Force Structure: Restructuring and Rebuilding the Army Will Cost Billions of Dollars for Equipment but the Total Cost Is Uncertain
Published: 2008-04-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The high pace of overseas operations is taking a heavy toll on Army equipment. Harsh combat and environmental conditions over sustained periods of time have exacerbated equipment repair, replacement, and recapitalization problems. The Army has also taken steps to restructure its forces before implementing its longer term transformation to the Future Combat System. To support ongoing operations and prepare for the future, the Army has embarked on four key initiatives: (1) restructuring from a division-based force to a modular brigade-based force, (2) expanding the Army by adding about 74,000 people and creating new units, (3) repairing, replacing, and recapitalizing new equipment through its reset program, and (4) replacing equipment borrowed from its pre-positioned equipment sets around the world. Since 2004, Congress has provided billions of dollars to support the Army's equipping needs. GAO has issued many reports on the Army's efforts to equip modular units, expand the Army, reset equipment, and manage and replace prepositioned equipment. This statement, which draws largely on these reports, will address (1) the equipment-related cost of these initiatives, and (2) the management challenges facing the Army and the actions needed to improve its implementation of these initiatives. GAO is issuing a separate statement today on the Future Combat System (GAO-08- 638T).
section_title: What GAO Found
paragraphs: Restructuring and rebuilding the Army will require billions of dollars for equipment and take years to complete; however, the total cost is uncertain. Based on GAO's analysis of Army cost estimates and cost data, it appears that the Army's plans to equip modular units, expand the force, reset equipment, and replace prepositioned equipment are likely to cost at least $190 billion dollars through fiscal year 2013. However, these estimates have some limitations and could change. Further, the Army has stated it plans to request additional funds to address equipment shortfalls in modular units through fiscal year 2017. Several factors are contributing to the uncertainties about future costs. First, the Army's $43.6 funding plan for equipping modular units was based on preliminary modular unit designs and did not fully consider the needs of National Guard units. Second, the Army expects to need $18.5 billion for equipment to expand the force but has not clearly documented this estimate. Third, costs to reset equipment may total at least $118 billion from fiscal years 2004-2013 but may change because they are dependent on how much equipment is lost, damaged, or worn beyond repair during continuing operations in Iraq and Afghanistan and how long these operations continue. Fourth, the Army believes it will need at least $10.6 billion to replace pre-positioned equipment that was taken out of storage to support ongoing operations, but this amount is an estimate and DOD's overall strategy for prepositioned equipment has not yet been issued Given the magnitude of these initiatives and potential for costs to change, DOD will need to carefully monitor the projected costs of these initiatives so that it can consider tradeoffs and allocate funding to balance the Army's equipping needs for the next decade and longer term transformation goals. A common theme in GAO's work has been the need for DOD and the Army to take a more strategic approach to decision making that promotes transparency and ensures that programs and investments are based on sound plans with measurable, realistic goals and time frames, prioritized resource needs, and performance measures to gauge progress. GAO's work on modular restructuring has shown a lack of linkage between the Army's funding requests and equipment requirements. This lack of linkage impedes oversight by DOD and Congress because it does not provide a means to measure the Army's progress in meeting modular force equipment requirements or inform budget decisions. Oversight of Army initiatives has also been complicated by multiple funding requests that makes it difficult for decision makers to understand the Army's full funding needs. GAO has recommended a number of actions to improve management controls and enhance transparency of the Army's plans for equipping modular units, expanding the force, resetting equipment, and replacing prepositioned equipment. However, many of these recommendations have not been fully implemented or adopted. For example, until the Army provides a comprehensive plan for its modular restructuring and expansion initiatives, which identifying progress and total costs, decision makers may not have sufficient information to assess progress and allocate defense resources among competing priorities.

