to identify the ability of units to accomplish their missions and  the problems affecting mission performance each month. In addition, other  reporting mechanisms, such as lessons learned reports or after-action  reports, may also disclose the impact of shortages on operations but do  not tie directly to readiness reporting. As a result, we used a variety of  documents, some obtained directly from the units, to identify the impact  of supply shortages.
For our nine items, the information reported through the various readiness  systems, in some cases, was inconsistent with the impact cited in reports.  For example, in July 2003, unit status reports from the 4th Infantry  Division’s battalions showed that approximately 145 to 150 of their  176 Bradley Fighting Vehicles were mission capable, translating to a  mission capability rate of around 84 percent. However, a May 2004 lessons  learned report prepared by the division indicated that the overall mission  capability rate for its Bradleys was 32 percent during the July 2003 time  frame and that the degraded status was due to a shortage of armored  vehicle track shoes and other vehicle suspension items. In a June 2003  status report, four of the 3rd Infantry Division’s five infantry battalions  reported that 65 percent of their Bradley vehicles were mission capable.  However a 3rd Infantry Division report for June 2003 showed that  65 percent of the division’s Bradleys were non-mission capable because of  supply-related reasons, which unit officials attributed almost exclusively to  track shoe shortages.
There were also instances of readiness information about unit status in Iraq  not being reported. For example, in August 2003, the 4th Infantry Division’s  five Armor battalions and one Calvary unit did not enter any mission  capability data into the readiness reporting systems about the status of  their 247 Abrams tanks. However, the May 2004 briefing report prepared by  the division indicated that by July 2003, 28 percent of the division’s tanks  were non-mission capable. The primary reason given was lack of tank  shoes and related suspension parts.
section_title: Multiple Supply Chain Deficiencies Contributed to Supply Shortages
paragraphs: Five deficiencies contributed to shortages in the supply of seven of the  nine items that we studied. According to DOD data and contractor studies,  these deficiencies also affected other items in the supply system. The  deficiencies were (1) inaccurate and inadequately funded Army war  reserve requirements, (2) inaccurate supply forecasts, (3) insufficient  and delayed funding, (4) delayed acquisition, and (5) ineffective  distribution. Table 3 identifies the deficiencies that affected each of the  seven supply items.
subsections: section_title: Inaccurate and Inadequately Funded Army War Reserve Requirements for Spare Parts Led to Early Shortages during OIF
paragraphs: The inaccurate requirements for and poor funding of war reserves affected  the availability of three of the supply items (armored vehicle track shoes,  lithium batteries, and tires). Annual updates of the Army’s war reserve  requirements for supply items have not been conducted and, as a result, the  Army did not have an accurate estimate of the spare parts and other items  needed for a contingency such as OIF. In addition, over the past decade, the  Army underfunded its war reserve spare parts, which has forced managers  to allocate money for certain items and not for others.
subsections: section_title: Army War Reserve Spare Parts Requirements Were Out of Date and Inventory Was Inadequate
paragraphs: Army officials told us that annual updates of its war reserve requirements  for spare parts have not been conducted since 1999. AMC uses a computer  model, called the Army War Reserve Automated Process, to determine its  requirements for spare parts in the war reserve. This model is supposed to  be run on the basis of annually updated defense planning guidance and is  designed to support the latest war plans and Army force structure.  According to AMC officials, the model has not been run since 1999 because  the Department of the Army has not provided the latest guidance, which  details the force structure and operations that the Army’s war reserve must  support. However, an Army official provided us with copies of the Army  guidance from 2001, 2003, and 2005 that AMC could have used to initiate  computation of war reserve requirements. The Army official stated that AMC did not run the model for a variety of reasons such as support for  ongoing missions and problems with the implementation of a new database  and modeling system.
Because the requirements were out-of-date, the war reserve inventories for  some spare parts were inadequate and could not meet initial wartime  demands. For example, the war reserve requirement for nonrechargeable  lithium batteries (BA-5590s) was not sufficient to support initial operations  in OIF. The requirement for BA-5590s was set at 180,000 to support the first  45 days of operations, but this amount was considerably lower than the  actual demand of nearly 620,000 batteries recorded during the first  2 months of the conflict. CECOM officials attributed this mismatch to  inaccurate battery failure and usage rates in the 1999 model. They also said  the model did not include all the communications systems that used  nonrechargeable lithium batteries.
In another example, the war reserve requirement for track shoes for  armored vehicles was inadequate to keep pace with actual demand during  the early months of combat. As table 4 shows, the pre-OIF war reserve  requirement for track shoes for Abrams tanks and Bradley Fighting  Vehicles was, respectively, 5,230 and 5,626; however, in April 2003 the  actual worldwide demand for these tanks was four times higher.  The situation was even worse for 5-ton truck tires.
Since the end of major combat operations, war reserve managers have  made manual adjustments to the requirements to reflect supply  experiences from OIF. For example, officials told us that they have  adjusted the Army and the Marine Corps war reserve requirement for  BA-5590 and BA-5390 lithium batteries upward to more than 1.5 million  batteries based on the average monthly demand of 250,000 batteries  experienced during OIF multiplied by 6 months. Similarly, war reserve  managers at TACOM have increased the requirements for Abrams and  Bradley tank track shoes to 32,686 and 34,864, respectively. While these  actions may correct a particular problem, they do not address the systemic  inaccuracy of the Army’s war reserve requirements.
In prior reports, we have identified problems with the Army’s process for  computing the war reserve spare parts requirements. In a 2001 report,  we recommended that the Secretary of Defense direct the Secretary of the  Army to develop and use the best available consumption factors; improve  the methodology used to determine requirements by considering planned  battlefield maintenance practices; and develop industrial-base capacity on  current, fact-based estimates for the war reserve. In a 2002 report, we  recommended that the Secretary of Defense direct the Secretary of the  Army to have the Commander of AMC change its process of calculating war  reserve requirements.  While the Office of the Secretary of Defense  concurred with these recommendations, the Army has yet to implement  them.
section_title: Risk Management Decisions Led to Years of Low Army War Reserve Funding
paragraphs: The Army’s war reserve requirements for spare parts have been  significantly underfunded for many years, indicating that the Army  has made a risk management decision to not fully fund them. In  November 1999, Army documents indicated that the Army had only  $1.3 billion in parts prepositioned, or otherwise set aside for war reserves,  to meet its stated requirement of $3.3 billion. AMC data indicate that a lack  of funding for war reserve spare parts continues to be an issue. As table 5  shows, as of October 2004, only about 24 percent ($561.7 million out of  $2,327.4 million) of AMC’s total spare parts requirement is currently funded  and on hand. Moreover, AMC data show this pattern of underfunding is  expected to continue through fiscal year 2009.
As a result of this low funding, war reserve managers told us that they must  prioritize how the available funding is allocated based on their professional  experience. For example, the war reserve manager for TACOM reported  that he tends to spend his available funds on expensive items with long  production lead-times, such as tank engines, because they are difficult to  acquire on short notice. Conversely, lower cost items with shorter  production lead-times, such as tires, do not receive funding priority.
The Army accepts the risk of unfunded war reserve requirements in order  to fund other priorities, such as operations and the procurement of new  systems. Although, the Army has reported the amount of war reserve  underfunding to Congress, the risk of not funding the war reserve is not  clearly stated.
section_title: Army Supply Forecasts Did Not Accurately Represent Troop Needs in OIF
paragraphs: The Army’s requirements process did not accurately forecast the supplies  needed to support U.S. forces during OIF for four of the items we studied  (armored vehicle track shoes, lithium batteries, MREs, and tires). As  indicated by Army regulation, AMC normally uses a computer model to  forecast its spare and repair parts requirements. The model uses the  average monthly demand over the previous 24 months to predict future  equipment use and demand. Although the Army regulation indicates that  the model should be able to switch to a wartime demand forecasting  method, AMC officials stated the system has no wartime forecasting  capability. As a result, the Army’s supply requirements forecasting model  could not forecast the wartime surge in requirements during OIF. In  contrast, DLA’s model has the capability to forecast requirements for  contingencies, but it was not completely effective, as in the case of MREs.
Instead of using the model, the Army relied on the expert opinion of item  managers, who manage supply items at AMC’s subordinate commands.  Item managers, however, did not have sufficient information on estimated  deployment sizes or duration and intensity of operations to accurately  forecast supply requirements for OIF. According to TACOM officials, AMC  initially directed item managers to use their expert opinion and knowledge  to develop forecasts, without input from operational planners in  CENTCOM. AMC officials stated that Army headquarters did not provide  them with formal guidance on the duration of the conflict, supply  consumption, or size of the deploying force. AMC documents show and  their contractors confirm that AMC gathered some anecdotal information  on force size and the duration of operations in November 2002. However,  item managers at AMC’s subordinate commands reported they did not  always receive adequate guidance from AMC. For example, officials at  TACOM stated they did not receive planning guidance on operational plans  from AMC to incorporate into their forecasts of track shoe or tire  requirements. The forecasted monthly requirement for Abrams track  shoes was 11,125, which was less than half of the actual requirement of  23,462 shoes in April 2003. Forecasts for 5-ton truck tires were also  inaccurate. Worldwide demand was forecasted at 1,497 tires during  April 2003, less than a third of the actual demand of 4,800.
In contrast, officials at CECOM reported that in the summer of 2002,  operational planners consulted them about the number of nonrechargeable  lithium batteries needed to support operations. Subsequently, CECOM  officials presented these new requirements to AMC and the Joint Materiel  Priorities and Allocation Board and received $38.2 million in additional  obligation authority for BA-5590 and BA-5390 batteries. Despite these  efforts, demand for batteries outpaced production during OIF combat  operations.
The Marines forecast supply requirements for their initial operations based  on operational plans and modeling factors that involve both operational  and logistics planners. Modeling factors include historical supply data,  number of personnel involved in an operation, distance of operation, and  number of days of operation. Normally, the forecasting process includes  many echelons of Marine Corps command. Initially, the 1st Marine  Expeditionary Force headquarters provides operational plans to the  deploying units that determine the supply requirements for an operation.  Once the deploying units forecast a supply requirement, it is returned to  headquarters for review. Deploying units review the supply requirements  again before passing them to the Marine Forces Pacific Command for final  assessment. The Marine Corps Logistics Command, the service’s integrated  logistics manager, sends the requirements to DLA and other supply  providers. Supply providers then inform the Logistics Command and the  deploying units about their ability to fill the forecasted requirements.  According to the Marines, they used this process to forecast supply  requirements before deploying to OIF.
After the end of major combat operations, the Marine Corps began an after- action review process to analyze the effectiveness of their OIF supply  forecast. As part of this analysis, the 1st Marine Expeditionary Force  assessed the correlation between supply forecasts and supply usage. This  analysis showed that 88 percent of the types of repairable supply items  forecasted were actually needed, and 62 percent of the types of  consumable items forecasted were demanded, in the first 90 days.  These data indicate that a significant number of unneeded items could have  been sent to theater, placing an unnecessary burden on the distribution  system. However, the Marine Corps has not analyzed the accuracy of  whether the quantities forecasted equaled the quantities needed. Without  such analysis, the Marines cannot determine if their forecasting process  provided them with the right items in the right quantity at the right time  during OIF.
section_title: Insufficient and Delayed Funding Limited the Availability of Supply Items for OIF
paragraphs: A lack of sufficient funding (obligation authority) within the Army’s  working capital fund and delays with the release of funds limited the  availability of three reviewed items (armored vehicles track shoes,  lithium batteries, and tires). The delays may have been due to the Army’s  multi-stage process to validate requirements. In contrast, DLA’s working  capital fund was able to move sufficient obligation authority among  accounts to support rapidly increasing demands.
subsections: section_title: AMC Did Not Receive Sufficient Obligation Authority from the Department of the Army to Meet Spare Parts Requirements Promptly
paragraphs: According to a DOD regulation, DOD components are supposed to  structure their supply chain processes and systems to provide flexible and  prompt support during crises. However, during fiscal year 2003, AMC did  not promptly receive obligation authority to match its stated requirements.  The Department of the Army released $2.9 billion of obligation authority  into the Army Working Capital Fund to buy supplies in October 2002 as part  of the fiscal year 2003 budget cycle (see fig. 4). This amount was based on  the requirements established in the President’s Budget prepared 2 years  earlier. By the time fiscal year 2003 began, AMC had identified a new supply  requirement of $4.8 billion to support both peacetime operations and the  ongoing global war on terrorism, but, the obligation authority provided in  October 2002 did not support this revised requirement. While Army  headquarters provided some additional funding to AMC, AMC increased its  supply requirements again in March 2003 to $5.6 billion. However, the total  obligation authority AMC received at that time equaled only $4.7 billion.  AMC did not receive sufficient obligation authority to support the  final validated requirements of nearly $6.9 billion until the end of  fiscal year 2003, 4 months after major combat operations ended.
In addition to establishing requirements to support its peacetime and  continuing global war on terrorism operations, AMC identified additional  requirements, called reset requirements, of $1.3 billion to support the  repair of items coming back from theater. As figure 4 shows, by the end of  fiscal year 2003, AMC had received $6.9 billion of its total requirement  of $8.2 billion (including reset) in obligation authority, a shortfall of  $1.3 billion.
We could not determine exactly why sufficient funding was not provided to  AMC more quickly, because sufficient records were not available to track  when AMC and its subordinate commands requested additional funding  from Army headquarters or the amounts requested. Similarly, Army  headquarters could not provide information about the timing of its requests  for additional obligation authority to the Office of the Under Secretary of  Defense (Comptroller). However, the Army’s requirements validation  process likely contributed to delays in the release of obligation authority  into AMC’s Army Working Capital Fund. After AMC completes its internal  validation process and requests additional funding above the programmed  requirement during the year of execution, several organizations within  Army headquarters reexamine AMC’s requirements. In the absence of  specific direction in Army regulations, Army headquarters has developed a  process for validating AMC’s requirements. While the Office of the Deputy  Chief of Staff for Logistics has the main responsibility for validating AMC’s  functional requirements, the Office of Deputy Chief of Staff for Operations,  the Office of the Deputy Chief of Staff for Program and Analysis, and the  Assistant Secretary of Army (Financial Management and Comptroller)  must also review and agree on the requirements. Once these organizations  validate the requirements, the Assistant Secretary of the Army (Financial  Management and Comptroller) requests obligation authority from the DOD  Comptroller. This lengthy process may have delayed the release of funds  and contributed to shortages of tires, track shoes, and lithium batteries.
The additional time associated with the Army’s validation process was  exemplified by events during fiscal year 2003. AMC set its revised  supply requirements to $4.8 billion in October 2002. However, the DOD  Comptroller did not release the first additional obligation authority of  $600 million until January 2003, 3 months later. Army headquarters office  released its next increase of obligation authority of $1.1 billion in  March 2003, for a total of $4.6 billion; nearly 6 months after AMC identified  the initial requirement. Army officials were unable to tell us when they had  submitted their requirements to the DOD Comptroller because they said  they often submitted requests for additional obligation authority during the  fiscal year informally via e-mails and telephone calls. Accordingly, detailed  records were not kept. We were able to confirm that the time between  the releases of obligation authority from the DOD Comptroller to the  department of the Army did not take longer than two weeks. This indicates  that for most of the 6 months, AMC’s request for additional obligation  authority was somewhere in the Department of Army’s validation process.
In addition to delays in receiving funds, AMC suffered from an overall lack  of sufficient obligation authority for its major subordinate commands that  contributed directly to shortages of tires, track shoes, and lithium batteries  during OIF. Initial priority was to provide funding to the U.S. Army Aviation  and Missile Command to support critical aviation systems and then to  TACOM for tracked and tactical wheeled vehicles. Without prompt  obligation authority, item managers could not contract for supplies in  anticipation of customer demands. According to item managers, they  need sufficient obligation authority in advance of customer demands in  order to have sufficient supplies available. TACOM officials reported that  the lack of adequate obligation authority prevented them from buying  supplies, including tires and tank track shoes, in anticipation of demands.  For example, in October 2002, TACOM item managers identified total  requirements of nearly $1.4 billion, but only had authority to obligate  approximately $900 million. By May 2003, TACOM’s requirements had  increased to over $2.1 billion, but only $1.5 billion in obligation authority  was available. By the end of the fiscal year, TACOM’s total requirement,  including funds necessary to reset the force, totaled $2.7 billion, but its  obligation authority was less than $2.4 billion. This shows that obligation  authority for tires and tank track shoes lagged behind requirements,  thereby preventing item managers from buying supplies in anticipation of  demand. Similarly, CECOM reported that unfunded requirements over  several prior years affected its purchases of lithium batteries. CECOM  identified requirements of nearly $1.5 billion for fiscal year 2003, but  received less than $1.1 billion in obligation authority for the year.
section_title: DLA Received Sufficient Obligation Authority to Meet Customer Supply Needs
paragraphs: In contrast to the Army, DLA received sufficient obligation authority from  the DOD Comptroller to meet increasing customer supply needs during  OIF. DLA set the requirements for its supply management business area  at $18.1 billion and received $16.5 billion of this amount in obligation  authority in October 2002 (see fig. 5). By February 2003, it had received  obligation authority that kept pace with increasing requirements. As  requirements increased during OIF, the agency was able to request and  receive additional obligation authority to purchase supplies in anticipation  of customer needs. By the end of the fiscal year, DLA’s supply requirements  had reached $25.0 billion, and it had received an equal amount of obligation  authority to meet those requirements.