section_title: Letter
paragraphs: I am pleased to be here today to discuss issues related to Army equipment  in light of the high pace and long duration of operations in Iraq and  Afghanistan as well as the Army’s plans to modernize and transform its  capabilities. The Army has undertaken a number of initiatives to  restructure and rebuild its force in the midst of ongoing overseas  operations. Key initiatives include plans to restructure the Army from  divisions to standardized modular brigades as well as expand the force by  more than 74,000 soldiers. Both of these initiatives will create  requirements for significant quantities of new equipment. Amid ongoing  operations, the Army must also reset (repair or replace) existing  equipment that has been used in harsh environments overseas. Further,  the Army has taken much of its pre-positioned stock out of storage to  support combat operations and these critical reserve stocks will need to  be replenished. Concerned about declining military readiness, Congress  has provided substantial funding in response to Department of Defense  (DOD) funding requests. However, significant challenges continue to face  the Army as it attempts to simultaneously support ongoing operations,  improve the readiness of nondeployed units, and transform its force for  the future.
As you requested, my testimony will focus on the equipping implications  of restructuring and expanding the Army; efforts to repair, replace, and  recapitalize equipment through the Army’s reset program; and  reconstitution of prepositioned equipment. Specifically, I will address (1)  the cost of the Army’s plans to implement these initiatives, and (2) the  management challenges facing the Army and the actions needed to  improve its implementation of these initiatives.
My statement is based on numerous reports and testimonies published  from fiscal years 2005 through 2008. Since 2004, we have examined the  Army’s plans and funding for the four initiatives, and determined the  extent to which the Army’s plans were comprehensive and transparent.  We conducted our work in accordance with generally accepted  government auditing standards. Related reports are listed at the end of this  testimony and include reviews of the Army’s equipping and reset  strategies, prepositioned equipment, modular restructuring, and efforts to  expand the Army. We are also issuing a separate statement today on the  Army’s Future Combat System, a longer term transformation effort that  comprises 14 integrated weapon systems and an advanced information  network and which is estimated to cost about $160 billion.
subsections: section_title: Background
paragraphs: The Army faces enormous equipping challenges while conducting  operations in Iraq and Afghanistan, and restructuring to a modular force.  The Army has four key initiatives underway that impact efforts to equip  the force: the establishment of modular units, expansion of the force,  equipment reset, and reconstitution of prepositioned equipment.
The Army’s modular restructuring initiative, which began in 2004, is  considered the most extensive reorganization of its force since World War  II. This transformation was initiated, in part, to support current operations  in Iraq and Afghanistan by increasing the number of combat brigades  available for deployment overseas. The foundation of modular  restructuring is the creation of new, standardized, modular units that  change the Army’s legacy division-based force structure to smaller more  numerous brigade formations embedded with significant support  elements. A key goal of the modularity initiative is for modular brigades to  have at least the same combat capability as a brigade under the division- based force. The new modular brigades are expected to be as capable as  the Army’s existing brigades partly because they will have different  equipment including key enablers such as advanced communications and  surveillance equipment. Moreover, in contrast to the Army’s previous  division-based force, modular National Guard and Army Reserve units will  have the same design, organizational structure, and equipment as their  active component counterparts. In addition, the Secretary of Defense  announced in January 2007 an initiative to expand the Army by adding  more than 74,200 soldiers and thereby creating six active brigade combat  teams and additional modular support units. This planned expansion is  intended to allow the Army to revitalize and balance the force, reduce  deployment periods, increase time soldiers spend at home station in  between deployments, increase capability, and strengthen the systems that  support the forces.
The Army relies on equipment reset and prepositioned equipment to  improve equipment availability. Reset is the repair, replacement, and  modernization of equipment that has been damaged or lost as a result of  combat operations. The Army prepositioned equipment program is an  important part of DOD’s overall strategic mobility framework. The Army  prepositions equipment at diverse strategic locations around the world in  order to field combat-ready forces in days rather than the weeks it would  take if equipment had to be moved from the United States to the location  of the conflict.
section_title: Total Costs to Fully Equip the Army Are Uncertain
paragraphs: The total cost to restructure and rebuild the Army is uncertain but this  effort will likely require many billions of dollars and take at least several  more years to complete. Our analysis of Army cost estimates and cost data  indicate that it is likely to cost at least $190 billion dollars to equip  modular units, expand the force, reset equipment, and replace  prepositioned equipment from fiscal years 2004 through 2013. However,  these estimates have limitations and could change. For example, the Army  is likely to continue to have shortfalls of some key equipment beyond then  and believes it will require additional funding to equip modular units  through fiscal year 2017.
subsections: section_title: Information on Army Equipping-Related Costs for Key Initiatives Is Available but Some Estimates Are Incomplete or May Change
paragraphs: Although the Army has not identified a total aggregate cost for its key  equipping initiatives, it has previously reported some cost estimates and  cost data for equipping modular units, expanding the Army, resetting  equipment, and restoring pre-positioned stocks. However, these estimates  have some limitations because they are based on incomplete information,  have not been updated, or may change as a result of the evolving nature  and unknown duration of ongoing operations in Iraq and Afghanistan. As a  result, the full costs of these equipping efforts are unclear but will be  substantial. Based on our analysis of various sources of Army cost data, it  appears that the cost of these initiatives will exceed $190 billion dollars  between fiscal years 2004-2013 (see table 1). These figures do not include  data on Army longer term transformation efforts such as the Army’s  Future Combat System.
The John Warner National Defense Authorization Act for Fiscal Year 2007  required the Army to report annually on its progress toward fulfilling  requirements for equipment reset, equipping of units transforming to  modularity, and reconstitution of equipment in prepositioned stocks. In its  February 2008 report, the Army stated that there is no longer a  distinguishable difference between equipment purchased for modular  restructuring and other modernized fielding. The report does not address  future costs in detail, nor does it provide significant detail about progress  achieved to date with funds that have already been appropriated. As a  result, it is becoming increasingly difficult to track overall progress and  costs. The following sections further describe the cost and status of the  Army’s key initiatives including modular restructuring, expanding the  force, resetting equipment, and restoring pre-positioned stocks. These  initiatives will drive much of the costs of equipping the Army for the next  several years.
section_title: Army Has Made Progress in Establishing Modular Units but Meeting Active and Reserve Component Modular Equipment Requirements May Cost Billions More than Originally Estimated
paragraphs: The Army has made progress establishing modular units but this initiative  will likely cost billions more than the Army originally estimated because  the Army’s estimate was based on some assumptions that no longer  appear valid and was developed before some modular unit designs had  been finalized. As a result, the Army now believes it will require additional  funding through fiscal year 2017 to equip its modular units. However, it  has not revised its 2005 cost estimate to reflect this. Moreover, because it  will take time to procure equipment once funds are appropriated, units  may not receive all scheduled equipment until 2019.
In early 2005, the Army estimated that converting the Army to a modular  design would cost approximately $52.5 billion from fiscal years 2005-2011,  which was incorporated in a funding plan approved by the Office of the  Secretary of Defense. The funding plan included costs for equipment,  sustainment and training, and construction/facilities. As shown in table 2,  most of these funds—$43.6 billion—were designated for equipment  purchases.
The Army made the decision to create modular units knowing that it  would take several years after units were established to equip and staff  them at authorized levels. At the end of fiscal year 2007, the Army had  converted about two-thirds of its force to modular units. By the end of  fiscal year 2008, the Army projects it will have converted 277 of 327  modular units (about 85 percent). The Army currently projects that the  unit restructuring will be completed by fiscal year 2013. However, our  ongoing work shows that the Army will continue to have significant  shortfalls of key equipment that are critical to achieving the planned  benefits of the modular force after the Army receives planned funding for  fiscal years 2005-2011. For example, the Army projects that it will still need  hundreds of thousands of modern equipment items including intelligence  equipment, advanced radios, and trucks. In place of more modern  equipment, many Army units will continue to have some older equipment  that does not necessarily provide the same capability as the more modern  counterparts.