DLA officials told us they were able to obtain timely increases in obligation  authority from the DOD Comptroller because of their requirements  validation process. The agency conducts an ongoing review of its  requirements throughout the year to ensure they are updated as changes in  demand occur. Agency officials then request additional obligation authority  directly from the DOD Comptroller. This process allowed DLA to submit  requirements and receive increased obligation authority several times  during fiscal year 2003. Agency officials stated that having accurate  requirements ensures that the DOD Comptroller accepts the requirements  without further validation. According to DLA officials, the DOD  Comptroller was responsive to the agency’s needs, providing additional  obligation authority within days of a request.
section_title: Delayed Acquisition Caused by a Variety of Challenges
paragraphs: The supply system faced several challenges in rapidly acquiring three of  the items we reviewed to meet the emerging demands caused by OIF  (Interceptor body armor, lithium batteries, and up-armored HMMWVs  and kits). According to a DOD regulation, supply chain processes and  systems, which include relationships with commercial manufacturers,  should provide flexible and prompt support during crises. The rapid  increase in demand for the three items was not anticipated, and as DOD’s  supply system attempted to purchase them, its efforts were impeded  by problems that varied by item. For example, while lithium battery  production was limited by the capacity of a sole source supplier and long  production lead-times, body armor manufacturers faced shortages of the  material components of the armor.
subsections: section_title: Body Armor Production Did Not Support Increasing Demands
paragraphs: DLA data show that manufacturers of body armor could not meet the  surge in demand for the item’s two primary components, plates and  vests. For example, the worldwide demand for plates increased from  9,586 in December 2002 to 108,808 in March 2003 to a peak of 478,541 in  December 2003. A comparison of plate production rates over the same time  period shows that only 3,888 plates were produced during December 2002,  31,162 during March 2003, and 49,746 during December 2003.
Increasing requirements exceeded the manufacturer’s capacity to produce  sufficient body armor. For example, in October 2003, CENTCOM expanded  requirements for body armor to include all U.S. personnel in its area of  responsibility. The industrial base could not meet this new requirement  due to a lack of construction materials and long production lead-times.  Vest production was hindered by the limited availability of Kevlar; plate  production was initially slowed due to a lack of a special backing for the  plates and later by the limited availability of the primary component of the  plates, ceramic tiles. In addition, the minimum production lead-time of  3 months limited the manufacturers’ ability to accelerate production levels  to meet increasing demand, especially for plates, which are more difficult  to manufacture than vests. Due to these industrial-base limitations, body  armor was not issued to all troops in Iraq until January 2004, 8 months after  major combat operations were declared over.
section_title: Lithium Battery Production Did Not Support Increasing Demands
paragraphs: Demand for lithium batteries exceeded inventory and production during  OIF. As mentioned earlier in this report, the requirement for lithium  batteries had not been assessed for the war reserve for several years.  Worldwide demand for lithium batteries increased from 38,956 batteries  per month in October 2001 to a peak of 330,600 in April 2003. Concurrent  battery production was 32,000 in October 2001 and 114,772 in April 2003,  and thus was insufficient to meet demand. CECOM expanded battery  production from one to three manufacturers and received $38.2 million to  increase production capacity in late 2002; the 8-fold increase in battery  demand still outstripped production capacity. A 6-month production  lead-time for the batteries precluded the ability of the three manufacturers  to meet the peak demand during April 2003. The Marines reported  being down to only a 2-day supply of batteries in CENTCOM’s area of  responsibility in April 2003, despite OIF’s priority on worldwide supply  shipments. By late 2003, the Army was able to acquire enough batteries so  that its inventory exceeded back orders.
section_title: Pace of Production of Up-Armored HMMWVs and Kits Did Not Match Maximum Capacity
paragraphs: Meeting rapidly increasing requirements for armoring HMMWVs also  met with constraints. For example, CENTCOM stated a requirement for  1,407 up-armored HMMWVs to support OIF in August 2003 that grew  to 8,105 vehicles in September 2004. Manufacturers were producing  51 up-armored HMMWVs per month in August 2003. Recognizing the  increase in requirements in February 2004, the Army reached an agreement  with the manufacturers to increase production to 460 vehicles per month  by October 2004. However, the signed agreement with the manufacturer  indicated that maximum production could have been increased to  500 vehicles.
Funding was not available when the requirements increased. As a result,  Army officials stated that the up-armored HMMWV manufacturers were  unable to operate at the maximum capacity. In order to produce vehicles  at a consistent and high rate, the manufacturer needs to be assured of  consistent funding at least 3 months in advance of delivery. While  additional funding was received in fiscal year 2004, program managers  stated they often did not know when the next funding release would occur,  further complicating their procurement planning. As of September 2004,  Army data shows that 5,330 of the 8,105 required up-armored HMMWVs  were in CENTCOM’s area of responsibility.
Similar issues affected the delivery of add-on-armor kits from the Army’s  depot system even more dramatically. Kit production in the Army’s depot  system reached its maximum rate of 3,998 kits per month in April 2004 and  would have met the requirement sooner had the Army not slowed  production. Moreover, additional unused capacity was available for  kit production. In February 2004, a contractor-operated Army facility  informed Army depot managers that it could produce an additional  800 kits per month. While item managers stated they did not use this  contractor-operated facility due to issues with contract timing and price,  they did not have information about the reason for reducing the level of  production at the government-operated facilities. Army data show that kit  production will meet CENTCOM’s September 2004 requirement for  13,872 kits no later than March 2005.
section_title: DOD’s Response to Acquisition Challenge Was Inconsistent
paragraphs: DOD’s response to the various acquisition challenges presented by these  items was inconsistent, lacked transparency, and did not fully exploit all  of its capabilities to influence production. If the Army had forecasted  an accurate requirement for the batteries, the need for additional  manufacturers would have been recognized and production capacity could  have been increased on time to better meet the demand. In the case of the  other two items, the rapid increase in demand was not as predictable and  DOD responded differently to each. DOD officials made a very aggressive  effort to focus on and improve the availability of body armor using  regulatory authority to increase production. DOD also provided visibility  over the problem and courses of action to Congress. By contrast, DOD’s  response to the need for more armor protection for HMMWVs was more  measured and its acquisition solution was less transparent. This may have  been why members of Congress have expressed specific concerns about  the availability of these items and designated specific funds for them.
section_title: Ineffective Theater Distribution Contributed to Shortages of Supply Items
paragraphs: DOD’s inability to distribute sufficient quantities of items to troops  adversely affected the delivery of many items. While all seven items may  have experienced distribution problems, we found that four items (AAV  generators, Interceptor body armor, MREs, and tires) were directly and  negatively affected, causing troops to experience shortfalls. Distribution is  the operational process of synchronizing all elements of the logistics  system to deliver the “right things” to the “right place” at the “right time” to  support the combatant commander. This complex process involves the precise integration of doctrine, transport equipment, personnel, and  information technology. Among the problems encountered during OIF were  (1) conflicting doctrine defining the authority of the geographic combatant  commander to synchronize the distribution of supplies from the U.S. to  theater; (2) improper packaging of air shipments from the U.S., which  forced personnel in theater to spend time opening and sorting shipments as  they arrived; (3) insufficient transportation equipment and supply  personnel in theater; and (4) the inability of logistics information systems  to support the requisition and shipment of supplies into and through Iraq.
subsections: section_title: Conflicting Doctrine Impeded Effective Distribution
paragraphs: We found that conflicting doctrine impeded the establishment of a  distribution system capable of delivering supplies to the warfighter  smoothly and on time. Distribution begins with the supplier, ends with the  warfighter, and includes all systems, both physical and informational,  needed to move and manage supplies between the two ends. Currently,  joint doctrine institutionalizes separate management of sections of the  end-to-end distribution system by placing responsibility for logistics  support outside the theater with the individual services and the  U.S. Transportation Command. However, it also requires the theater  commander to synchronize all aspects of logistics necessary to support  the mission. This conflicting doctrine is contrary to DOD’s distribution  principle of centralized management, which prescribes that one manager  should be responsible for the end-to-end distribution of supplies. A SAIC  study also reports that joint doctrine does not contain any specific or  prescriptive guidance on how the combatant commander might ensure a  seamless distribution process.
During OIF, the CENTCOM combatant commander could not synchronize  the distribution process to support the mission, as required by doctrine,  with the level of control that joint doctrine suggests. Instead, the  combatant commander had to rely on other DOD components responsible for different functions along the distribution process to gain end-to-end  visibility as supplies moved through the distribution system. For example,  as we reported in December 2003, although CENTCOM issued a policy  requiring the use of radio frequency identification tags on all shipments,  to track assets shipped to and within the theater, tags were not always  used. Officials from various DOD components reported that, while no data  were compiled on the frequency of shipments being labeled with radio  frequency identification tags, only about 30 percent of the pallets and  containers coming into the theater were tagged. Officials gave various  reasons for not following the commander’s policy, such as personnel were  not trained to use the technology, tags were not available to place on loads  moving through the system, and requirements to use the technology were  not compatible with current operating systems. In addition, some Army  officials reported that CENTCOM does not have jurisdiction over their  process for shipping and tracking assets. Therefore, while CENTCOM  issued guidance directing the implementation of an in-transit visibility  system that relied on the tags, the command could not control the  organizations outside of theater responsible for applying the tags to ensure  their proper use.
section_title: Initial Shipments from the U.S. to the Theater Were Not Properly Packaged
paragraphs: DOD’s distribution principle of maximizing throughput calls for reducing  the number of times that supplies are opened and sorted in transit so that  distribution to warfighters is prompt. Early in OIF, inefficient packaging  and palletizing of air shipments created supply backlogs in Kuwait. In turn,  these backlogs delayed the delivery of supplies shipped by air to units in  Iraq, which included armored vehicle track shoes, body armor, and tires.  Insufficient information was available to allow us to link how each  individual item was affected by this distribution problem.
According to Army officials, shipments move most efficiently when they  are packed and palletized so that they do not have to be unpacked and  reloaded while in transit; sending such “pure” shipments to a single unit is a standard peacetime procedure. During OIF, Army officials expected each  pallet or container to contain supplies for only one unit or location.  However, initial shipments included spare parts and supplies for several  geographically separate units. DLA officials stated that U.S. distribution  centers could not handle the high volume of supplies and many shipments  were loaded with items for more than one customer or “mixed.” They also  said that the volume of supplies arriving daily for consolidation into air  shipments overwhelmed distribution centers in the U.S. The facilities were  structured to handle peacetime requirements and lacked the necessary  equipment and personnel to handle the surge capacity associated with  wartime. Officials stated that mixed cargo was often sent to the theater  without being sorted in order to make room for incoming supplies.  Moreover, the lack of sorting continued because of a miscommunication  between CENTCOM and DLA, the shipper. CENTCOM expected the  peacetime practice of pure pallets would continue during OIF, while DLA  officials focused on moving pallets to theater regardless of whether they  were pure or mixed. However, at that same time RAND analysts reported  that DLA facilities were sending pure pallets to U.S. Army units in Europe  and Korea.
Once in theater, mixed shipments had to be manually opened, sorted, and  re-palletized at theater distribution points, causing additional delays.  According to staff at the Theater Distribution Center in Kuwait, some  mixed shipments were not marked with all the intended destinations so the  contents of the shipments had to be examined. Army officials stated that  because mixed pallets of supplies were initially sent to theater, over  9,000 pallets piled up at the center. By the fall of 2003, 30 percent of the  pallets arriving at the center still had to be reconfigured in some way. The  Army and DLA recognized the problem and worked in conjunction with  CENTCOM to establish a “pure palleting” process at the distribution center  in Pennsylvania. This resulted in potentially longer processing times in the  United States in order reduce customer wait time in theater.
According to a RAND study, the pallets arriving in theater between  January and August 2003 contained more than 20,000 cardboard boxes of  small items. Over 4,300 boxes, about one in every five, were mixed and may  have been opened and the contents sorted before being forwarded on to customers, which further delayed delivery. The RAND study showed that it  took an average of 25 to 30 days for such mixed boxes to travel from a port  in theater, through the theater center, to the supply activity that ordered it.  In contrast, when a box with items for only one unit was shipped, it took an  average of 5 to 10 days to reach the customer.
section_title: Shortages of Supply Personnel and Transportation Equipment Hampered Supply Distribution
paragraphs: The lack of sufficient logistics resources, such as trained supply personnel  and cargo trucks, hindered DOD’s efforts to move supplies promptly from  ports and theater distribution centers to the units that had ordered them, as  expected under the DOD principle of optimizing the distribution system. As  a result, some troops experienced delays in receiving MREs and other  supplies, thereby reducing operational capabilities and increasing risk.
According to military personnel, there was a shortage of support personnel  in theater prior to and during the arrival of combat forces. Moreover, those  that arrived were often untrained or not skilled in the duties they were  asked to perform. The effects of these shortages of trained personnel were  most evident at the Theater Distribution Center and resulted in delays in  the processing (receipt, sorting, and forwarding) of supplies, and backlogs.  For example, in the late February to early March 2003 time frame, the  Center had only about 200 reserve personnel and did not reach its  authorized staffing level of 965 supply/support personnel until May 2003.  Moreover, when the center opened, it already had an estimated 5,000-pallet  backlog and its commander employed ad hoc work details drawn from  surrounding support units to help. Furthermore, organizations outside of  the theater, such as TACOM, sent personnel to Kuwait to ensure that  specific items, such as tires, were properly processed and sent to the  correct customers.
Moreover, according to after-action reports, lessons learned studies, and  discussions with military personnel, the lack of adequate ground  transportation, especially cargo trucks, contributed significantly to  the distribution problems. For example, an Army official with the  377th Theater Support Command, which was responsible for logistics  support in Kuwait, stated that when combat began his unit needed  930 light/medium and medium trucks but had only 515 trucks on hand.  Although his unit “managed” with what was available, he said that the  shortage of equipment used to haul supplies into Iraq created a strain on  materiel movement. Both the Marine Corps and the 3rd Infantry Division  also reported that available transportation assets could not meet their  capacity requirements. Even high-priority items, such as food did not  always move as intended. According to a CENTCOM after-action report,  contractors responsible for moving MREs from ports to the Theater  Distribution Center at times had only 50 of the 80 trucks needed. DLA  officials reported that at one time 1.4 million MREs were stored at a port  in theater, awaiting transport to customers.
One cause for the distribution resource problems was the failure of the  force deployment planning process to properly synchronize the flow of  combat and support forces. DOD normally uses time-phased force  deployment data to identify and synchronize the flow of forces during an  operation. Key elements of this process include requirements for military  transportation companies, contractor provided services, and host nation  logistics support. However, the process was “thrown out” in the planning  leading up to OIF. Around November 2002, DOD started to use another  method for deployment planning, referred to as the Request for Forces  process.
The Request for Forces process segregated the initial deployment plan  into over 50 separate deployment orders. DOD’s priority was for combat  forces to move into theater first. Under this new process, logistics unit  commanders had to justify the flow of their units and equipment into the  theater—often with little success. According to some DOD planners, this  approach did not adequately meet planner needs, especially the needs  of logisticians. Each deployment order required its own transportation  feasibility analysis, which resulted in a choppy flow of forces into the  theater. This in turn caused imbalances in the types of personnel needed in  the theater to handle logistics requirements. Furthermore, a RAND study  suggests that distribution assets, particularly for components such as the  377th Theater Support Command and the 3rd Corps Support Command,  were either deleted from the deployment plan or shifted back in the  deployment timeline. As a result, logistics personnel could not effectively  support the increasing numbers of combat troops moving into theater.
DOD took steps to mitigate the impact of some distribution problems, but  these did not always work. For example, according to a RAND report,  priority was given to moving critical supplies, such as food, water,  ammunition, and fuel. Other items, to include spare parts, were moved on a  very limited, opportune basis. As a result, according to one after-action  report, it took nearly 2 weeks after U.S. forces moved into Iraq for the first shipment of spare parts to reach combat forces, and this delivery was  inadequate to support an entire division engaged in combat operations.  Moreover, the Army confirmed that after 45 days of enemy engagement,  moving water still consumed over 60 percent of available theater  transportation trucks. A Marine Corps after-action report listed repair  parts distribution as a “near-complete failure.”
In order to move supplies to the troops, both the Army and Marines  contracted for additional trucks. For example, the Marine Corps contracted  for $25.6 million in services from several commercial trucking companies  to support combat operations. It justified this action by identifying  deficiencies in the provision of transportation support they expected from  other components in theater. However, Army officials stated that its  contractors did not always have sufficient trucks to move supplies as  required because contracts did not specify a level of operational readiness  for trucks. As a result, even if trucks were available, they were not always  functional. In its after-action report, the 3rd Infantry Division stated that  available transportation assets and contracted host nation support could  not meet divisional requirements for carrying capacity.
section_title: Information Systems did not Support Supply Distribution
paragraphs: According to military doctrine, financial, communication, and information  systems used to support supply distribution must be accessible, integrated,  connected, and contain accurate and up-to-date information. In other  words, these systems need to provide a seamless flow of all types of  essential data from the point of production to the warfighter. However  during OIF, the logistics systems used to order, track, and account for  supplies were not well integrated; moreover, they could not provide the  essential information necessary to effectively manage theater distribution.
Data Transmission Problems Hindered Supply Requisitions Logistics information systems in use during OIF could not effectively  transmit data, making it difficult to process and track requisitions for  critical supplies. A number of factors limited communications between the various logistics systems, including a lack of bandwidth in the theater to  satisfy all systems users, systems that were incompatible with each other,  units lacking the necessary equipment or being delayed in connecting to  the supply system, and distances being too great for supply activities to  effectively transmit data by radio. For example, the supply activities in the  Army’s 3rd Infantry Division only received about 2,500 of the over  10,000 items—including armored vehicle track shoes, lithium batteries, and  tires—they requisitioned between August 2002 and September 2003.  Officials at the 3rd Infantry Division attributed this issue specifically to  communications problems between systems. Army officials also attribute  poor communications as a major factor leading to a $1.2 billion  discrepancy between the amount of supplies shipped to the theater and the  amount actually acknowledged as received, which we reported on in  December 2003.