The Army has stated that it plans to request funds through 2017 to help fill  modular unit equipment shortfalls. However, it has not revised its initial  $43.6 billion estimate, even though it was based upon several assumptions  that no longer appear valid. Specifically, we have reported that the Army  believes it will need additional funding to equip modular units because its  2005-2011 funding plan:    was developed before some modular unit designs had been finalized,    assumed that Army National Guard and reserve units would retain some  older models of equipment, and    assumed that significant quantities of equipment would be returned from  Iraq in good enough condition to help equip modular units.
Additional explanation of each of these factors follows.
At the time the Army’s cost estimate was developed, the Army’s modular  designs were incomplete, so budget analysts were uncertain about the  exact number of personnel and how many and what type of equipment  items would be needed for modular units. For example, on the basis of  lessons learned, the Army has reconfigured some of the modular unit  designs and has added additional capabilities for force protection and  route clearance to counter specific threats faced by deployed units.  Further, because the number and composition of National Guard units had  not been developed, budget analysts made certain assumptions about how  much funding would be required by National Guard units to convert to the  new modular designs. When the Army began to implement its modular  restructuring initiative, it planned for the National Guard to establish 34  Brigade Combat Teams plus an additional number of support brigades.  The 2006 Quadrennial Defense Review, however, recommended that the  Army establish only 28 Brigade Combat Teams and convert the remaining  units to support brigades.
In addition, the Army’s original plan for equipping modular units also did  not fully consider the equipping implications associated with the Army  National Guard’s changing role in supporting military operations. Since  2001, the Army National Guard’s role has changed from a strategic reserve  force to an operational force that is used to support a wide range of  military operations at home and abroad. Prior to 2001, Army National  Guard units were generally equipped with older equipment and at lower  levels than comparable active duty units because it was assumed that they  would have considerable warning and training time before deploying  overseas. However, senior Army officials have determined that the  National Guard’s modular units should be structured like those in the  active component and receive similar equipment since the Guard has  become an operational force that deploys along with active units. As a  result, senior Army officials have stated the Army plans to request  additional funds for Army National Guard equipment. In addition, the  Army National Guard also has significant domestic missions, and  equipment needs for those missions are uncertain. In January 2007 we  issued a report on actions needed to address National Guard domestic  equipment requirements and readiness. We found that DOD has not  worked with the Department of Homeland Security to define National  Guard requirements for responding to the 15 catastrophic scenarios  developed by the Homeland Security Council. As a result, the equipment  requirements and the funding needed to provide equipment for such  missions are unknown.
Last, when developing its cost estimate for equipping modular units, the  Army assumed that significant quantities of equipment would come back  from Iraq and be available after some reset and repair work to be  distributed to new modular units. Given the heavy use of equipment in Iraq  and Afghanistan, this assumption may no longer be valid. The increased  demands for equipment used in Iraq operations have had a dramatic effect  on equipment availability. This demand reduces expected service life,  creates significant repair expenses, and creates uncertainty as to whether  it is economically feasible to repair and reset these vehicles. Further, more  vehicles currently being operated in theater may be replaced altogether by  newer vehicles offering better protection.
section_title: Equipment Costs to Expand the Force Are Significant
paragraphs: DOD’s plan to expand the size of the Army by over 74,000 personnel will  also add to the Army’s equipment needs. This planned expansion includes  building six additional active modular infantry brigade combat teams and  some additional modular support units. In January 2007, the Army  estimated that this expansion would cost approximately $70.2 billion  including personnel, equipment, facilities, and other costs. The equipment  portion of this estimate was $17.9 billion. However, in January 2008, we  reported that the Army’s overall estimate was not transparent or  comprehensive. We also found that certain aspects of the estimate, such  as health care costs, may be understated and that some factors that could  potentially affect the Army’s funding plan are still evolving. With regard to  equipment costs, we could not determine how the Army calculated its  procurement estimate because Army budget documents do not identify  key assumptions or the steps used to develop the estimate. According to  best practices, high-quality cost estimates use repeatable methods that will  result in estimates that are comprehensive and can also be easily and  clearly traced, replicated, and updated. Given the magnitude of the Army’s  funding plan and potential changes to the plan, we recommended that the  Secretary of Defense direct the Secretary of the Army to provide Congress  with a revised funding plan for expanding the force and adhere to a high  quality cost estimating methodology. In February 2008, the Army revised  its overall cost estimate for expanding the force to $72.5 billion. According  to Army documents, the Army now assumes that $18.5 billion will be  needed to procure equipment for combat brigades and support units being  created under the Army’s expansion efforts.
Finally, in October 2007, the Army also announced a plan to accelerate the  expansion implementation timelines for the active Army and Army  National Guard from fiscal year 2013 to fiscal year 2010 which will likely  further exacerbate equipment shortfalls. The Army has not yet developed a  revised funding plan for implementing this acceleration but plans to do so  as part of its effort to prepare its fiscal years 2010-2015 budget plan later  this year. As a result, it is not clear how the decision to accelerate the  expansion effort will affect equipment costs.
section_title: Equipment Reset Costs Are Growing
paragraphs: To improve near-term readiness of nondeployed units, the Army has  received substantial funds in recent years to rebuild the force by resetting  damaged, and worn equipment and reconstituting its prepositioned  equipment sets. However, the Army has not identified the overall  requirements for these efforts, and the total cost of these initiatives is  uncertain. In addition to procuring new equipment, the Army is working to  rebuild the force by resetting its existing equipment to support the ongoing  conflicts as well as to equip nondeployed units. Originally, the Army  estimated that equipment reset would cost $12 billion to $13 billion per  year. Reset costs have grown significantly from about $3.3 billion in fiscal  year 2004 to more than $17 billion in fiscal year 2007. Our analysis of Army  data shows that the Army is likely to require at least $118.5 billion dollars  from fiscal years 2004-2013 (see table 1). The Army has reported  that  future reset costs will depend on the amount of forces committed, the  activity level of those forces, and the amount of destroyed, damaged or  excessively worn equipment. As a result, these costs are uncertain. The  Army has stated that it will require reset funding for the duration of  operations and estimates that it will request reset funding for an additional  2-3 years after operations cease. As operations continue in Iraq and  Afghanistan and the Army’s equipment reset requirements increase, the  potential for reset costs to significantly increase in future DOD  supplemental budget requests also increases.
We have also reported that Congress may not have the visibility it needs to  exercise effective oversight and to determine if the amount of funding  appropriated for equipment reset has been most appropriately used for the  purposes intended because the Army was not required to report the  obligation and expenditure of funds appropriated for reset in the  procurement accounts at a level of detail similar to the level of detail  reported in the operation and maintenance accounts. Given the  substantial amount of equipment deployed overseas, the uncertain length  of operations in Iraq and Afghanistan, and the lack of transparency and  accountability, it is unclear how much funding the Army will need to reset  its equipment. While Army officials recently told us that they have begun  to report procurement obligations and expenditures at a level of detail  similar to the level of detail reported for operation and maintenance  accounts, officials in the Office of the Secretary of Defense believe that all  of the Army’s equipping initiatives, including reset, are part of a larger  Army equipping effort and they do not believe that the department needs  to track these initiatives separately. We continue to believe that tracking  the cost of reset is key to identifying the total cost of the Army equipment  plan.