The Marine Corps similarly experienced communications problems  between its information technology systems during OIF. Marine forces  deployed with two different versions of the Marine Corps Asset Tracking  Logistics & Supply System logistics information system, which were not  compatible with each other. Marine Corps units in the 1st Marine  Expeditionary Force were using the Asset Tracking Logistics & Supply  System I for frontline logistics, while the 2nd Marine Expeditionary Force  was using the Asset Tracking Logistics & Supply System II+ for theater  support. Therefore, requisitions from Marine support activities at the  front lines could not be transmitted directly to Marine logistics units in the  rear. Instead, the Marines used other processes, such as e-mail and satellite  phone to requisition supplies. However, this left ordering units without any  information on the status of their requisitions. As a result, many duplicate  orders were submitted and may have unnecessarily added more cargo to  the already overwhelmed theater distribution system. A study by SAIC also  noted that the lack of logistics communications was a weaknesses during  OIF. The Army’s Deputy Chief of Staff for Logistics has since provided satellite communications equipment to the units operating in theater to  help alleviate these communication difficulties.
Available Logistics Information Systems Did Not Provide  Adequate Visibility Another major problem encountered during OIF was a lack of adequate  visibility over supplies in the distribution system. While the operation order  for OIF called for the use of radio frequency identification, tracking was  limited primarily by a failure to place radio frequency identification tags  on all shipments sent to the theater and a lack of fixed scanners needed to  read radio frequency identification tags. For example, some ports, such as  one we observed in Bahrain, had no scanners at all.
Another equally challenging problem was that scanners often failed under  the harsh environmental conditions. According to one Army assessment,  only 50 percent of the scanners inspected in Kuwait were operational. In  addition to problems with the radio frequency identification technology,  there was no suitable information system infrastructure to track and  identify supply assets. SAIC reported that the Joint Total Asset Visibility  system could not provide commanders with the asset visibility they  needed, while military officials in theater told us they knew of no joint  system that tracked supplies from the point of production to the warfighter.  Rather, logistics personnel relied on a number of unintegrated tracking  systems. As a result, CENTCOM and the major combat forces in the Army  and Marine Corps could not adequately track or identify supplies moving to  and within the theater.
The lack of in-transit visibility over supplies significantly effected  distribution. For example, an Army official responsible for logistics  operations at the Theater Distribution Center noted that incomplete radio  frequency identification tags forced the center’s personnel to spend time  opening and sorting incoming shipments. This, in turn, significantly  increased processing time, contrary to DOD’s principle of maximizing  throughput. As a result, according to a CENTCOM issue paper, around  1500 Small Arms Protective Inserts plates for body armor were lost.  Another CENTCOM report stated that 17 containers of MREs were left at a  supply base in Iraq for over a week because no one at the base knew they  were there. According to Marine Corps officials, they became frustrated  with their inability to “see” supplies moving towards them and lost trust  and confidence in the logistics system and processes. For example, the  Marines could only verify the receipt of 15 out of 140 AAV generators that  were shipped to them.
Changes to Unit Address Codes Disrupted Logistics  Information Systems The use of new OIF-specific address codes, known as Department of  Defense Activity Address Codes, for ordering supplies limited the  effectiveness of logistics information technology. The codes ensure that  supplies are sent to the correct address of the ordering unit and that the  correct unit is charged for the supplies. Because of poor linkages between  Army logistics and financial systems, a problem of where to ship and who  to bill surfaces unless a unit or activity deploys intact. For example, while  some parts of the 3rd Infantry Division remained in the U.S. during OIF, the  majority of the division deployed to Iraq. To ensure that ordered supplies  went to the correct location of a deployed unit and that the unit was  correctly charged, new codes specifically set up for OIF were issued to  deploying entities. Meanwhile, the original codes remained with that  portion of the unit that did not deploy. Approximately 10,000 new codes  were created for OIF. This caused significant disruptions to logistics  information systems as new data had to be manually updated in each  system. Many problems occurred during this process, such as the issuance  of inactive codes, use of codes already assigned to other units, and  incorrect data being input into logistics systems. These problems were  another factor contributing to the $1.2 billion discrepancy between  supplies shipped and supplies received.
Furthermore, there was a delay in updating the master code schedule that  contained all the locations associated with the new codes. This caused  significant problems for the Theater Distribution Center. According to an  April 10, 2003 Theater Distribution Center log entry, “Upwards of 50% of  pallets shipped to Doha and 20-30% of pallets shipped to Arifjan are being  returned/rejected with the reason being, ‘it doesn’t belong here.’ The  master  are not being updated when units move in or out and the   is double and triple handling cargo.” Given that  the center was already experiencing problems with personnel and  equipment shortages; additional handling of the same supplies increased  their difficulties.
Logistics Personnel Were Not Trained on Some of the Logistics  Information Systems in Use A lack of adequate training for logistics personnel also negatively impacted  the performance of logistics information systems. For example, according  to a 101st Airborne after-action review, loading codes and interfacing with  data caused problems that training could have resolved. Lack of training  also contributed to problems with asset visibility. According to a logistics  study, units were generally not trained in the use of radio frequency  identification devices. Marine Corps officials likewise stated that their  personnel were untrained in the use of tracking equipment.
section_title: DOD Actions to Improve Supply Availability for Current and Future Operations
paragraphs: As a result of logistics issues that arose during OIF, DOD, the services, and  the defense agencies have undertaken a number of actions to improve the  availability of equipment and supplies during ongoing and future  operations. Some are short-term actions aimed at improving immediate  supply availability. For example, as a result of the battery shortage, the  Joint Staff Logistics Directorate established in July 2003 a revolving  “critical few list” of approximately 25 items that the services and various  commands report as most critically needed worldwide. The Joint Staff  Logistics Directorate, in conjunction with the services, determines the  causes of the shortages and makes recommendations to the Office of the  Secretary of Defense and the services for corrective action and execution.  Other actions are long-term, systemic changes that are designed to improve  the overall effectiveness of the supply system. While we did not evaluate  the changes’ potential for success, we observed that the majority of them  focus on the distribution aspects of logistics problems, not the full range of  supply deficiencies we identified. However, other GAO engagements are  currently underway to assess some of these initiatives. (Specific short-term  and long-term actions related to each item are noted in the appendixes.)
Inaccurate and inadequately funded war reserve requirements.
The Army has not updated or run its war reserve model in order to  systemically ensure the accuracy of its war reserve requirements. Due to  its risk management decisions, it has also not funded its war reserve  requirements. However, the Army has made manual changes to its war  reserve inventory levels, based on the usage of certain items during OIF.
Inaccurate supply forecasts. DOD and the services have not  undertaken systemic actions specifically aimed at improving the  accuracy of supply forecast. However, DLA has undertaken action to  improve its customer support through its Customer Relationship  Management program, which could potentially improve its ability to  forecast customer demands.
Insufficient and delayed funding. The Army has not undertaken  long-term actions to expedite its funding process during contingencies  to be more responsive to customer needs. However, it has undertaken  short-term actions to obtain additional funding for specific supply items.  For example, AMC directed funding towards armored vehicle track  shoes.
Delayed acquisition. DOD has not undertaken long-term actions to  address acquisition issues that contributed to shortages of certain case  study items. However, DLA has undertaken other actions to improve its  ability to leverage industrial-base capabilities. DLA seeks to improve  industrial-base support through its collaborative planning initiatives  with industry. For example, its Strategic Materiel Sourcing program  establishes long-term contracts for approximately 500,000 (of a total  4.6 million) items the agency considers critical to its customers’ needs.  In addition, its Strategic Supplier Alliances program establishes formal  relationships with the agency’s top 32 sole source suppliers.
Ineffective distribution. DOD has undertaken many initiatives to  improve its distribution system, including the Secretary of Defense’s  designation of the U.S. Transportation Command as the Distribution  Process Owner. According to a Secretary of Defense memorandum,  the U.S. Transportation Command is responsible for improving the  overall efficiency and interoperability of distribution-related activities.  In January 2004, the command established a CENTCOM Deployment  and Distribution Operations Center, which is responsible for directing  airport, seaport, and land transportation operations within the OIF  theater. DOD’s Pure Pallet initiative seeks to reduce inefficiencies in the  distribution process and improve in-transit tracking of shipments by  building containers and pallets with radio frequency identification tags  that are designated to units within a specific geographic location.
The Army and DLA have also undertaken numerous actions to improve the  distribution system. The Army has identified four areas of focus for the  next 2 years: (1) “Connect Army Logisticians” by using technology to  provide logisticians and warfighters with real-time visibility over  distribution and warfighter requirements, (2) “Modernize Theater  Distribution” by developing a distribution-based logistics system to support  the warfighter, (3) “Integrate the Supply Chain” by providing a system wide  view of the supply chain through the integration of processes, information,  and responsibilities, and (4) “Improve Force Reception” by enhancing the  Army’s ability to deploy forces to theaters of operation by establishing an  early port opening capability that will result in-theater expansion and  increased theater sustainment. Furthermore, the Army has expanded its  Rapid Fielding Initiative, which accelerates acquisition and fielding  processes to ensure that troops deploy with high-priority items. DLA has  also expanded its Forward Stocking Initiative by opening a fifth forward  stock depot in Kuwait to reduce customer wait time and transportation  costs. Moreover, AMC and DLA have formed a partnership in which they  will explore the use of commercial systems to increase supply readiness,  improve in-transit visibility, cut costs, and improve parts resupply to field  locations.
section_title: Conclusions
paragraphs: In times of war, the defense supply system needs to be as responsive and  agile as the combat forces that depend upon it. In the Quadrennial Defense  Review for 2001, DOD stated its intention to transform its logistics  capabilities to improve the deployment process and implement new  logistics support tools that accelerate logistics integration between the  services and reduce logistics demand and cost. OIF tested this system as  well as industry’s capability to meet rapidly increasing demands, and, in  many instances, the system failed to respond quickly enough to meet the  needs of modern warfare. While units in Iraq achieved success on the  battlefield, the supply chain did not always adequately support the troops  and combat operations. A number of problems prevented DOD from  providing supply support to its combat forces at many points in the  process, which reduced operational capabilities and forced combat  commanders to accept additional risk in completing their missions. An  inability to adequately predict the needs of warfighters at the onset of the  war, coupled with a slow process for obtaining additional resources once  those needs were identified, resulted in critical wartime shortages. In  addition, even when sufficient supply inventories were available within the  system, they were not always delivered to the combat forces when they  needed them. All of these problems were influenced to some extent by a  lack of accurate and timely information needed to support processes  and decisions.
Unless DOD’s logistics process improves the availability of critical supplies  during wartime, combat forces engaged in future operations will likely be  exposed to risks similar to those experienced in Iraq. These risks will  continue to exist unless DOD is able to improve the availability of war  reserve supplies at the start of operations and overcomes problems  forecasting accurate wartime demands. Moreover, delays in the Army’s  funding processes will continue to place U.S. troops at risk by not enabling  AMC to swiftly meet surges in wartime demands. In addition, future  combat operations may be adversely affected unless DOD is able to  anticipate acquisition delays that could affect the availability of critical  supplies and provide transparency into how it expects to mitigate  production risks. Finally, merely increasing the availability of supplies in  the inventory will not help combat forces in the field. Troops will continue  to face reduced operational capabilities and unnecessary risks unless  DOD’s supply chain can distribute the right supplies to the right places  when warfighters need them.
While DOD took immediate steps to overcome some shortages, and is  beginning to develop solutions to some of the problems identified  during OIF, most systemic solutions have tended to center on resolving  distribution problems. If supply logistics transformation is to be successful,  DOD’s supply chain reform will need to include solutions for the full gamut  of identified deficiencies contributing to supply shortages during OIF. An  integrated approach to addressing all of these deficiencies will increase  DOD’s potential to achieve responsive, consistent, and reliable support to  warfighters, a goal envisioned in the National Military Strategy and its  logistics concepts and necessary to support the continued dominance of  the U.S. military.
section_title: Recommendations for Executive Action
paragraphs: To improve the effectiveness of DOD’s supply system in supporting  deployed forces for contingencies, we recommend that the Secretary of  Defense direct the Secretary of the Army to take the following three actions  and specify when they will be completed:  Improve the accuracy of Army war reserve requirements and  transparency about their adequacy by  updating the war reserve models with OIF consumption data that  validate the type and number of items needed,  modeling war reserve requirements at least annually to update the  war reserve estimates based on changing operational and equipment  requirements, and  disclosing to Congress the impact on military operations of its risk  management decision about the percentage of war reserves being  funded.
Improve the accuracy of its wartime supply requirements forecasting   developing models that can compute operational supply  requirements for deploying units more promptly as part of prewar  planning and  providing item managers with operational information in a timely  manner so they can adjust modeled wartime requirements as  necessary.
Reduce the time delay in granting increased obligation authority to the  Army Materiel Command and its subordinate commands to support  their forecasted wartime requirements by establishing an expeditious  supply requirements validation process that provides accurate  information to support timely and sufficient funding.
We also recommend that the Secretary of Defense direct the Secretary of  the Navy to improve the accuracy of the Marine Corps’ wartime supply  requirements forecasting process by completing the reconciliation of the  Marine Corps’ forecasted requirements with actual OIF consumption data  to validate the number as well as types of items needed and making  necessary adjustments to their requirements. The department should also  specify when these actions will be completed.
We recommend that the Secretary of Defense direct the Secretary of the  Army and Director of the Defense Logistics Agency to take the following  two actions:  minimize future acquisition delays by assessing the industrial-base  capacity to meet updated forecasted demands for critical items within  the time frames required by operational plans as well as specify when  this assessment will be completed and  provide visibility to Congress and other decision makers about how the  department plans to acquire critical items to meet demands that emerge  during contingencies.
We also recommend the Secretary of Defense take the following three  actions and specify when they will be completed:  revise current joint logistics doctrine to clearly state, consistent with  policy, who has responsibility and authority for synchronizing the  distribution of supplies from the U.S. to deployed units during  operations,  develop and exercise, through a mix of computer simulations and field  training, deployable supply receiving and distribution capabilities  including trained personnel and related equipment for implementing  improved supply management practices, such as radio frequency  identification tags that provide in-transit visibility of supplies, to ensure  they are sufficient and capable of meeting the requirements in  operational plans, and  establish common supply information systems that ensure the DOD and  the services can requisition supplies promptly and match incoming  supplies with unit requisitions to facilitate expeditious and accurate  distribution.
section_title: Matter for Congressional Consideration
paragraphs: To improve visibility over the adequacy of the Army’s war reserves,  Congress may wish to consider requiring the Secretary of Defense to  provide it information that discloses the risks associated with not fully  funding the Army war reserve. This report should include not just the level  of funding for the war reserve, which is currently reported, but timely and  accurate information on the sufficiency of the war reserve inventory and its  impact on the Army’s ability to conduct operations.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD agreed with the intent  of the recommendations and cited actions it has or is taking to eliminate  supply chain deficiencies. Some of the actions could resolve the problems  we identified when completed. Because DOD did not specify dates for  completing all of its actions, we modified our recommendations to require  specific time lines for their completion. DOD is taking other actions that  are not sufficient to fulfill our recommendations and, in several cases the  department’s comments did not specifically address how it plans to  improve current practices. In addition to our evaluation below, we address  each of DOD’s comments in appendix XI where its complete response  is reprinted.
The department cited several actions it is taking to improve the accuracy  of war reserve requirements, support prewar planning through supply  forecasting, minimize future acquisition delays, and improve supply  distribution. However, it did not clearly identify time lines for fully  implementing most of these actions. For example, initiatives to improve  modeling and data for determining war reserves had no dates for  implementation. In some cases, the department provided tentative  schedules, such as with the fielding of the Army’s Logistics Modernization  Program to improve supply forecasting, which it expects to be in full use in  fiscal year 2007. In another instance, it provided a May 2006 deadline for  the developing an information technology plan to improve distribution, but  did not indicate when the plan’s recommendations will be implemented.  Therefore, we have modified our recommendations to require that DOD  specify when these actions will be completed.
In two instances DOD cited actions we do not consider sufficient to fulfill  our recommendations. The department stated that its annual Industrial  Capabilities Report to Congress, as well as the budget process and other  forums, provide adequate information on acquisition of critical items.  While we agree that the report provided visibility about some items, such  as body armor, it did not identify concerns about acquiring up-armored  HMMWVs and kits. Therefore, we do not believe current reporting forums  provide Congress with the consistent visibility and information needed to  make informed decisions on actions that could speed the acquisition of  critical items. In another instance, DOD cites the establishment of the  Deployment and Distribution Center in CENTCOM as its means of testing  improvements to distribution capabilities. While the center may improve  deployable logistics capability, the department did not commit to actions,  as we recommended, that would ensure through simulation and field  training that there are sufficient trained personnel and equipment to meet  the requirements of the operational plans—a problem in theater before and  during the arrival of combat forces. Therefore, we continue to believe these  recommendations have merit.
DOD did not commit to any specific action to improve transparency to  Congress of the risks associated with inadequately funding Army war  reserves. The department said this risk is already reported to Congress in  the budget process and a number of other ways. As stated in this report, the  methods cited by DOD, such as the budget documentation, do not ensure  consistent transparency by clearly stating the operational risks of  underfunding the Army war reserves. Therefore we believe our  recommendation has merit and have added a matter for congressional  consideration that suggests Congress may wish to require DOD to disclose  the risks associated with not fully funding the Army war reserve.
While DOD agreed with the intent of three recommendations, it did not  commit to any specific actions to address them. The recommendations  would (1) ensure item managers are provided operational information in a  timely manner, (2) reduce the time delay in granting increased obligation  authority to AMC and its subordinate commands, and (3) revise joint  doctrine to clarify responsibility and authority for synchronizing  distribution. We believe that these recommendations have merit and have  cited the reasons in our comments in Appendix XI.
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Defense; the Secretaries of the Army and the  Navy; the Commandant of the Marine Corps; the Commander, U.S. Central  Command; the Commander, U.S. Transportation Command; the Director of  the Defense Logistics Agency; and other interested parties.
If you or your staff members have any questions regarding this report,  please contact me at (202) 512-8365. Key contributors to this report are  listed in appendix XII.
section_title: Scope and Methodology
paragraphs: To address our objectives, we employed a case study approach, selecting  nine supply items with reported shortages as a way to assess the  availability of supplies and spare parts during Operation Iraqi Freedom  (OIF). We judgmentally selected the nine items because we believed they  presented possible shortages with operational impacts based on our prior  work on OIF logistics and other sources such as military “after-action”  reports on OIF operations, military and contractor “lessons learned”  studies, briefings, congressional testimonies, and interviews with  Department of Defense (DOD) and military service officials covering the  time period between October 2002 and September 2004. We selected the  items to encompass a variety of supply sources and users within DOD, the  Army, and the Marine Corps. The items we selected and the supply sources  for each item are shown in table 6.
To verify the existence of reported shortages and to determine their extent,  we interviewed DOD logistics officials and industrial-base suppliers. We  also collected and analyzed supply data, such as requirements, customer  demands, inventory levels, production levels, back order quantities, and  funding levels, for the period between September 2001 through September  2004 for the selected items. We considered an item to be in short supply if  the data we obtained showed that demands placed by the warfighter  exceeded availability in the supply system. To determine the impact of  shortages for the selected items, we interviewed officials in Army and  Marine Corps combat forces that were deployed in OIF and also reviewed  DOD and military services’ after-action reports, lessons learned studies,  readiness reports, and other documents. For a complete list of these  organizations, see table 7.
To determine what deficiencies contributed to identified supply shortages,  we interviewed officials and collected documentation from DOD’s supply  management organizations. On the basis of case studies, we identified  deficiencies that affected the supply of two or more of the items. We  analyzed data from DOD logistics agencies, operational units, and service  and geographic commands to evaluate the significance of these  deficiencies to DOD’s overall logistics system. We also reviewed prior GAO  reports, DOD and military services’ after-action reports, military and  contractor lessons learned studies, DOD directives and regulations, and  reports by DOD and external experts, including Accenture, the Center for  Naval Analysis, the RAND Corporation’s Arroyo Center, the Science  Applications International Corporation, and the U.S. Army Audit Agency. In  addition, we analyzed supply data for each item to identify and corroborate  deficiencies contributing to item shortages.
To determine what actions DOD has taken to improve the availability of  supplies for current and future operations, we collected data from military  service and joint command headquarters personnel to identify short- and  long-term efforts to address supply shortages. However, we did not  evaluate their potential for success. We also reviewed DOD logistics and  strategic planning documents that provide guidance on improving logistics  support for military readiness.
We assessed the reliability of the supply data we obtained by interviewing  agency officials knowledgeable about the data and corroborated it with  other information about supply shortages gathered from other DOD and  military service organizations. When data specifically for Iraq were not  available, we used worldwide data since OIF received supply priority. With  the exception of data on track shoes, we determined that the data were  sufficiently reliable for our purposes. In the case of track shoes, we  determined that the data provided by the Army’s Tank-automotive and  Armaments Command (TACOM) were not sufficiently reliable for our  purposes and did not use it. However, we were able to identify relevant  information from TACOM’s periodic reporting to describe the item’s supply  status. We determined that these data were sufficiently reliable for our  purposes. In the case of lithium batteries, the Communications-Electronics  Command (CECOM) switched database systems in July 2003. We  determined that the data from the new system were sufficiently reliable for  the purposes of showing trends and graphing, but we based our findings on  program data prior to the system change. We also identified relevant  information from other DOD sources to confirm reported shortages of  lithium batteries. The limitations of data collected for armored vehicle  track shoes and lithium batteries are included in appendixes III and VI,  respectively. We also determined that funding data were sufficiently  reliable for our purposes by comparing data received from multiple sources  within DOD.
We performed our audit from March 2004 through March 2005 in  accordance with generally accepted government auditing standards.
section_title: Assault Amphibian Vehicle Generators
subsections: section_title: Background
paragraphs: The Marine Corps’ AAV is a full-tracked landing vehicle designed to carry  up to 25 people from ship to shore and is used as an armored personnel  carrier on land. The Marine Corps used more than 550 AAVs to transport  personnel during operations in OIF. Among the critical parts of the AAV is  its generator, which provides needed electrical power (see fig. 6).
The supply and distribution of AAV generators is a shared responsibility.  The Marine Corps Logistics Command manages the supply of repairable  generators; the Defense Supply Center Columbus supplies new generators.  During OIF, the 2nd Force Service Support Group was responsible for  moving supply shipments from the port to Iraq, and the 1st Service Support  Group had responsibility for moving supplies once they reached Iraq. The  3rd Assault Amphibian Battalion, part of the 1st Marine Expeditionary  Force, was in charge of maintenance for all AAVs in theater.
section_title: Extent and Impact of Shortages
paragraphs: AAV generators were not available to the warfighter at some point between  October 2002 and September 2004. We consider generators to have been a  shortage because 84 were ordered, but only 15 were received. The Marine  Corps’ 3rd Assault Amphibian Battalion experienced a shortage of  generators needed to repair AAVs during and after major combat  operations in Iraq, according to officials. Both the Marine Corps Logistic  Command and GAO have reported that the long distances the vehicles  traveled, combined with combat conditions, placed the equivalent of  5 years of wear and tear on the vehicles over a 6- to 8-week period. As a  result of this accelerated wear and tear, the vehicles’ parts—including  generators—wore out quickly. To meet the rapid rise in demand (see fig. 7),  the battalion submitted orders for 84 generators between January and  June 2003. According to supply management data, the Defense Supply  Center Columbus sent 64 new generators and the Marine Corps Logistics  Command sent 76 repaired generators—a total of 140—to the theater  during major combat operations. However, the battalion reported that it  received only 15 generators. Officials from the 1st Force Service Support  Group in Iraq stated they did not know why they did not receive all of the  generators shipped from the Marine Corps Logistics Command and the  Defense Supply Center Columbus.
While a 3rd Assault Amphibian Battalion official stated their demand for  generators exceeded the number received in theater, they did not report  any decline in AAV operational readiness. The reported operational  readiness of AAVs in the Iraqi theater remained at about 89 percent most of  the time between February 2003 and October 2003. However, in order to  maintain this readiness rate, a 3rd Assault Amphibian Battalion official  noted that spare parts from about 40 non-operational vehicles were used to  support combat capable vehicles.
section_title: Causes of Shortages
paragraphs: Poor asset visibility in the Marine Corps’ in-theater distribution system  contributed to the shortage of generators needed to repair AAVs. Although  good asset visibility is one of the main tenets of logistics supply systems,  the Marines had difficulty maintaining visibility over the 140 generators  shipped to the theater. Marine Corps Logistics Command and Defense  Supply Center Columbus officials tracked generators to the theater, but  their visibility over these shipments ended there. Once the generators  arrived in theater, the 2nd Force Service Support Group became  responsible for maintaining visibility of supply. However, they stated they  did not have visibility of the generators shipped into Iraq. The 1st Force  Service Support Group, which directly supported units fighting in Iraq, also  indicated an inability to track requisitioned supplies. While 15 of the  generators were received by the 3rd Assault Amphibian Battalion, neither  the Marine Corps’ Force Service Support Groups nor we were able to track  the remaining 125 generators.
A contributing factor to the shortage of generators was difficulties the  Marine Corps faced in maintaining visibility over requisitioned and  warehoused spare parts because of incompatible and unstable software  and other visibility systems. Before OIF began, the Marines experienced  difficulties maintaining visibility over the generators in their in-theater  distribution center in Kuwait. Defense Supply Center Columbus officials  reported that generators were shipped to the theater to support  requirements forecasted by deploying units. However, according to an  official with the 3rd Assault Amphibian Battalion, instead of being  delivered to the units, generators were warehoused in the distribution  center. One reason for the poor asset visibility at the warehouse in  February 2003, was the failure of the warehousing software—Storage  Retrieval, Automated, Tracking, Integrated System—to work properly.  Moreover, the 1st Force Service Support Group used one version of the  Asset Tracking Logistics and Supply System (ATLASS) requisitioning  software in theater, while the 2nd Force Service Support Group used  another version, ATLASS II+. Because the two versions could not interface,  personnel of the 1st Force Service Support Group reported that they  reentered requisition information manually to move data between the  systems. Personnel at the Marine’s distribution center in Kuwait entered  requisitions into the Supported Activity Supply System, a stand-alone  inventory system. According to Marine Corps Logistics officials, neither  system could track requisitions or parts related to them through the supply  requisition process.
In addition, Marine Corps personnel were expected to use radio frequency  identification technology to help maintain asset visibility during supply  distribution. According to 2nd Force Service Support Group personnel,  Marine units in theater did not have sufficient training or equipment to read  the tags in order to support the use of this technology.
section_title: Efforts to Improve Availability
subsections: section_title: Short-term Efforts
paragraphs: When the supply system did not respond to the demand for generators,  Marine Corps personnel noted that units went outside the supply system,  through e-mail and telephone communications, to locate supplies, such as  generators, for AAVs and other equipment.
To minimize data entry errors, Marine Corps personnel developed an  electronic process to transfer data between the ATLASS and ATLASS II+  software systems. According to logistics personnel, to improve visibility  of requisitions through the system, the Marine Corps streamlined its  requisitioning process by using ATLASS to enter requisitions into the  Supported Activity Supply System and by eliminating the use of ATLASS II+  in theater.
To support greater use of radio frequency identification tags in theater, the  Marine Corps, according to the 2nd Force Service Support Group officials,  has provided training to personnel deploying to Iraq and increased the use  of the technology to improve asset visibility.
section_title: Long-term Efforts
paragraphs: According to 2nd Service Support Group officials, the Marine Corps is  evaluating an Army information system that monitors assets moving  through the supply system to determine if the Army’s system can be  adapted for Marine Corps use.
The 2nd Marine Expeditionary Force has developed a Marine Air-Ground  Task Force Distribution Center initiative. The Marines stated that the  initiative, implemented in September 2004, helps them manage the  distribution system by bringing together the Traffic Management Office,  deployed supply units, and transportation assets to replicate the in-theater  supply process. The initiative will enable them to fully replicate the supply  system, including the use of radio frequency identification tags and satellite  transponders.
section_title: Armored Vehicle Track Shoes
subsections: section_title: Background
paragraphs: During OIF, U.S. forces relied heavily on armored vehicles such as Abrams  tanks and Bradley Fighting Vehicles. For example, at the beginning of  combat operations in Iraq, the 3rd Infantry Division had a fleet of  252 Abrams tanks and 325 Bradley Fighting Vehicles drawn from Army  prepositioned stock. Troops used Abrams tanks to lead attacks in urban  areas with the support of infantry equipped with Bradley Fighting Vehicles.  Army officials said that Abrams tanks and Bradley Fighting Vehicles were  extremely effective for operations in urban terrain. Critical components of  both types of armored vehicles are the track that enables the vehicles to  move, which are composed of dozens of metal shoes (see fig. 8).
The Army’s TACOM Track and Roadwheel Group buys the track shoes that  are used on Abrams tanks and Bradley Fighting Vehicles. Goodyear is the  sole source supplier of Abrams track shoes and the major producer of  Bradley track shoes. VAREC also produces Bradley track shoes. In fiscal  year 2003, TACOM reported spending $195.2 million to purchase track  shoes for all tanks and vehicles. However, worldwide demand for Abrams  and Bradley track shoes totaled $257.4 million. Of the $195.2 million,  TACOM reportedly spent $98.6 million on Abrams track shoes and  $52.4 million on Bradley track shoes.
We were unable to obtain reliable data on forecasted requirements,  demands, back orders, and inventory for track shoes from TACOM’s Track  and Roadwheel Group. The group’s officials told us that because the  models and studies used to compute the data can produce inaccurate  results, they could not validate the data. As a result, we were unable to  document the extent of shortages based on these data. However, group  officials were able to provide us with data used to inform AMC on the  status of track shoe shortages. According to TACOM, these data are based  on information provided by units in theater and best represent true  demand. We corroborated this secondary data with classified data and used  it in our analysis.
section_title: Extent and Impact of Shortages
paragraphs: Track shoes for the Abrams tanks and Bradley Fighting Vehicles were not  available to the warfighter at some time between October 2002 and  September 2004. We consider this item to have a shortage because demand  exceeded the amount of inventory available to meet the needs of the  war fighters.
U.S. forces and logistics personnel reported critical shortages of track  shoes for Abrams tanks and Bradley Fighting Vehicles during OIF, and  these shortages negatively affected their mission. In undertaking their  mission, U.S. forces subjected these tanks and vehicles to the equivalent of  3 years of high-intensity training during major combat operations in Iraq.  Because of the extensive mileage placed on the tanks and Bradley  vehicles—exacerbated by bad road conditions and extreme heat—vehicle  parts, particularly track shoes, wore out quickly.
Although TACOM was able to meet the track shoe demands of units  preparing to deploy as well as those already deployed in OIF, it began to  experience difficulties in providing track shoes to units in theater around  April 2003. The demand for Abrams tank and Bradley Fighting Vehicle track  shoes in May 2003 was 5 times the March 2003 forecasted demand  (see table 8). To meet the surge in demand for Abrams track shoes,  TACOM negotiated with Goodyear to increase the production rate from  15,000 Abrams track shoes per month (from the normal peacetime rate  of 10,000 per month) to 17,000 per month for December 2002, then to  20,000 per month in May 2003, and to 25,000 per month in July 2003.  However, these increases in production still were not sufficient to meet  OIF demands. In May 2003, for example, the actual demand for Abrams  track shoes rose to more than 55,000.
As a result of track shoe shortages, some Abrams tanks and Bradley  Fighting Vehicles could not operate during the summer months in 2003. For  example, the 4th Infantry Division reported it could not obtain sufficient  quantities of track shoes to meet operational needs. At one point during  post-combat operations, the division had an operational requirement for  23,626 Abrams track shoes, of which 8,002 were shipped, but only 1,028  were received. To support the Bradley Fighting Vehicles, the division had  an operational requirement of 29,911 track shoes, of which 4,591 were  shipped, but only 744 were received. As a result of its inability to obtain  more track shoes and other suspension parts, the 4th Infantry Division  reported its readiness rates for both types of combat vehicles deteriorated.  For example, one of its brigades reported that 11 of its 44 Abrams tanks  were unavailable during post combat operations because of the lack of  track shoes.
Track shoe shortages also negatively impacted the 3rd Infantry Division.  On June 11, 2003, the division reported that of the 185 Abrams tanks it had  on hand, 111 (60 percent) were deemed “non-mission capable due to  supply.” For the 237 Bradley Fighting Vehicles it had on hand, 159  (67 percent) were deemed non-mission capable due to supply. According to  3rd Infantry Division officials, the reason tanks and vehicles were  unavailable was because replacement track shoes were not available to  the units. For example, between April 16-18, 2003, one divisional  supply support activities in Kuwait had 22,074 Abrams track shoes and  18,762 Bradley track shoes on back order.
To alleviate the impact of track shoe shortages on Bradley Fighting Vehicle  readiness, theater commanders wanted to bring an additional 1,407 up- armored HMMWVs into theater. However, as detailed in appendix X, the  procurement of additional up-armored HMMWVs was also problematic.
section_title: Causes of Shortages
paragraphs: Inaccurate war reserves requirements, inaccurate forecasted requirements,  and erratic funding affected TACOM’s ability to provide track shoes.
subsections: section_title: Inaccurate War Reserve Requirements
paragraphs: Inaccurate war reserves requirements negatively affected TACOM’s ability  to provide track shoes to units in theater at the beginning of OIF. Governed  by Army Regulation 710-1, war reserves are intended to provide the Army  with interim support to sustain operations until it can be resupplied with  materiel from the industrial base. For TACOM, the war reserve requirement  for 3,635 Abrams track shoes and 1,800 Bradley track shoes identified in  September 2001 was not enough to support OIF demands. Although the  war reserve requirement increased in December 2002, the new requirement  for 5,230 Abrams track shoes and 5,626 Bradley track shoes was still not  enough to meet demands.
To more accurately reflect track shoe usage in OIF, TACOM officials, in  December 2003, increased the war reserves requirements to 32,686 Abrams  track shoes and 34,864 Bradley track shoes. TACOM officials made the  change manually rather than using the Army War Reserve Automated  Process, which was last run in fiscal year 1999. Since then, the number and  type of vehicles have changed, but the official process has not been  performed again to update the requirements. TACOM officials have been  waiting for input based on the defense planning guidance from the  Department of the Army to initiate a new process. At the time of our  review, they were not certain when they would receive the guidance. Until  the model is run, TACOM officials will continue to make manual changes to  war reserves requirements.
In addition, both we and Accenture have questioned the validity of the  Army’s war reserve requirements. In a 2001 report, we found that war  reserve requirements could be inaccurate because the calculations were  not updated to reflect new consumption rates; requirements determination  methodology might not be consistent with planned battlefield maintenance  practices; and requirements were based on internal estimates of what the  industrial-base could provide rather than on well-defined industry data  itself. A 2003 study by Accenture concluded that part of the reason for the  low war reserve requirements was that the forecasting process is labor  intensive, time consuming, and suffers from inaccurate input data.
section_title: Inaccurate Forecasted Requirements
paragraphs: In fiscal year 2003, TACOM underestimated the amount of Abrams and  Bradley track shoes needed worldwide. Although TACOM revised its  requirements at the end of each quarter, its estimates for Abrams and  Bradley track shoes still fell short.