section_title: Timing and Cost of Reconstituting Prepositioned Stocks Is Unclear
paragraphs: In December 2006, the Army decided to remove equipment from its  prepositioned sets stored on ships in order to accelerate the creation of  two additional brigade combat teams to provide support for ongoing  operations. This equipment supplemented equipment prepositioned in  Southwest Asia, equipment which has been depleted and reconstituted  several times over the course of these operations. It is still unclear when  these critical reserve stocks will be reconstituted or how much this will  cost; however, the Army has estimated it will require at least $10.6 billion  to complete this reconstitution effort through 2013 (see table 1). Army  officials stated that prepositioned equipment sets worldwide would be  reconstituted in synchronization with the Army’s overall equipping  priorities, when properly funded, and in accordance with the Army’s  prepositioning strategy, known as the Army Prepositioned Strategy 2015.  We recommended in our September 2005 and February 2007 reports that  DOD develop a coordinated, department-wide plan and joint doctrine for  the department’s prepositioning programs. Synchronizing a DOD-wide  strategy with the Army’s prepositioning strategy would ensure that future  investments made for the Army’s prepositioning program would properly  align with the anticipated DOD-wide strategy. Without a DOD-wide  strategy, DOD risks inconsistencies between the Army’s and the other  services’ prepositioning strategies, which may result in duplication of  efforts and resources.
In addition, we could not determine the extent to which the reconstitution  of the Army’s prepositioned stocks is reflected in DOD funding requests  nor identify the cost estimates for restoring these prepositioned equipment  sets. For example, Army officials could not provide a breakdown of the  $3.3 billion cost estimate in the fiscal year 2007 supplemental budget  request to reconstitute the prepositioned stocks removed from ships.  Army officials stated that the estimated cost to fully implement the  prepositioning strategy would total somewhere between $10.6 billion and  $12.8 billion between fiscal years 2008 and 2013. However, DOD’s funding  requests for reconstitution are difficult to evaluate because they may also  include funding for other equipment-related funding requests, such as  Army modularity, equipment modernization, equipment reset, or requests  to fill equipment shortages. Army officials stated that separating  prepositioning requirements from other requirements in their funding  requests is complicated, and they do not plan to separately track funds set  aside for the reconstitution of their prepositioned equipment sets.
section_title: The Army Lacks a Strategic Approach That Promotes Transparency and Ensures That Equipment Investments Are Based on Sound Plans
paragraphs: A common theme in our work has been the need for DOD and the Army to  take a more strategic approach to decision making that promotes  transparency and ensures that programs and investments are based on  sound plans with measurable, realistic goals and time frames, prioritized  resource needs, and performance measures to gauge progress. Our prior  work has found that a lack of clear linkages between overall Army  equipment requirements and funding needs is an impediment to effective  oversight of the Army’s equipping plans. Further, transparency of the  funds requested for Army equipment is hindered because Army funding  needs are scattered across multiple funding requests. Finally, we have  suggested a number of actions to enhance transparency and reduce the  risks associated with Army equipping initiatives. However, many of these  recommendations have not been adopted and, as a result, the Army faces  uncertainties going forward.
subsections: section_title: Lack of Clear Linkage between Equipment Requirements and Funding Impedes Program Oversight
paragraphs: The Army has not clearly linked its overall equipment requirements with  funding requests. Our work has shown that major transformation  initiatives have a greater chance of success when their funding plans are  transparent, analytically based, executable, and link to the initiative’s  implementation plans. A lack of linkage between overall Army equipment  requirements and funding plans impedes oversight by DOD and  congressional decision-makers because it does not provide a means to  measure the Army’s progress toward meeting long-term Army equipment  goals or to inform decisions that must be made today.
Our work on modular restructuring has shown that the Army has  substantially revised its timeline for fully equipping units from an original  date of 2011 to 2019 but has not provided evidence of its overall equipment  requirements or specific plans, milestones, or resources required to fully  equip the modular force. Meanwhile, the Army is working to expand its  force beyond its original modular restructuring goals, which will lead to  billions of additional dollars in requirements to equip new modular units.