For example, in April 2003 the forecasted monthly requirement for Abrams  track shoes was 11,125, which was less than half of the actual demand of  23,462 shoes. The track shoe budget forecasts further illustrate the  discrepancy between forecasted and actual requirements. Based on its  budget-forecasting tool, TACOM forecasted it would need $46.8 million for  Abrams track shoe purchases for fiscal year 2003. At the end of the year,  actual demands for Abrams track shoe totaled $194.9 million—a  416 percent increase. For Bradley track shoes, the group forecasted it  would need $17.8 million in fiscal year 2003 to meet customer demands.  However, actual demands totaled $62.6 million—a 351 percent increase— by the end of the fiscal year.
Even if TACOM’s revised track shoe estimates had been accurate, it would  have been too late to meet the summer 2003 demand. In order to have  supplies on hand when demands are received, item managers need to  award contracts allowing for sufficient procurement lead-time. TACOM  officials explained that track shoe manufacturers need an average of 4 to  6 months to produce and deliver track shoes once they receive a contract.  The high demands for track shoes in the late spring and summer of 2003  were not forecasted in October 2002, which would have been the time  when contracts should have been awarded so that TACOM could  adequately meet customer needs.
The failure to forecast the high demand experienced during the  early months of OIF was partly due to the requirements forecasting model  used and to the lack of information and guidance provided to TACOM. In its  conclusions, the Accenture study on track shoe shortages found that the  requirements forecasting model failed to accurately forecast future  demands because the model uses a simple moving average based on  24 months of historical demand that does not support dynamic changes in  item usage. This meant that large increases in demand during the last  couple of months of the 24-month period would not result in a  corresponding increase in the forecasted demand. In addition, TACOM  officials stated they did not receive adequate planning guidance on  operational plans from AMC prior to the onset of combat operations that  they could incorporate into their forecasts for track shoes. Consequently,  TACOM determined the requirements based on the model and on the item  managers’ expertise and knowledge of the item, as allowed under Army  Regulation 710-1.
Subsequent requirements throughout fiscal year 2003 also were  understated. TACOM officials reported that although they regularly  requested information about the track shoes’ usage and durability, which  would have helped them better gauge actual demand, they received limited  information and input from units in the field. As OIF continued throughout  2003, TACOM held teleconferences with AMC Logistics Support Element  representatives and with units in theater to obtain updated information  about item usage.
section_title: Erratic Funding for Track Shoe Production
paragraphs: During fiscal year 2003, TACOM did not receive sufficient obligation  authority in time to buy track shoes to meet growing demands. TACOM’s  total funding requirements in fiscal year 2003 amounted to $257.4 million— $194.9 million for Abrams track shoes and $62.5 million for Bradley track  shoes. TACOM officials told us that they could not buy sufficient track  shoes because they had received only $216 million in obligation authority  to buy all of the items they managed. However, TACOM spent only  $151.0 million on track shoes—$98.6 million for Abrams tanks and  $52.4 million for Bradley Fighting Vehicles.
In addition to insufficient obligation authority, the uncertainty of the  funding flow affected the manufacturer’s ability to produce track shoes. A  primary producer of track shoes for TACOM, Goodyear, was in danger of  closing down its track shoe production plant in April 2003 because of a lack  of contracts. TACOM officials stated that they could not award contracts  consistently because they did not know how much obligation authority  they would receive or when the next allotment would arrive. Because of  the acute shortage of track shoes, TACOM immediately awarded contracts  to Goodyear whenever obligation authority became available. As a result of  accelerated deliveries, Goodyear reported that it had a very low level of  remaining workload and was in danger of closing down the track shoe  production plant unless it received additional contracts.
According to TACOM officials, additional obligation authority was  aggressively requested throughout fiscal year 2003 to support purchases of  track shoes as well as other supply items. As an item critical to mission  success, officials stated that track shoes usually receive more funding than  other commodities managed by TACOM; however, releases of additional  obligation authority were delayed in some instances. TACOM officials  stated that when they need additional obligation authority, they request it  from AMC, which then requests it from Army headquarters. These requests  must be validated and justified (based on past sales) at each level before  the Office of the Under Secretary Defense (Comptroller) approves for the  release of additional obligation authority. TACOM officials expressed  frustration with the process and complained that both AMC and Army  Headquarters were not aggressively pursuing the issue and did not fully  grasp the magnitude of impact to units in theater because of the lack of  obligation authority provided to item managers.
section_title: Efforts to Improve Availability
subsections: section_title: Short-term Efforts
paragraphs: To address inaccuracies in war reserve requirements, TACOM has manually  updated its requirements levels for track shoes, rather than wait for AMC to  implement the next Army War Reserve Automated Process.
To overcome inaccuracies in the requirements forecasting model, TACOM  depended on item managers’ judgment and expertise to determine demand  more accurately. Item managers worked with available information  provided by AMC and with input from units in theater. In addition, priority  was given to the Iraqi theater of operations and available track shoe  production was shipped to support units in Iraq. TACOM worked with  theater commanders to expedite and prioritize shipments of track shoes.
To address funding shortfalls, TACOM continually requested that any  additional obligation authority be made available to buy track shoes during  fiscal year 2003. Because track shoes were considered critical mission- essential items and their shortage greatly impacted theater operations,  officials from the Track and Roadwheel Group said that they usually  received more funding and attention than other supply groups within  TACOM. For example, in June 2003, the Track and Roadwheel Group  received $64 million that was specifically meant to prevent Goodyear from  closing down its track shoe production plant. In August 2003, TACOM  received an additional $70 million for track shoe purchases.
To improve track shoe availability during OIF, the Army made a $5.2 million  investment in Goodyear production facilities to meet the surge  requirements and to sustain the viability of the track shoe supplier.
section_title: Long-term Efforts
paragraphs: At the time of this review, TACOM officials did not identify any long-term  efforts to correct problems identified with war reserves, requirements, or  funding shortfalls.
section_title: Interceptor Body Armor
subsections: section_title: Background
paragraphs: The U.S. military’s new Interceptor body armor is composed of  two primary components: an Outer Tactical Vest and two Small Arms  Protective Insert plates (see fig. 9). The Outer Tactical Vest consists of a  combination of a soft fabric vest and para-aramid fiber panels that provide  protection against shrapnel and 9 mm ammunition. The plates consist of a  combination of ceramic tiles and polyethylene fiber  that, when inserted  into the vest, provide protection against rifle rounds up to 7.62 mm. The  vest accepts two plates, one for the front and one for the back. Additional  attachments can increase protection.
The new body armor provides improved protection and weigh less than the  older version—the Personnel Armor System for Ground Troops, or “flak”  vest—which protects only against shrapnel. The new body armor weighs  16.4 pounds, while the older vest weighs 25.1 pounds.
The Army planned to issue the Interceptor body armor to U.S. forces over  an 8-year period between 2000 and 2007. It began to distribute the armor to  military personnel during Operation Enduring Freedom. On the basis of the  armor’s effectiveness the Army decided to accelerate its fielding for OIF.
DLA’s Defense Supply Center Philadelphia manages the Interceptor body  armor for the Army. The Marine Corps has its own version of the body  armor that is constructed with the same materials as the Army version.  The Marine Corps Systems Command and the U.S. Army Robert Morris  Acquisition Center manage it for the Marine Corps. Both services rely on  the same manufacturers.
section_title: Extent and Impact of Shortages
paragraphs: Interceptor body armor was not available in sufficient quantities to  U.S. military forces in Iraq sometime between October 2002 and  September 2004. We consider this item to have a shortage because demand  exceeded the production output necessary to meet the needs of the  war fighter. While there were shortages of Interceptor body armor during  OIF, Coalition Forces Land Component Command officials stated that  military personnel deployed with either the vest component of the new  body armor or the old body armor. CENTCOM officials stated that all  personnel in Iraq had the new armor by January 2004; 8 months after  combat operations were declared over.
The new body armor was initially intended for limited numbers of  personnel, such as dismounted infantry, however, this changed during OIF.  In May 2003, the Army changed the basis of issue to include every soldier in  Iraq. Then in October 2003, CENTCOM further expanded issuance of the  body armor to include all U.S. military and DOD civilian personnel working  within CENTCOM’s area of responsibility including Iraq, Kuwait, and  Afghanistan.
Demand for the vest component part of Interceptor body armor increased  rapidly both at the beginning of OIF, when troops began combat operations,  and again in late 2003 during stabilization operations. Worldwide quarterly  demand for vests rose from 8,593 in December 2002 to 77,052 in  March 2003—the onset of combat operations. The demand for vests  continued to spike upward topping out at 210,783 in December 2003. The  number of back orders also rapidly increased over this period of time  (see fig. 10). By December 2003 the worldwide number of back orders  reached 328,023 with DLA mandating that OIF requisitions receive priority.
In contrast, during December 2003 the number of vests actually produced  to meet demand was only 23,900.
Similarly, the demand for plates increased with the onset of combat  operations and again during stabilization operations in late 2003. The  demand for plates increased more than ten-fold, from a quarterly demand  of 9,586 plates in December 2002 to a quarterly demand of 108,808 plates in  March 2003 at the beginning of OIF. As figure 11 shows, with the change in  the basis of issue for the Interceptor body armor in October 2003, the  demand for plates rose rapidly again, peaking at 478,541 plates in  December 2003. In addition, during late 2003, the number of back orders  for plates also increased rapidly. By November 2003, the number of  worldwide back orders peaked at 597,739 plates, with DLA giving OIF  requisitions priority. In contrast, during this month, production output  totaled only 40,495 plates.
Military officials expressed serious concerns over the shortage of  Interceptor body armor. Army officials stated that soldiers’ morale declined  as units waited for the armor to reach theater. Because of the shortages,  CENTCOM officials stated they prioritized the issue of the new body armor  to those who were most vulnerable. In addition, there was a lack of body  armor among support personnel, such as the Army’s 377th Theater Support  Command, while insurgents were attacking and interdicting supply routes  in Iraq. Because of the shortages, many individuals bought body armor  with personal funds. The Congressional Budget Office estimated  (1) that as many as 10,000 personnel purchased vests, (2) as many as  20,000 purchased plates with personal funds, and (3) the total cost to  reimburse them would be $16 million in 2005.
section_title: Causes of Shortages
paragraphs: Temporary shortages of the Interceptor body armor occurred because of  acquisition delays related to lack of key materials and distribution  problems in theater.
subsections: section_title: Lack of Critical Materials Delayed Acquisition
paragraphs: A lack of sufficient quantities of key materials used to make vests and  plates delayed acquisition to meet the increasing demand for Interceptor  body armor. According to DLA officials, shortages of critical materials still  limit worldwide production to approximately 35,000 vests and 50,000 plates  per month. A production lead-time of three months has also limited the  industrial-base’s capacity to accelerate its production levels to meet  increasing demand.
DLA officials stated that the production of vests and plates was impaired by  a limited availability of critical materials. The shortfall of vests was due to a  lack of Kevlar, a para-aramid fiber that was in short supply. DuPont  Chemicals is the only domestic producer of the para-aramid fiber panels  used in the vests. However, an exception under the Defense Federal  Acquisition Regulation Supplement allowed vest contractors to use  Twaron fiber panels manufactured in the Netherlands as a replacement for  Kevlar fiber panels.
The shortfall in ceramic plates was due to insufficient quantities of two  materials needed to produce them. The initial shortfall was due to the  limited availability of SpectraShield. Until April 2004, Honeywell was the  only domestic producer of SpectraShield, and it had other competing  commercial requirements for the material. Plate producers responded to  the limited availability of SpectraShield by manufacturing modified plates  that replaced SpectraShield with Kevlar and other para-aramid fiber  materials. While these plates met ballistic protection requirements, they  weighed a half pound more and required a service waiver for acceptance.
In April 2004, DSM Dyneema, a foreign firm that produces Dyneema, a  SpectraShield-equivalent, opened a production facility in the U.S. and  began to produce and sell the product. SpectraShield and Dyneema are the  only materials that meet the services’ ballistic protection and weight  requirements for Interceptor body armor. Due to their limited availability,  both materials are under Defense Priorities and Allocation System control.  Plate production was later constrained by the limited availability of  ceramic tiles. According to DLA, current production output is subject to  further increase as DSM Dyneema increases its Dyneema production and  additional ceramic tiles are qualified as meeting specification  requirements.
section_title: Accelerated Fielding Affected Distribution
paragraphs: Attempts to accelerate fielding of the new body armor met with some  success, but also caused problems. According to an Army Office of the  Inspector General report, accelerated fielding resulted in supplying body  armor to soldiers at a much faster pace than normal. The armor was  distributed in some cases virtually directly from the factory to the  warfighter. The report stated that the accelerated fielding did not allow  time for the project manager to coordinate with units and allow them to  establish sufficient accountability in theater, as required by Army  regulations. However, lack of in-transit visibility, inaccurate reporting of  on-hand quantities, lag time in recording receipt of plates, and other  accounting errors resulted in temporary loss of visibility of between 5,000  and 30,000 sets of plates.
section_title: Efforts to Improve Availability
subsections: section_title: Short-term Efforts
paragraphs: To meet the surging demand for plates, DOD used authority under the  Defense Production Act to allocate production of SpectraShield. More  specifically, the Office of the Deputy Under Secretary of Defense  (Industrial Policy) used its authority under the Defense Priorities and  Allocation System to direct Honeywell to accelerate deliveries of  SpectraShield in support of OIF on six occasions in 2003. According to the  Acting Under Secretary of Defense (Acquisition, Technology, and  Logistics), Honeywell did this at the expense of its commercial orders. To  increase industrial-base production capacity, DLA stated that it increased  its number of vest suppliers from 1 to 4; plate manufacturers from 3 to 8  (including manufacturers of overweight plates); and ceramic tile suppliers  from 4 to 10 (including suppliers of overweight tiles).
section_title: Long-term Efforts
paragraphs: DLA has recommended that it have management of Interceptor body armor  requirements for all of the services. It has recommended that the services  establish war reserve stock levels for the new body armor to mitigate  lead-time in industrial-base production. It has also requested the authority  to purchase and maintain an inventory of materials necessary for  producing vests and plates as well as contract with vendors who have the  capacity to use such stored materials during times of high demand.
section_title: Joint Service Lightweight Integrated Suit Technology Suits
subsections: section_title: Background
paragraphs: JSLIST is a protective clothing ensemble that includes a lightweight  chemical-biological protective suit, multi-purpose over-boots, and gloves  (see fig. 12). When combined with a chemical protective mask, JSLIST  provides protection from chemical and biological agents. The suit can be  worn over a uniform and body armor. Once it is removed from the  packages, the suit can provide protection for 45 continuous days. However,  once exposed to an agent, it must be replaced within 24 hours. The sealed  suit package has a shelf life of 14 years. The U.S. military began fielding  JSLIST in November 2002. Before then, the Army relied on the Battle Dress  Overgarment and the Marine Corps depended on the Saratoga suit.
Although the military services manage their own inventories of JSLIST  suits, DLA serves as the contracting agent. The largest producer is the  National Institute for the Severely Handicapped. The primary  subcontractor, Blücher, a German company, makes the suit’s filter fabric  liner. A critical component of the liner is the carbon beads, which absorb  chemical and biological agents. The carbon beads are produced for  Blücher—through a sole source contract—by a Japanese company, Kureha.
section_title: Extent and Impact of Perceived Shortages during OIF
paragraphs: JSLIST was perceived to not be available for the warfighter between  October 2002 and September 2004; however, we do not consider this a  shortage because all personnel in theater were issued a JSLIST or Saratoga  suit and the required spare by February 22, 2003. Some Army officials in  theater, as well as National Guard officials in the U.S., indicated a shortage  of JSLIST; however our analysis indicated no actual shortage. Despite this  perception of a shortage, neither the Army nor Marine Corps indicated any  impact on operational capabilities of deployed units. The Army began to  field additional JSLIST suits to units deployed in theater in November 2002,  in response to a congressional request. By February 22, 2003, the Army’s  Central Command reported that every Army unit had two suits for every  soldier in theater; moreover, the theater supply base had one spare suit for  every soldier. Similarly, the Marine Corps reported it had sufficient stock  during OIF to issue one Saratoga suit and hold two additional suits for  each Marine.
section_title: Reasons for Perceived Shortages
paragraphs: The perception of a JSLIST shortage emerged in late 2002 and early 2003  because of a change in requirements, poor asset visibility, and concerns  about production capacity.
subsections: section_title: Requirements Changed in Fall 2002
paragraphs: Changes in requirements increased the demand for JSLIST. Before  October 2002, the Army’s and Marine Corps’ requirements called for one  chemical-biological protective suit and one backup for each soldier or  marine in theater. To meet this requirement, the services planned to use the  older suits (e.g., the Army’s Battle Dress Overgarment and the Marine’s  Saratoga suit) and eventually supplemented them with the newer JSLIST.  In October 2002, however, the House Committee on Government Reform  requested that DOD direct the services to issue JSLIST to all U.S. forces  stationed in the Middle East, thereby increasing the servicewide demand  for JSLIST. According to Marine Corps officials, this request expanded the  number of personnel who needed suits to include not only DOD military  personnel but also DOD civilian contractors and members of other external  organizations. Although Marine Corps officials state they planned to  provide protective suits for non-military personnel before the  congressional request, and had acquired and stocked 400 sets of Saratoga  suits for this eventuality, they found more personnel than expected who  needed the protective gear. Although the services were required to provide  suits for all personnel in theater, there was no DOD policy to guide the  procurement of these items.
Although the availability of JSLIST was sufficient, the sizes of the available  suits were a problem for some soldiers. Initial orders for JSLIST did not  take into account the fact that the suits would be worn over body armor  and, thus, larger sizes were needed. According to DLA officials, units also  did not consider that some National Guardsmen and reservists would need  larger suits than those typically stocked to support the active-duty forces.
section_title: Lack of Asset Visibility
paragraphs: In some cases, the poor visibility over National Guard and Army Reserve  supply inventories affected the perceived nonavailability of JSLIST. For  example, Army officials noted that some National Guard and reserve units  could not promptly find a sufficient number of JSLIST in their inventory to  meet requirements. Their inventory systems did not provide visibility over  inventory in different locations. As a result, Army officials said the  deployment of National Guard and reservist personnel was delayed until a  sufficient number of JSLIST were located within their inventory.
section_title: Production Concerns
paragraphs: Although DLA reported operational unit concerns about the production of  carbon beads, the agency was able to meet suit demand during OIF.  Because of the single source subcontractor’s limited ability to produce  carbon beads, the total monthly production was limited to 70,000 to  80,000 suits. DLA officials stated this level of production was sufficient to  meet JSLIST requirements and prior GAO analysis supports their claim.  However, DLA officials noted they are concerned about their ability to  meet the services’ current requirement to replace the 400,000 to 500,000  suits issued in OIF.
section_title: Efforts to Improve Availability
subsections: section_title: Short-term Efforts
paragraphs: To meet the additional requirement to supply DOD civilian contractors and  other non-military personnel with JSLIST, Army officials noted that suits  were shipped directly to the theater for issue. In addition, Marine Corps  officials reported drawing on their prepositioned war reserve stocks to  meet the additional requirement.
To meet the demand for larger sizes, the Director of DLA testified that DLA  provided 2,000 custom-made suits for personnel outside the original size  range. Moreover, Army officials said that Federal Express was used to  expedite the shipment of these suits.
section_title: Long-term Efforts
paragraphs: To meet suit requirements for all personnel in theater, Army officials report  that DLA has introduced four larger suit sizes into its inventory.
As part of an effort to improve asset visibility, the Department of the Army  has implemented an Individual Protective Equipment Centralized  Management Initiative designed to provide units with visibility and  shelf-life management of inventory in the United States.
To increase production capability, DLA officials stated that they worked in  conjunction with DOD to increase the production capability of the existing  industrial base and to develop new protective suits for future use. For  example, DLA officials stated that Blücher is conducting research to  develop an alternative carbon bead in order to reduce reliance on a sole  source producer. In addition, they announced that in June 2004, the JSLIST  Additional Source Qualification program at Quantico, Virginia, accepted  the use of a new bead from Blücher, which will be available for future suits.
section_title: BA-5590 and BA-5390 Lithium Batteries
subsections: section_title: Background
paragraphs: BA-5590 and BA-5390 nonrechargeable lithium batteries provide a portable  power source for nearly 60 critical military communication and electronic  systems, including the Single Channel Ground and Airborne Radio System,  the Javelin missile guidance system, and the KY-57 transmission security  device. U.S. troops depend on these systems to communicate, acquire  targets, and gain situational awareness on the battlefield. The BA-5590 was  developed specifically for military use more than a decade ago and,  according to military officials, is the most widely used communications  battery in the supply system (see fig. 13). The BA-5390 served as a  substitute battery when shortages of BA-5590s occurred during OIF. Prior  to the start of Operation Enduring Freedom, the Army was moving to a  rechargeable battery at the direction of the Environmental Protection  Agency. Funding was provided for the environmentally safe battery, not the  disposable lithium battery. However, these disposable batteries are well- adapted to fast-paced mobile operations because they do not have to be  recharged. the military and in early 2003 Eagle-Picher Technologies began delivering  BA-5590s to augment SAFT’s output.
Before and during OIF, CECOM’s Logistics and Readiness Center bought  and managed DOD’s family of lithium batteries. As of September 30, 2004,  this responsibility was transferred to DLA’s Defense Supply Center  Richmond. CECOM, however, will continue to be responsible for technical  issues related to lithium batteries.
During the time period covered by our review, CECOM used several  methods to derive inventory management data. Before July 2003, CECOM  used the old Commodity Command Standard System. We consider data  derived from this legacy system to be sufficiently reliable for our purposes.  In July 2003, CECOM converted to a new database, the Logistics  Modernization Program, which encountered stabilization and data clean-up  issues. To overcome these issues, CECOM item managers obtained  inventory management information from the Logistics Modernization  Program as well as manual computations. While these data are sufficiently  reliable for the purpose of showing trends and graphs, our findings rely  primarily on data from the Commodity Command Standard System from  the period before July 2003.
section_title: Extent and Impact of Shortages
paragraphs: Nonrechargeable lithium batteries, specifically BA-5590s and BA-5390s,  were available in limited quantities to the warfighter between October 2002  and September 2004. We consider this to be a shortage because the  monthly demand and back orders for these batteries exceeded the monthly  inventory that CECOM had available to supply U.S. forces in OIF.
While demand for nonrechargeable lithium batteries increased  dramatically after September 11, 2001, it quickly outpaced the available  supply, as U.S. troops began preparing for combat operations in Iraq.  Demand rose from a peacetime average of below 20,000 batteries per  month before September 2001 to an average of 38,313 batteries per month  after the United States launched the global war on terrorism and Operation  Enduring Freedom in Afghanistan. In January 2003, as thousands of troops  were deploying to the Gulf region, the number of batteries requisitioned  surged to 140,000 and, in April 2003 during major combat operations, the  number peaked at 330,600 (see fig. 14). When major combat operations  were declared over in May 2003, demand began to fall. Since the fall of  2003, the demand has leveled off to an average of about 62,000 per month.
U.S. troops encountered severe shortages of nonrechargeable lithium  batteries because inventory levels (including on-hand and war reserve  stocks) were low. As figure 14 shows, inventory levels remained on average  below 15,000 batteries during 2002 and into early 2003, increasing only in  May 2003 after major combat operations were declared over and demand  began to decline. At the same time, the number of back-ordered batteries  grew to about 250,000 in January 2003 and, by May 2003, had nearly  quadrupled to 900,000. As demand fell and requisitions were filled, the  number of back orders began to drop in the summer of 2003 and, by the end  of 2003, inventory levels exceeded back orders.
Army and Marine Corps units faced critically low supplies of BA-5590s and  BA-5390s during the spring of 2003. On March 24, 2003, a few days after  combat operations began, the Marines reported they were down to less  than a 2-day supply (rather than the required 30-day, on-hand safety level).  In early April, Marine officials projected that, given existing worldwide  inventories, production capacity, and consumption rates, they would  experience degraded communications capacity by early May if the war  continued at the same pace. To mitigate the shortages, the military took  some actions, including requiring stationary units to use alternative power  sources (e.g., rechargeable batteries) and instituting a weekly Materiel  Priority Allocation Board meeting to apportion batteries to combat units  that needed them the most.
section_title: Causes of the Shortages
paragraphs: The critical shortages of BA-5590s and BA-5390s during OIF resulted from  four related conditions: inadequate war reserve requirements, inaccurate  forecasted requirements, lack of full-funding, and acquisition delays due to  industrial-base limitations.
subsections: section_title: Inadequate War Reserve Requirements
paragraphs: The Army’s war reserve requirements for nonrechargeable lithium batteries  were not sufficient to support initial operations. According to Army  Regulation 710-1, the war reserve is intended to provide the Army with  interim support to sustain operations until it can be resupplied with  material from the industrial base. According to CECOM officials, before  OIF, the war reserve requirement for BA-5590s was set at about 180,000 batteries to sustain the first 45 days of war. However, this amount  was considerably below the actual demand of nearly 620,000 batteries  recorded during March and April 2003. Officials stated that the low pre-war  requirement was generated by the Army’s war reserve model, which was  last updated in 1999; moreover, this model used inaccurate battery failure  rates and did not include all of the equipment that used nonrechargeable  lithium batteries. Based on their experience during OIF, CECOM officials  have increased the current Army and Marine Corps war reserve  requirement for BA-5590s and BA-5390s to more than 1.5 million total  batteries, an amount equal to OIF’s average monthly demand of  250,000 batteries times 6 months of continuous combat operations.  War reserve planners expected inventories to reach the 1.5 million mark by  February 2005.
section_title: Inaccurate Forecasted Requirements
paragraphs: In addition to low war reserves, CECOM’s official monthly forecasted  requirements for nonrechargeable lithium batteries were far below those  needed to meet a wartime contingency. Forecasted requirements are  developed primarily on the basis of actual demand data for an item from  the preceding months and are used to support funding requests to  purchase additional supplies. In 2002, CECOM increased its monthly  forecasted requirements from a monthly peacetime norm of 24,000  batteries to a monthly average of 36,000 in response to the global war on  terrorism (see fig. 15). These monthly requirements grew to nearly 60,000  in March 2003 when combat operations began in Iraq, but this number was  only one-fifth of the actual demand recorded that spring. Forecasted  requirements continued to lag behind demand until mid-summer when they  caught up. According to officials from Central Command Joint Logistics,  the pre-OIF monthly requirement figures were low because some  combatant commanders did not submit their requirements and estimates  did not reflect all battery usage; as a result, officials said that calculating  requirements was purely guesswork.
In the summer of 2002, CECOM and AMC officials developed a more  realistic contingency requirement for nonrechargeable lithium batteries.  Using information from the Operation Plan and other sources, they  forecasted a need for 300,000 to 325,000 batteries per month.
As figure 15 shows, this estimate closely paralleled the actual demand of  330,000 at the height of major combat operations in April 2003. CECOM  officials presented this requirement to AMC and the Joint Materiel  Priorities and Allocation Board in the fall of 2002 to bolster their request for  $38.2 million of additional obligation authority to ramp up BA-5590 and  BA-5390 production. They received the funding in early December 2002.
section_title: Army Decisions Did Not Provide Full Funding for Batteries
paragraphs: The Army’s risk-based decision not to fund full requirements for CECOM,  particularly lithium nonrechargeable batteries, during several years prior to  OIF compounded the shortage problem. As table 9 shows, CECOM had  unfunded requirements ranging from $85 million to $419 million for the  3 fiscal years up to and including OIF. In fiscal year 2003, for example,  CECOM identified requirements for the command of nearly $1.5 billion, but  received less than $1.1 billion in obligation authority for the year, resulting  in an unfunded requirement of $419 million, or more than 28 percent of the  total amount required.
The command’s unfunded requirements specifically for BA-5590 lithium  batteries varied from a high of $4.2 million in fiscal year 2001 to a low of  $1.2 million in fiscal year 2002. However, the low figure for fiscal year 2002  occurred because AMC directed CECOM to spend $11.5 million to  specifically support its BA-5590 requirement. Our analysis shows that even  if CECOM had been able to fund 100 percent of its BA-5590 battery  requirement in fiscal year 2002, it would not have been able to meet the  growing demands from the global war on terrorism. A fully funded  requirement ($22.6 million) would have provided about 33,000 batteries per  month, and actual demand exceeded that for most of the year.
section_title: Acquisition Delays Due to Industrial-Base Limitations
paragraphs: The surge in demand for nonrechargeable lithium batteries exceeded the  amount that the industrial base could produce, thereby delaying  acquisition. Before OIF, CECOM had contracted with only one qualified  producer, SAFT, to make BA-5590s. To support the global war on terrorism,  SAFT doubled its production from 32,000 batteries per month in October  2001 to 60,000 per month in September 2002. After receiving $38.2 million  in additional obligation authority in December 2002, CECOM increased its  orders for BA-5590s with SAFT and added BA-5590s to its contract with  Eagle-Picher. It also contracted with Ultralife to make a substitute battery,  the BA-5390. According to CECOM officials, both batteries have a 6-month  production lead time. Despite CECOM’s efforts, the long lead-time  precluded the ability of these three producers to meet the surge in demand  during major combat operations. Army officials stated that if they had  received funding earlier they would have been able to mitigate the effects  of this long lead time. As figure 15 shows, while production output  increased to over 100,000 batteries per month in the spring of 2003, it did  not approach 200,000 until the late summer of 2003 or reach its peak of  250,000 until early in 2004.
A recent study identified a limited industrial base as the primary cause  of the BA-5590 battery shortage. A March 2004 Science Applications  International Corporation report concluded that battery shortages and lack  of availability were an industrial-base challenge. The supplier was not  able to increase production to meet the unforecasted six-fold increase  in demand.
section_title: Efforts to Improve Availability
subsections: section_title: Short-term Efforts
paragraphs: To overcome production constraints, CECOM negotiated with two other  producers, in addition to SAFT, to manufacture BA-5590s and BA-5390s. It  also worked with the three producers to augment battery production by  going to a 24/7 schedule. In addition to expedite shipments, CECOM had  SAFT bypass the depot and ship batteries directly to Charleston Air Force  Base for air shipment to the theater. According to CECOM, a capital  investment of $5 million was made in the three producers in May 2003 to  expand their production capacity.
DOD took a number of actions to get the limited supply of nonrechargeable  batteries to units that needed them most. According to CENTCOM, the  Joint Chiefs of Staff issued a directive to send all available BA-5590s and  BA-5390s to CENTCOM’s area of responsibility until June 2003. The Joint  Staff also put these batteries on the “critical few list,” which focused  attention on improving the availability of specific items the services and  geographic combatant commands reported as critical to their worldwide  operations. CECOM and Marine Corps officials said they shifted available  batteries from military installations worldwide and also bought batteries on  the commercial market. The Army, Marines, and Coalition Forces Land  Component Command also directed troops, especially those in rear units,  to use rechargeable batteries when possible. In addition, the Army required  soldiers to use rechargeable batteries for garrison duty and training and to  maximize their use during peacekeeping operations. Marine combat units  were instructed to do everything possible to reduce nonrechargeable  battery consumption rates. Moreover, Coalition Forces Land Component  Command was appointed the theater’s item manager for batteries, with  responsibility for prioritizing and releasing batteries to units.
section_title: Long-term Efforts
paragraphs: To correct problems with war reserve requirements, CECOM officials said  they set the current war reserve requirement for BA-5590s and BA-5390s to  more than 1.5 million batteries to better reflect the experiences in OIF. This  requirement was expected to be filled by February 2005.
To improve battery availability, the Deputy Under Secretary of Defense for  Logistics and Materiel Readiness, in January 2004, directed the transfer of  battery inventory management from CECOM to DLA as of September 30,  2004.
In terms of technological efforts, CECOM officials said they are developing  newer, lighter-weight rechargeable batteries that could be powered by solar  panels or other energy sources while troops are on the move to reduce  dependence on disposable batteries.
section_title: Marine Corps Helicopter Rotor Blades
subsections: section_title: Background
paragraphs: During Operation Iraqi Freedom, the Marine Corps relied on a variety of  helicopters to support its forces during combat operations. These include  the UH-1N Huey, a twin-engine utility helicopter used in command and  control, re-supply, casualty evacuation, liaison, and troop transport, and the  CH-53E Super Stallion, a triple-engine cargo helicopter used to transport  heavy equipment and supplies. Both types of helicopters require numerous  spare parts, including rotor blades, to maintain their operational status  (see fig. 16). In Iraq, Marines reported that enemy fire and harsh  environmental conditions, such as heat, sand, and unimproved airfields,  increased the wear and tear on the rotor blades.
All Marine Corps helicopter spare part supplies, including rotor blades, are  managed by the Naval Inventory Control Point Philadelphia.
section_title: No Supply Shortages Existed During Operation Iraqi Freedom
paragraphs: There were no shortages of rotor blades between October 2002 and  September 2004, although there were indications of concern due to  increased wear and tear caused by operating from unimproved airfields,  the harsh environment, and back orders. We do not consider this a shortage  because the supply system filled back orders within 2 months and Marine  Corps officials from the 3rd Marine Air Wing reported no major supply  shortages of rotor blades for the UH-1N and CH-53E helicopters during OIF.
The supply system was able to provide a sufficient replacement quantity of  UH-1N and CH-53E rotor blades despite increased demands. For example,  the Marine Corps took the forecasted 16 UH-1N helicopter rotor blades, to  Iraq. As figure 16 shows, from March 2003 through August 2004, the  Marines requisitioned 22 additional rotor blades to support their mission,  and the supply system met those demands by filling orders within 2 months  of receiving the order.
In addition, air wings from outside the theater supported the demand in  Iraq by providing rotor blades from various air stations, ship supply, and  Marine Aviation Logistics squadrons. As a result, the Marines were able to  maintain a mission capable rate for the UH-1N of 75.4 percent during OIF,  compared with a peacetime rate of 79.9 percent in 2000. To date, the Naval  Inventory Control Point Philadelphia continues to meet UH-1N rotor blade  demands for OIF.
The 3rd Marine Air Wing took 33 of the forecasted requirement of 64 rotor  blades to support CH-53E helicopters in Iraq. As figure 18 shows,  55 additional rotor blades were ordered through the supply system, with  14 on back order from March 2003 through September 2004. The supply  system met those demands by filling orders within 1 month of receiving the  order. As a result, the Marines were able to maintain a mission capable rate  for the CH-53E helicopter of 67.5 percent during combat operations,  compared with a peacetime rate of 72.3 percent in 2000.
Marine Corps officials stated that there were no shortages of rotor blades  for UH-1N and CH-53E helicopters and our analysis of the 3rd Air Wing’s  demand and the supply system’s ability to promptly provide rotor blades  during OIF supports their assertion.
section_title: Efforts to Maintain Rotor Blade Supply
subsections: section_title: Short-term Efforts
paragraphs: Even though they were able to get enough rotor blades from the supply  system to meet their demands, Marines took a number of actions during  OIF to extend the life of rotor blades in theater. Marines improved the  durability of CH-53E rotor blades and other bladed helicopter parts by  coating them with titanium paint and a tape covering in order to protect the  leading edge of the blade from sand erosion. In addition, as the pace of  combat operations slowed, Marines built permanent airfields with paved  landing areas, which decreased blade erosion during take-off and landing.
section_title: Long-term Efforts
paragraphs: The Marine Corps and Naval Inventory Control Point Philadelphia attribute  their ability to provide rotor blades to using models to determine numbers  and timing of spare parts and upgrades to sustain helicopter operations.  The Marine Corps and the Naval Inventory Control Point Philadelphia  maintain a 5-year old system, the Common Rate Calculation  System/Common Application Development System, which uses 4-year  historical demand data for the entire aircraft community for particular  helicopters, engineering data and worldwide environmental factors to  produce more accurate demand projections.
section_title: Meals Ready-to-Eat
subsections: section_title: Background
paragraphs: The standard military ration for the individual combatant is a prepackaged,  self-contained ration known as a MRE (see fig. 19). A MRE consists of  1,300 calories per bag and is designed to sustain an individual engaged in  heavy activity, such as military training or actual military operations, when  normal food service facilities are not available. MREs are issued in cases  of 12 and MREs have a shelf life of 3 years when stored at 80°F.