The Army also does not know if its existing prepositioned equipment  requirements reflect actual needs because DOD has not formulated a  DOD-wide prepositioning strategy to guide the Army’s prepositioning  strategy. Army officials stated that its worldwide prepositioned equipment  sets would be reconstituted in synchronization with the Army’s overall  equipping priorities and in accordance with its Army Prepositioned  Strategy 2015. However, the Army had not established those priorities as  of December 2007. Additionally, the Army Prepositioned Strategy 2015 is  not correlated with a DOD-wide prepositioning strategy, because,  according to DOD officials, a DOD-wide prepositioning strategy does not  exist. DOD officials explained that the services are responsible for  equipping strategies and that the Joint Staff conducts assessments of the  services’ prepositioning programs to determine their relationship within  the DOD-wide strategic context. We continue to believe, however, that a  DOD-wide strategy is needed in addition to an Army strategy.
Finally, the Army’s reset implementation strategy is based on resetting  equipment that it expects will be returning in a given fiscal year, and not  on targeting shortages of equipment for units preparing for deployment to  Iraq and Afghanistan. According to the Army’s Army Force Generation  model implementation strategy and reset implementation guidance, the  primary goal of reset is to prepare units for deployment and to improve  next-to-deploy units’ equipment-on-hand levels. Until the Army’s reset  implementation strategy targets shortages of equipment needed to equip  units preparing for deployment, the Army will be unable to minimize  operational risk by ensuring that the needs of deploying units can be met.
Oversight of the Army’s key equipment initiatives has been complicated by  multiple funding requests. DOD requested operation and maintenance  funds for Army prepositioned equipment in both the fiscal year 2008  annual budget request (about $156 million) and the fiscal year 2008 request  related to the Global War on Terror (about $300 million). Army officials  stated that there could be some overlap between funds requested for  reconstitution of prepositioned equipment in the annual budget request  and the reset of prepositioned equipment in the supplemental request.  Without integrating the full costs for Army equipment needs in a single  budget, decision makers may have difficulty seeing the complete picture of  the Army’s funding needs and the potential for trade-offs among  competing defense priorities.
section_title: Actions Needed to Improve Management Controls and Improve Transparency of Army Equipping Efforts
paragraphs: We have recommended a number of actions intended to improve  management controls and enhance transparency of funding requests  associated with modular restructuring, force expansion, equipment reset,  and prepositioning of equipment stock. However, many of these  recommendations have not been adopted because the Army has not  developed concrete plans to address the recommendations and in some  cases, disagreed with our recommendations. As a result, senior DOD  leaders and Congress may not have sufficient information to assess  progress and fully evaluate the Army’s funding requests.
Our prior reports on the Army’s modular restructuring initiative  recommended that the Army improve the transparency of its equipment  requirements and funding plans as well as its plan to assess the modular  unit designs. In recent years, we recommended the Army develop a  comprehensive strategy and funding plan that details the Army’s equipping  strategy, compares equipment plans with modular unit designs, identifies  total funding needs, and includes a mechanism for measuring progress in  staffing and equipping its modular units. We have also recommended that  the Army develop a comprehensive assessment plan that includes steps to  evaluate modular units in full-spectrum combat. In January 2008, we  recommended that DOD provide Congress with additional information on  the Army’s expansion initiative, including an updated funding plan and  that the Army maintain a transparent audit trail including documentation  of the steps used to develop its expansion funding plan.
We have also made recommendations intended to address short and long- term operational risks associated with Army equipment reset and  prepositioning strategies. Regarding the Army’s equipment reset plans, we  recommended in September 2007 that the Army ensure that its priorities  address equipment shortages in the near term to minimize operational risk  and ensure that the needs of units preparing for deployment can be met.  Finally, with regard to prepositioned equipment, we recommended the  establishment of a DOD-wide prepositioning strategy to ensure that future  Army prepositioning investments are aligned with DOD’s prepositioning  goals. We continue to believe that our recommendations have merit,  though many of these recommendations have not been adopted and, as a  result, the Army faces uncertainties going forward.
section_title: Concluding Observations
paragraphs: Restoring equipment readiness across the Army will require billions of  dollars in maintenance and procurement funding but the full cost—and  how long it will take—are still unclear. The uncertainty about the  magnitude and duration of our military commitments further complicates  and deepens the equipping challenges facing the Army. Moreover, growing  fiscal problems facing the nation may lead to growing pressure on defense  budgets. Such uncertainty about the future underscores the need for  sound management approaches like setting goals, establishing clear  measures to track progress, and identifying full costs. Until these steps are  taken, decision makers will lack key information needed to gauge interim  progress and make informed choices aimed at balancing the need to  restore near-term readiness while positioning the Army for the future.