DLA’s Defense Supply Center Philadelphia manages the MRE supply for all  services. It has supplied a total of 5.1 million MRE cases for OIF.
section_title: Extent and Impact of Shortages
paragraphs: MREs were not available to the warfighter at some point between  October 2002 and September 2004. We consider this item to have a  shortage because demand exceeded the amount available to meet the  needs of the warfighters.
As figure 20 indicates, as the demand for MREs in OIF grew between  December 2002 and March 2003, the worldwide inventory declined. A  shortage of MREs began in February 2003 and continued into March 2003  when monthly demand peaked at 1,810,800 cases, although only 500,000  cases were available in the inventory. Figure 20 also shows the production  output of MREs increased from December 2002 through April 2003. As a  result of DLA’s actions to maintain an industrial base capable of a large  surge in production, the industrial base was able to increase its monthly  production of MREs. Consequently, DLA never reported any back orders  for MREs during OIF. In late April 2003, as U.S. forces transitioned from  MREs to other food consumption options, monthly demand decreased  significantly to 650,000 MRE cases. That month, the industrial base  produced 1.3 million cases. From May 2003 on, a sufficient quantity of  MREs were available in inventory to meet demand.
Army and Marine Corps units did not always have all the MREs they  needed. According to CENTCOM after-action reports, Army combat units  were supposed to arrive in theater with a 7 to 10 day supply of MREs.  However, CENTCOM reported that many units did not arrive with this  quantity, thereby placing a strain on the in-theater inventory. An analysis of  Army logistics reports by the RAND Corporation indicated that some units  came within 2 days or less of exhausting on-hand quantities. According to  the 2nd Force Service Support Group, Marine Corps combat units averaged  a 6- to 8-day supply throughout the war, but there were times when some  forces had less than 1-day on-hand supply. Marine Corps’ Combat Service  Support Companies, which directly support combat units, also reported  critical shortages of MREs. According to the 1st Force Service Support  Group, direct support units were supposed to maintain a 2-day supply.  However, according to a study by the Center for Naval Analysis, there were  times in late March and mid-April 2003 when direct support units had less  than a 1-day supply.
section_title: Causes of Shortages
paragraphs: Problems with requirements planning, the release of Operations and  Maintenance funding, and distribution contributed directly to shortages of  MREs in theater.
subsections: section_title: Requirements Not Accurately Forecasted
paragraphs: DLA’s forecasted requirements did not support MRE customer demand for  the first month of combat operations because of rapid changes in the size  of troop deployments. DLA’s forecasted requirement for March 2003 was  996,556 cases of MREs; this number fell short of meeting the customer  demand of 1,810,800 cases. The March 2003 forecasted requirement did not  include data that anticipated initial in-theater personnel levels would be  doubled because of a faster deployment of certain units. In a lesson-learned  report, CENTCOM stated that the forecasted MRE requirement for the  period of deployment was predicated on a 30-day supply for 50,000  personnel. This forecast was quickly exceeded by the deployment of  100,000 personnel during that 30-day period. The resulting demand placed a  strain on existing in-theater MRE inventories. However, DLA’s model  provided accurate planning estimates for MRE customer demand for all  other months.
section_title: Funding Was Not Available When Needed
paragraphs: The Army experienced a delay in the release of operations and  maintenance funding for MREs, despite DOD requirements that supply  chain processes provide timely support during crises. Although the Army  wanted to submit MRE requisitions to DLA in September 2002, it could not  do so because it lacked the Operations & Maintenance funding necessary  to purchase them. When the Army submitted the requisitions in  December 2002, DLA shipped MREs to Kuwait. However, this 4-month  delay in funding contributed to the shortage of MREs by delaying  shipments of MREs into the theater.
The Marine Corps faced a similar funding problem that delayed the  processing of ration requests for OIF. As reported in a Marine Corps  lessons-learned report, a January 6, 2003, request for a withdrawal  of rations from the war reserve was delayed due to lack of available  operations and maintenance funding from Headquarters Marine Corps. The  Marine Corps provided notification of partial funding and the Marine  Corps’ first request for rations was passed to DLA on January 16, 2003.  Funding was available to provide for the remainder of the requirement and  funded requisitions were passed to DLA on February 10, 2003, 5 days  before the Marines’ required delivery date of February 15, 2003.
section_title: Numerous Distribution Problems Impeded Supply
paragraphs: A number of distribution problems in the logistics supply chain hampered  MRE availability.
subsections: section_title: Inaccurate Delivery Time Forecasts
paragraphs: One problem was that actual MRE delivery times exceeded the forecasted  delivery times. Most MREs were transported by ship from the U.S. to a  seaport of debarkation in theater and then by ground transportation to  combat units. CENTCOM officials estimated it would take 30 to 45 days to  transport MREs from the United States to a warehouse in theater. However,  they stated that the actual total time to move these rations averaged  49 days: 31 days for transit to the theater, 3 days to gain a berth at port,  5 days to discharge supplies, and 10 days for movement from the port to  the theater warehouse. Officials also noted that there were times when it  took as long as 60 days to transport MREs from the United States to  Kuwaiti ports because multiple, rather than single, vessels were used in the  transport process—a factor that initial delivery time estimates did not take  into account.
section_title: Limited Materiel Handling Equipment and Transportation Assets
paragraphs: The lack of sufficient materiel handling equipment and transportation  assets in theater up to and during combat operations caused delays in  unloading supplies from ships and transporting them to combat units.  Because of the lack of adequate handling equipment, logistics personnel  could not efficiently unload the large shipments of MREs arriving at ports  in Kuwait, resulting in a backlog of ships waiting to be unloaded. DLA  officials stated that, at one point in time, 1.4 million MREs were sitting at a  port in theater, waiting to be processed. In addition, there were insufficient  transportation assets to move MREs from ports to theater distribution  warehouses. In particular, local contractors responsible for delivering  rations did not have sufficient trucks to make regular deliveries to theater  distribution warehouses. In addition, there were insufficient materiel  handling equipment and transportation assets to move MREs from storage  locations to combat units. For example, according to one OIF after-action  report there were times when 80 trucks were needed to move rations  forward but only 50 were available.
section_title: Poor In-transit Visibility
paragraphs: Poor in-transit visibility also delayed distribution of MRE shipments in  several ways. CENTCOM officials stated that logistics personnel could not  always rely on radio frequency identification device technology to account  for shipments. Despite a CENTCOM requirement that radio frequency  identification device tags be used for all shipments to theater, CENTCOM  estimated initial use was only about 30 percent. Among other problems  experienced were the failure to attach tags to all containers and a lack of  sufficient tracking devices to read tags in order to identify subsistence  items stored in containers. As a result, logistics personnel stated they had  to manually review all packing documents to identify the contents of  containers, thereby slowing down the distribution of supplies.
Because of poor tracking, sufficient supplies of MREs sometimes existed  but were not visible. For example, during the MRE shortage, a DOD official  found over 17 20-foot containers with MREs at a supply base located  halfway to Baghdad; the MREs were there for a week because no one knew  they were there.
section_title: Efforts to Improve Availability
subsections: section_title: Short-term Efforts
paragraphs: To reduce MRE consumption during the shortage, Army and Marine Corps  officials stated that units switched to alternate feeding methods such as  Unitized Group Rations. CENTCOM reported working with various carriers  and the (Military) Surface Deployment and Distribution Command to use  sustainment packages weeks ahead of their scheduled issue dates.
To improve the distribution of MREs, military officials formed a joint  working group including members from DLA, the Coalition Forces Land  Component Command, CENTCOM, and U.S. Transportation Command.
This group communicates regularly to improve in-transit visibility over  rations. CENTCOM officials stated that due to the lateness of ships arriving  in theater, DLA located additional rations in other theaters that were  shipped to OIF.
section_title: Long-term Efforts
paragraphs: To ensure timely visibility of anticipated requirements, DLA has  recommended that collaboration between it, the Combatant Commands,  and the services be enhanced. To improve the timeliness of funding, DLA is  working with the services to refine their plans for releasing funding early in  the deployment process. To deal with distribution problems in theater, the  Secretary of Defense in September 2003 designated the U.S. Transportation  Command as the Distribution Process Owner. The Transportation  Command established a Deployment and Distribution Operations Center in  January 2004. The center is responsible for improving the distribution  process within theater by directing airport, seaport, and land  transportation operations.
section_title: Five-Ton Truck and High-Mobility Multi-Purpose Wheeled Vehicle Tires
subsections: section_title: Background
paragraphs: The U.S. Army depends on a variety of trucks and other vehicles to support  combat operations. During OIF, it relied on the 5-ton capacity cargo truck  to transport all types of supplies and on the HMMWV to carry troops and  armaments, as well as to serve as an ambulance and scout vehicle. The  5-ton truck (fig. 21) is outfitted with six radial tires and the HMMWV with  four radial tires. The tires are specific to each type of vehicle and are not  interchangeable.
The Army’s TACOM Tire Group manages the tire inventory for wheeled  vehicles, including the 5-ton truck and the HMMWV, for U.S. forces  worldwide. These tires are produced for the military by several  manufacturers, including Goodyear and Michelin.
section_title: Extent and Impact of Shortages
paragraphs: Tires for the 5-ton truck and the HMMWV were not available to the  warfighter at some time between October 2002 and September 2004.  We consider this item to have a shortage because demand exceeded the  amount of inventory available to meet the needs of the warfighters.  U.S. forces and logistics personnel reported critical shortages of 5-ton  truck and HMMWV tires during OIF that negatively impacted their mission.  According to TACOM officials, the increased pace of the operations  resulted in high-vehicle mileage that caused significant wear and tear on  these tires.
Prior to the onset of OIF in March 2003, TACOM had no back orders for  5-ton truck tires and reported it was able to support demands from  customers worldwide. However, as figure 22 shows, back orders started to  accumulate after OIF began and, by October 2003, the number had peaked  at 7,063 tires per month. Similarly, worldwide demand for tires rose after  March 2003. As figure 22 indicates, this demand increased fourfold over the  course of 1 year, climbing from a peacetime level of 1,189 tires in April 2002  to a wartime level of 4,800 tires in April 2003. While demand remained high  during the summer of 2003, inventory levels dropped to below 1,000 and  were insufficient to meet customer needs. For example, in August 2003  when demand reached 4,828 tires, TACOM recorded only 505 tires in its  inventory worldwide. According to TACOM officials, demands from OIF  received priority and much of the available inventory supported operations  in Iraq.
TACOM reported no back orders for HMMWV tires prior to OIF. However,  as figure 23 shows, back orders began to increase in April 2003 and peaked  at 13,778 tires in September 2003 as demand increased and industry took  several months to respond. According to TACOM officials, back orders  accumulated because of the increasing demands coming from OIF.  Worldwide demand rose rapidly in June 2003, peaked at 16,977 tires in  August 2003, and gradually declined during the winter months (see fig. 23).  Over the span of 1 year, worldwide demand increased more than four-fold,  from a peacetime rate of 3,251 tires per month in June 2002 to 15,224 tires  per month in June 2003. While demand grew during the summer of 2003,  inventory levels were insufficient to meet customer needs. For example, in  July 2003, TACOM recorded only 4,286 HMMWV tires in its inventory, but  had demands for a total of 14,435 tires. Fluctuating demands were caused  by the intensity of the war fight and the changing mixture of weapons  systems employed.
Army and Marine Corps units reported that tire shortages negatively  affected operations in Iraq. Units of the 3rd Infantry Division reported that  they could not get the required number of tires to support their mission and  that the shortage of tires forced them to leave vehicles and supplies behind.  In addition, TACOM reported in June 2003 that it could only provide  64 percent of the spare parts, including tires that the 4th Infantry Division  considered urgent. Although the 4th Infantry Division reported shortages in  theater, it did not report any mission impact due to tire shortages. In an  after-action report, the U.S. Marine Corps documented that cannibalization,  stripping, and abandoning otherwise good vehicles occurred because of the  lack of spare tires.
subsections: section_title: Causes of Shortages
paragraphs: Problems with war reserve stocks, forecasted requirements planning,  funding, and distribution contributed to shortages of the 5-ton and  HMMWV radial tires during OIF.
section_title: Insufficient War Reserves Stock
paragraphs: The number of tires in war reserve stocks was not sufficient to support  customer demands when OIF began. According to Army regulations, war  reserve stocks are intended to meet the initial increase in demand during  wartime and to fill the gap until the national supply system can increase  production. In December 2002, TACOM officials managing war reserves  established a requirement for 259 tires for 5-ton trucks. However, officials  had only 38 tires on hand at that time, and 3 months later in March 2003,  they had only 16 tires on hand. As of October 2004, the war reserve  requirement for the 5-ton truck tire remained at 259 tires, but there were  only 2 tires in the inventory. As figure 22 shows, the demand for 5-ton  truck tires was always higher than 259 tires, starting with 978 tires in  February 2002 and continuing throughout OIF. Therefore, the war reserve  requirement of 259 tires was too low to support initial demands from units  in theater.
For HMMWV radial tires, TACOM managers had a sufficient number  of tires to meet the war reserve requirement of 1,505 tires in  December 2002. In March 2003, managers increased the HMMWV tire war  reserve requirement to 7,908 tires, but they failed to adequately stock tires  in the inventory. At that time, they only had 1,483 tires on hand. As of  October 2004, the war reserve requirement for HMMWV tires remained at  7,908 tires, but there were only 3,764 tires in the inventory.
TACOM officials told us that they do not adequately stock tires in the war  reserves because they lack the necessary funding. This was the result of  risk based decisions about how to allocate DOD funds. As of October 2004,  TACOM’s war reserve requirements for all items it manages  (including tires) totaled $1,355.7 million. However, it has received only  $828.9 million to support those requirements. As a result, TACOM officials  have used a risk management approach to prioritize the funding of their  requirements. For example, they gave funding priority to more expensive  items, such as tank engines, which have long lead-times and are difficult to  procure, rather than to less expensive items, such as tires, which can be  produced faster. When OIF began, tires stocked in war reserves were  inadequate to support initial customer demands because of these  decisions.
section_title: Inaccurate Forecasted Requirements
paragraphs: TACOM’s forecasted requirements for vehicle tires underestimated the  actual demand for tires during fiscal year 2003. For example, TACOM  forecasted that worldwide requirements, for the 5-ton truck tire would  reach 1,497 tires per month in April 2003; however, the actual demand for  this tire rose to 4,800 for that month, more than three times higher than the  forecasted requirements. Similarly, TACOM forecasted that customers  would need 5,800 HMMWV tires per month in June 2003; instead, actual  worldwide demand for HMMWV tires grew to 15,224 per month, three  times higher than the forecasted amount.
In June 2003, TACOM changed its requirements forecasting model for tires  and other spare parts from a 12-month average demand base to a 30-day  average demand base to respond to the sharp increase in actual demand.  According to TACOM officials, the 12-month average demand base model  did not react quickly enough to actual demands, which were at times three  or four times higher than the monthly forecasted requirements. By  changing the model to a 30-day average demand base, TACOM was able to  stock up on inventory faster.
In setting forecasted requirements for tires, TACOM officials stated they  relied heavily on past historical demand data because it received little  guidance on the expected demand activities or operational plans from  Army headquarters. TACOM expected an increase in demand for fiscal year  2003 because of the growing demand from southwest Asia, especially  Kuwait, prior to the onset of OIF. Officials from TACOM’s Tire Group told  us they put an emphasis on past historical demand data to forecast their  future requirements. Similarly, TACOM’s Track and Roadwheel Group  reported that they relied on historical data, including information from  Operation Desert Storm/Shield and operations in Bosnia, to help them  forecast future requirements in the absence of official guidance.
section_title: Insufficient and Erratic Funding
paragraphs: According to TACOM officials, the Tire Group did not receive adequate  funding (referred to as obligation authority) from the Department of the  Army’s working capital fund to buy additional tires to meet customers’  needs. Furthermore, when obligation authority became available, they did  not receive it promptly. In fiscal year 2003, TACOM had worldwide  demands for tires totaling $246.3 million; however, it received only  $212 million in obligation authority, about 86 percent of its total  requirements. By comparison, during the same fiscal year, TACOM received  about $118.5 million worth of requisitions for all tires needed in OIF. As  TACOM exhausted its obligation authority during fiscal year 2003,  additional releases came in sporadically. For example, in July 2003,  TACOM reported that it had used all of its obligation authority but still  had $22 million worth of contracts that needed funding; by August 2003,  however, TACOM reported that it had funds available to continue awarding  contracts. TACOM’s Tire Group complained that the ‘stop-start’ funding  releases complicated their efforts in maintaining a consistent supply  of tires from tire manufacturers by preventing them from providing a  steady stream of funds in advance of production lead-time.
TACOM’s Tire Group also did not know when or how much the next release  of obligation authority would be. In order to ensure that the industrial base  could provide supplies promptly, TACOM needed funding at least one  procurement lead-time (e.g., the time it takes a manufacturer to make and  deliver the tire) in advance of the delivery date. For most tires, the  procurement lead-time is 3 to 6 months. Therefore, in order to meet  unexpected surges in demand, TACOM needed to have funding available  3 to 6 months prior to the surge.
In addition to the Tire Group, TACOM as a whole was underfunded in  fiscal year 2003. Figure 24 shows that throughout fiscal year 2003, TACOM  was funded below its actual requirements. At the beginning of fiscal year  2003, TACOM identified its requirements at $1,357 million; however, it was  provided with only $885 million in obligation authority. By May 2003,  TACOM came close to using all of its obligated authority without any  assurance that additional funding would arrive. As a result, TACOM  officials asked their support groups to conserve funding for the most  critical items until additional funding arrived. However, in June 2003 TACOM received additional funding, which allowed item managers to  resume awarding contracts for supplies. For fiscal year 2003, TACOM  identified its actual requirements at $2,726 million (including $345 million  for reset) but it received only $2,379 million in obligation authority.
section_title: Constraints in the Distribution Process
paragraphs: Distribution constraints, both in the continental U.S. and in OIF,  contributed to customers not receiving supplies. The distribution system  was not prepared to handle the volume of supplies ordered by customers or  the speed with which supplies needed to be delivered.
In the summer of 2003, the Defense Distribution Center Susquehanna,  Pennsylvania, became overwhelmed by the volume of incoming shipments  from contractors delivering supplies for units in Iraq. Because of the  increased volume, the center gave contractors delivery appointment times  that were 2 to 3 weeks in the future, thereby delaying the delivery and  processing of many items, including tires.
Once tires were in the distribution center’s warehouse, the requirement to  build pallets to ship them to the theater caused further delays. Officials told  us that the backlog of pallet building resulted in delays of up to 30 days or  more before tire shipments could be released from the center. To alleviate  this backlog, all tires shipped in and after June 2003 were diverted to the  Defense Depot Red River, Texas, to be palletized and shipped directly to  aerial ports of embarkations at Charleston and Dover Air Force Base.
Once tires were shipped from the U.S., TACOM lost all visibility of tire  shipments within CENTCOM’s area of responsibility. At the Port of Kuwait,  containers could not be identified because radio frequency identification  tags that should have been on the pallets were lost during shipment, thus  increasing processing time. In addition, once these shipments left the port,  receipts were not posted at the customer supply support center to verify  delivery. Officials also stated that because of the lack of in-transit visibility,  shipments were frequently diverted to other destinations without TACOM’s  knowledge or authorization.
section_title: Efforts to Improve Availability
paragraphs: TACOM initiated several temporary actions and one long-term action to  improve the availability of tires to customers in the field. However, TACOM  officials did not identify efforts to improve funding problems experienced  during OIF, and they told us that they are not aware of any initiatives at  AMC headquarters or the Department of the Army that address funding  issues.
subsections: section_title: Short-term Efforts
paragraphs: To ensure that forecasted requirements better reflected actual demands, in  June 2003, TACOM’s Tire Group changed the average demand base it used  to calculate requirements from 12 months to 30 days. By making this  change, the Tire Group captured demand data in real-time and allowed item  managers to better estimate future requirements. As result, item managers  were able to justify procuring more tires to meet future demands.
To ensure continuous production while awaiting additional obligation  authority, officials from TACOM’s Tire Group noted persuading  manufacturers to continue making tires. Tire manufacturers continued  making tires while waiting for contracts and made capital investments to  procure more tire molds, enabling them to increase production once  contracts were awarded and obligation authority became available.
To ensure quicker distribution of tires to customers in theater, TACOM sent  a group of supply personnel to Camp Arifjan in Kuwait to expedite the  processing of TACOM’s shipments of tires and other spare parts. In  response to complaints that TACOM’s tire and spare parts shipments were  being diverted and not reaching the right customers, TACOM’s supply  personnel also helped to look for these shipments and get them delivered.
section_title: Long-term Efforts
paragraphs: To help solve the long-term distribution problems in theater, in  September 2003 the Secretary of Defense designated the  U.S. Transportation Command (TRANSCOM) as DOD’s Distribution  Process Owner. TRANSCOM established a Deployment and Distribution  Operation Center in January 2004. Under the control of CENTCOM, this  center is responsible for improving the distribution process within theater  by directing all airport, seaport, and land transportation operations.
section_title: Up-Armored High-Mobility Multi-Purpose Wheeled Vehicle and Add-on-Armor Kit
subsections: section_title: Background
paragraphs: The HMMWV is a highly mobile, diesel-powered, four-wheel-drive vehicle  with a 4,400 pound payload. Using common components and kits, the  HMMWV can be configured to become a troop carrier, armament carrier,  shelter carrier, ambulance, anti-tank missile carrier, or scout vehicle.  The initial number and type of HMMWVs in each unit is based on  standard equipment lists. According to officials, they are the most  numerous U.S. military vehicles in CENTCOM’s area of responsibility.  The Army reported that there were 18,656 vehicles—both armored and  unarmored—in theater, as of July 2004.
subsections: section_title: Up-Armored HMMWV
paragraphs: One version of the HMMWV is a production model known as an  Up-Armored HMMWV, also designated as the M1114 model (see fig. 25).  This model is produced by AM General Corporation and armored by  O’Gara-Hess Eisenhardt, requirements for CENTCOM’s area of operations,  including Iraq and Afghanistan, call for this up-armored variant. The M1114  model of the vehicle features ballistic-resistant windows and steel-plate  armor on the doors and underside to protect against rifle rounds and  explosive blasts, fragmentation protection, and additional armor for the  turret gunner on the roof to protect against artillery, as well as a powerful  air conditioning system.
section_title: Add-on-Armor Kits
paragraphs: In order to provide armor protection to existing unarmored HMMWVs in  theater, the Army has developed an add-on-armor kit to be mounted on  vehicles. The basic kit includes armored doors, under-door armor plates,  seat-back armor, ballistic glass windows, and a heavy-duty air conditioning  system. Seven Army depots and arsenals, managed by the Ground Systems  Industrial Enterprise, currently produce the kits. The Army began shipping  the kits to Iraq by mid-November 2003 and started mass production at their  depots in December 2003. The Army also contracted with O’Gara Hess  Eisenhardt to produce additional armor kits to meet theater requirements.
section_title: Extent and Impact of Shortages
paragraphs: Up-armored HMMWVs and add-on-armor kits were not available to the  warfighter at some time between October 2002 and September 2004. We  consider this item to have a shortage because vehicles and kits were not  available to meet the validated requirements developed by the warfighters.  The Army has been consistently unable to meet recurring spikes in demand  for vehicles and kits. However, the overall impact of the Army’s inability to  deliver the vehicles and kits is difficult to measure.
subsections: section_title: Extent of Up-Armored HMMWV Shortages
paragraphs: Since the Coalition Forces Land Component Command first began  identifying up-armored HMMWV requirements for CENTCOM’s area of  responsibility in the summer of 2003, there has been a gap between the  number of vehicles required and the number of vehicles the industrial base  is producing. By September 2004, TACOM and the Army had provided  5,330 of the 8,105 required vehicles in theater. To meet Coalition Forces  Land Component Command’s requirements, the Army program managers  worked with O’Gara-Hess Eisenhardt to produce an additional 2,533 new  up-armored HMMWVs and the Department of the Army redistributed an  additional 2,797 existing vehicles to Iraq from elsewhere in the world.  Figure 27 shows that Coalition Forces Land Component Command  requirements for vehicles increased faster than O’Gara-Hess Eisenhardt  was producing them, with requirements growing from 1,407 vehicles in  August 2003 to 8,105 vehicles by September 2004. The Army worked with  the manufacturers to increase production from 51 vehicles per month in  August 2003 to 400 vehicles per month in September 2004. According to  Army officials, O’Gara-Hess Eisenhardt will increase production to its  maximum capacity of 550 vehicles per month and will meet current  requirements by March 2005.
Appendix X Up-Armored High-Mobility Multi-Purpose  Wheeled Vehicle and Add-on-Armor Kit Dec.
Jan.
Feb.
Mar.
Apr.
Aug.
Sept.
section_title: Extent of Add-on-Armor Kit Shortages
paragraphs: As of September 2004, the Army supplied 8,771 of the 13,872 Add-on Armor  kits required by CENTCOM but still needed 5,101 additional kits to meet all  requirements. The Ground Systems Industrial Enterprise depots and  arsenals were required to produce 12,372 while O’Gara-Hess Eisenhardt  was required to produce the remaining 1,500 kits. As shown in figure 28, by  September 2004 the validated requirement of 8,400 kits grew to 13,872. To  meet the 8,400 requirement, program managers worked with several Army  depots to increase production from 35 kits a month in December 2003 to  600 kits per month by July 2004. At this production level, theater  requirements would have been met by August 2004. However during this  same month, Coalition Forces Land Component Command increased the  requirement to 13,872 kits. Army officials stated that it would take 3 to  4 months to meet this new demand and accordingly expected the  requirement to be met by early 2005.
Appendix X Up-Armored High-Mobility Multi-Purpose  Wheeled Vehicle and Add-on-Armor Kit Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Aug.
Sept. transport for teams of engineers operating in the constricted urban  environments of Iraq.
section_title: Causes of Shortages
paragraphs: There are two primary causes for the shortages of up-armored vehicles and  add-on-armor kits. First, a decision was made to pace production rather  than use the maximum available capacity. Second, funding allocations did  not keep up with rapidly increasing requirements.
subsections: section_title: Production Was Not Paced to Match Maximum Capacity
paragraphs: DOD paced the production of armor for HMMWVs to meet initial  CENTCOM requirements, but did not use the maximum available  production capacity as the requirements increased dramatically after the  onset of OIF. According to Army officials, the total Army up-armored  HMMWV requirement prior to OIF was approximately 360 vehicles per  year, to be produced at a rate of 30 vehicles per month. However, beginning  in August 2003, Coalition Forces Land Component Command developed  new requirements for additional up-armored HMMWVs based on requests  from units in theater; the requirement increased 576 percent from 1,407 to  8,105 vehicles by September 2004. There was also a significant increase in  the requirement for kits. In November 2003, the initial requirement for  Add-on Armor kits was 8,400 kits. By September 2004, the requirement had  increased to 13,872 kits.
O’Gara-Hess Eisenhardt, the sole producer of the up-armored HMMWV,  increased production, in accordance with agreements with the Army;  however, that rate of production has not been sufficient to meet increasing  demands. The schedule of monthly production increases agreed to by the  Army and O’Gara-Hess Eisenhardt was based on meeting existing  requirements established at a particular time as well as funding constraints.  For example, the Army had requirements of 4,149 vehicles in February 2004  to meet CENTCOM’s needs. In meeting this requirement, the Army  redistributed over 3,000 existing up-armored HMMWVs to CENTCOM’s  area of responsibility and agreed to have O’Gara-Hess Eisenhardt to  produce the rest of the vehicles. The Army had planned to meet the  February 2004 requirement by July 2004 without having O’Gara-Hess  Eisenhardt reach its maximum capacity.
As shown in figure 27, the vehicle production rate has increased every  month from 51 vehicles in August 2003 to 400 vehicles by September 2004,  with a planned production of 460 vehicles per month by October 2004.
However, the signed agreement with O’Gara-Hess Eisenhardt indicates that  the maximum production could have been increased to 500 vehicles per  month in October 2004 if needed. Interviews with Army and contractor  personnel indicated that there were other constraints on production, such  as the availability of communication equipment.
Despite increasing requirements for the add-on-armor kits, additional  available production capacity was not used. Prior to CENTCOM’s  requirement for 8,400 kits in November 2003, the Army had already begun  designing and shipping some ‘pilot’ kits in theater. When it received the  requirements in 2003 for 8,400 kits, the Ground Systems Industrial  Enterprise’s depots and arsenals began ordering raw materiel such as steel  and ballistic glass and ramped up production from 35 kits per month in  December 2003 to 3,998 kits per month in April 2004. As total production  neared the 2003 requirement, production was slowed to 333 per month by  September 2004. Because the kits take three to four months to produce, it  was not until January 2004 that the depots and arsenals began shipping  substantial quantities to theater.
Our review of Army data and interviews with Army officials shows that  additional capacity to produce kits was available within the Ground  Systems Industrial Enterprise system. Managers at Ground Systems  Industrial Enterprise indicated that seven arsenals and depots could have  maintained the maximum level of production without affecting other  operations at the depot, filling the kit requirement early in 2004. In addition,  in February 2004, a contractor operated Army facility informed the Ground  Systems Industrial Enterprise managers that it could produce another  800 4-door kits per month. While the managers stated that they did not use  the contract operated facility due to issues with contract timing and price,  they did not have information on the decision to slow the pace of  production.
DOD decision makers determined the pace at which both up-armored  HMMWVs and kits would be produced, but did not inform Congress about  the total available production capacity. We have not been able to determine  what criteria were used to set the pace of production; however, in both  cases, additional production capacity was available, particularly for the  kits. As a result of the lack of visibility into and acceptance of decisions  made about the rate of production, DOD received criticism about the  availability of armored vehicles in Iraq.
section_title: Funding for Up-Armored HMMWV Production Was Not Received in a Timely or Predictable Manner
paragraphs: While funds were available to support the planned pace of production of  up-armored HMMWVs, program managers were not aware of the time  frame for releasing funds. Although TACOM received over $1.4 billion  between fiscal years 2003 and 2004 to produce 7,502 vehicles, it was not  released in a timely and predictable manner. Figure 29 shows that in August  2003, the managers received requirements for 1,407 vehicles. However, it  had received funding to produce only 648 vehicles. By October 2003,  program managers had a requirement to produce 3,279 vehicles, but  received funding to produce only 1,456 vehicles. Significant differences  continued until April 2004, when requirements reached 4,454 vehicles and  the program managers received funding to produce 4,320 vehicles.
Appendix X Up-Armored High-Mobility Multi-Purpose  Wheeled Vehicle and Add-on-Armor Kit Dec.
Jan.
Feb.
Mar.
Apr.
Aug.
Sept.
The disbursement of funds affected program managers’ ability to plan and  contract with O’Gara-Hess Eisenhardt to produce sufficient quantities of  up-armored HMMWVs. As shown in figure 29, requirements increased in  June 2004 to 6,223 vehicles and again in August to 8,105 vehicles.  However, additional funding—$572 million—was not received until  August 25, 2004 to meet demands. As a result, Army officials stated it could  not ask O’Gara-Hess Eisenhardt to ramp up to its maximum capacity of  550 vehicles per month because it did not have the funding at the time  requirements increased. Furthermore, program managers explained that if  O’Gara-Hess Eisenhardt is to efficiently produce vehicles at a consistent  and high rate, the company should be assured of consistent funding at least  3 months in advance of delivery. The program officials stated that they did  not know when funding would come, how many disbursements they would  be receiving in a given fiscal year, or what amount of funding to expect,  thus further complicating their procurement planning.
section_title: Efforts to Improve Availability
subsections: section_title: Short-term Efforts
paragraphs: The major short-term solution to the up-armored HMMWV funding issue  has been the receipt of additional funding from congressional increases,  supplemental funding, and Office of Secretary of Defense additions. For  fiscal years 2003 and 2004, the Army received over $1.4 billion to produce  7,502 up-armored HMMWVs to meet worldwide requirements, including  8,105 vehicles required for CENTCOM’s area of operation, mostly from  congressional increases and supplementals. Specifically in fiscal year 2004,  the Army received $1.19 billion in congressional plus-ups, supplementals,  and Office of Secretary of Defense additions above its $51.7 million  received in the President’s Budget to produce more up-armored HMMWVs.
To meet continuing needs for force protection, Congress recommended  $865 million in the 2005 appropriations bill to be used by the Army to armor  additional HMMWVs and other vehicles. As part of the Rapid Response  Force Protection Initiative, Congress intends the funds to be used to  purchase and modify a variety of vehicles currently used in theater to  respond rapidly to the threat of improvised explosive devices and mortar  attacks experienced by deployed U.S. forces.
To improve the industrial capability, the Army worked with O’Gara-Hess  Eisenhardt as well as Army depots to increase production of vehicles and  kits. For example, program managers worked with O’Gara-Hess Eisenhardt  to increase up-armored HMMWV production from an average of 30 vehicles  a month to 400 vehicles a month by September 2004. The company plans to  increase production to a maximum 550 vehicles a month to meet current  requirements by March 2005. Army also ran 24-hour assembly lines at its  depots and produced over 1,000 add-on-armor kits per week between  March and April 2004 when materials were available to make the kits.
section_title: Long-term Efforts
paragraphs: At the time of this review, Army officials had not identified any long-term  efforts to improve the availability of up-armored HMMWVs or  add-on-armor kits.
section_title: Comments from the Department of Defense
subsections: section_title: GAO’s Comments
paragraphs: our recommendation to require that DOD specify when these actions  will be completed. 12. DOD stated that it is taking a number of actions to develop a holistic  information technology plan to improve distribution. According to  DOD, this plan, which is expected to be completed in May 2006, will  recommend systems integration solutions to synchronize end-to-end  distribution. We remain concerned that until this plan is completed and  its recommendations fully implemented, DOD and the services will not  be able to achieve their goal of distributing the right supplies to the  right places when war fighters need them. Therefore we have also  modified our recommendation to require DOD to specify when the  plan’s recommendations will be implemented.
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, Nancy L. Benco, John C. Bumgarner,  Michele C. Fejfar, Emily Gupta, Shvetal Khanna, Harry A. Knobler,  Kenneth R. Knouse, Jr., Elizabeth D. Morris, Tinh T. Nguyen, Kenneth E.  Patton, Terry L Richardson, Cary B. Russell, Rebecca Shea, Christopher W.  Turner, John W. Vanschaik, Jason G. Venner, Gerald L. Winterlin, and  John C. Wren made key contributions to this report.
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subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Congressional Relations
section_title: Public Affairs