Mr. Chairman and Members of the Committee, this concludes my  statement. I would be pleased to respond to any question you or other  Members of the Committee or Subcommittee may have.
section_title: Contacts and Acknowledgments
paragraphs: For questions regarding this testimony, please call Janet A. St. Laurent at  (202) 512-4402 or stlaurentj@gao.gov. Key contributors to this testimony  were John Pendleton, Director; Wendy Jaffe, Assistant Director; Kelly  Baumgartner; Grace Coleman; Barbara Gannon; David Hubbell; Kevin  O’Neill; Steve Rabinowitz; Terry Richardson; Donna Rogers; Kathryn  Smith; Karen Thornton; and Suzanne Wren. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this testimony.
section_title: Related GAO Products
paragraphs: The Nation’s Long-Term Fiscal Outlook: January 2008 Update. GAO-08- 591R. Washington, D.C.: March 21, 2008.
Military Readiness: Impact of Current Operations and Actions Needed  to Rebuild Readiness of U.S. Ground Forces. GAO-08-497T. Washington,  D.C.: February 14, 2008.
Defense Logistics: Army Has Not Fully Planned or Budgeted for the  Reconstitution of Its Afloat Prepositioned Stocks. GAO-08-257R.  Washington, D.C.: February 8, 2008.
Force Structure: Need for Greater Transparency for the Army’s Grow the  Force Initiative Funding Plan. GAO-08-354R. Washington, D.C.: January  18, 2008.
Force Structure: Better Management Controls Are Needed to Oversee the  Army’s Modular Force and Expansion Initiatives and Improve  Accountability for Results. GAO-08-145. Washington, D.C.: December 14,  2007.
Defense Logistics: Army and Marine Corps Cannot Be Assured That  Equipment Reset Strategies Will Sustain Equipment Availability While  Meeting Ongoing Operational Requirements. GAO-07-814. Washington,  D.C.: September 19, 2007.
Military Training: Actions Needed to More Fully Develop the Army’s  Strategy for Training Modular Brigades and Address Implementation  Challenges. GAO-07-936. Washington, D.C.: August 6, 2007.
Defense Logistics: Improved Oversight and Increased Coordination  Needed to Ensure Viability of the Army’s Prepositioning Strategy. GAO- 07-144. Washington, D.C.: February 15, 2007.
Defense Logistics: Preliminary Observations on the Army’s  Implementation of Its Equipment Reset Strategies. GAO-07-439T.  Washington, D.C.: January 31, 2007.
Reserve Forces: Actions Needed to Identify National Guard Domestic  Equipment Requirements and Readiness. GAO-07-60. Washington, D.C.:  January 26, 2007.
Force Structure: Army Needs to Provide DOD and Congress More  Visibility Regarding Modular Force Capabilities and Implementation  Plans. GAO-06-745. Washington, D.C.: September 6, 2006.
Force Structure: Capabilities and Cost of Army Modular Force Remain  Uncertain. GAO-06-548T. Washington, D.C.: April 4, 2006.
Defense Logistics: Preliminary Observations on Equipment Reset  Challenges and Issues for the Army and Marine Corps. GAO-06-604T.  Washington, D.C.: March 30, 2006.
Reserve Forces: Plans Needed to Improve Army National Guard  Equipment Readiness and Better Integrate Guard into Army Force  Transformation Initiatives. GAO-06-111. Washington, D.C.: October, 4  2005.
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