Force Structure: Preliminary Observations on Army Plans to Implement and Fund Modular Forces
Published: 2005-03-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Modularity is a major restructuring of the entire Army, involving the creation of brigade combat teams that will have a common design and will increase the pool of available units for deployment. The Army is undertaking this initiative at the same time it is supporting the Global War on Terrorism, and developing transformational capabilities such as the Army Future Combat Systems. To achieve modularity, the Army currently estimates it will need $48 billion. The Department of Defense's (DOD) request for fiscal year 2005 supplemental funds includes $5 billion for modularity. The Army plans for another $5 billion to be funded from fiscal year 2006 supplemental funds and the remaining $38 billion from DOD's annual appropriation from fiscal years 2006 through 2011. Our testimony addresses: (1) the Army's goals and plans for modularity, (2) challenges the Army faces in staffing and equipping its modular combat brigades, (3) key decisions that could affect requirements, and (4) the Army's cost estimates and funding plans. This testimony is based on ongoing GAO work examining Army modularity plans and costs. Our work has been primarily focused on the Army's active forces.
section_title: What GAO Found
paragraphs: The Army has embarked on a major initiative to create modular units to better meet the near-term demand for forces and improve its capabilities to conduct full-spectrum operations. Modularity is a major undertaking because it affects both the active and reserve components as well as combat and support forces. Successfully implementing this initiative will require many changes such as new equipment and facilities, a different mix of skills among Army personnel, and significant changes to training and doctrine. By the end of fiscal year 2006, the Army plans to reorganize its 10 active divisions, expanding from 33 brigades to 43 modular brigade combat teams, and by fiscal year 2010, create new types of command headquarters. The Army has completed or is in the process of establishing modular brigades in four of its active divisions. While the Army has made progress in establishing modular brigades, it is likely to face several challenges in providing its new modular units with some required skilled personnel and equipment that are needed to achieve planned capabilities. For example, the Army has not provided its new modular brigades with required quantities of critical equipment such as unmanned aerial vehicles, communications equipment, and trucks because they are not currently available in sufficient quantities. Moreover, it may take years to meet increased requirements for critical skills such as military intelligence analysts because they are in high demand and take years to train. In addition, the Army has not yet made a number of key decisions that could further increase requirements for equipment and personnel. First, the Army has not yet decided whether to recommend an increase in the number of active brigade combat teams from 43 to 48. Also, it is assessing the costs and benefits of adding one more combat maneuver battalion to its new modular brigades. Finally, the Army has not yet finalized the design of higher echelon and support units. Until designs are finalized and key decisions are reached, the Army will not have a complete understanding of the equipment and personnel that are needed to fully achieve its goals. The costs associated with modularizing the entire Army are substantial, continuing to evolve, and likely to grow beyond current estimates. As of March 2005, the Army estimated it will need about $48 billion to fund modularity--representing an increase of 71 percent from its earlier estimate of $28 billion in 2004. However, this estimate may not reflect all potential costs, such as for fully equipping the modular force as designed. Also, if the Army decides to add additional brigades or make other design changes, additional costs may be incurred. Furthermore, some costs are uncertain. For example, it will be difficult for the Army to determine facility requirements and related costs until DOD finalizes plans for restationing forces from overseas. Until the Army provides a better understanding of the requirements and costs associated with modularity, DOD will not be well positioned to weigh competing priorities and make informed decisions nor will the Congress have the information it needs to evaluate funding requests.

section_title: Letter
paragraphs: We are pleased to be here today to discuss our ongoing work on the Army’s  modular force initiative. The Army considers modular force transformation  to be the most extensive reorganization of its force since World War II,  requiring large investments in personnel and equipment to restructure its  force, now organized in divisions, to a modular brigade-based force.  Because the Army is undertaking this effort while executing the Global War  on Terrorism and developing other new capabilities such as the Future  Combat Systems, the Department of Defense (DOD) may face some long- term affordability challenges as it moves forward with these and other  initiatives. In other testimony today, we will address our ongoing work on  Future Combat Systems.
As part of this hearing, you asked us to discuss our preliminary  observations based on our ongoing work that focuses on the Army’s  implementation and challenges of achieving a modular force, and the cost  implications of this major initiative. Specifically, our testimony today will  address (1) the Army’s goals for modularity and its plan for carrying out  this reorganization, (2) potential challenges the Army may face in staffing  and equipping brigades that are being created from the Army’s existing  division-based force, (3) key decisions that could further affect modularity  requirements, and (4) the Army’s cost estimates for modularity and its plan  for funding these costs.
The information we will discuss on modularity is based on our preliminary  work focusing on the active Army. We plan to issue a report later this year.  To address Army implementation plans and costs, we conducted interviews  with and reviewed documents from the Army Staff, the Army Budget  Office, U.S. Army Forces Command, the U.S. Army Training and Doctrine  Command, and the U.S. Army Force Management Support Agency. In  addition, we visited the 3rd Infantry Division and the 101st Airborne  Division, which are among the first active combat divisions to undergo  modular conversion.
We conducted our work from August 2004 to March 2005 in accordance  with generally accepted government auditing standards.
subsections: section_title: Army Modularity Is a Significant Undertaking
paragraphs: The Army’s modular force initiative, which has been referred to as the  largest Army reorganization in 50 years, encompasses the Army’s total  force--active Army, National Guard, and Army Reserve—and directly  affects not only the Army’s combat units, but related support and command  and control. Restructuring its units is a major undertaking and requires  more than just the movement of personnel or equipment from one unit to  another. The Army’s new designs are equipped and staffed differently than  the units they replace. Therefore, successful implementation of this  initiative will require many changes such as new equipment and facilities, a  different mix of skills and occupational specialties among Army personnel,  and significant changes to training and doctrine.
The foundation of Army modularity is the creation of brigade combat  teams—brigade-sized units that will have a common organizational design  and will increase the pool of available units for deployment. The Army  believes a brigade-based force will make it more agile and deployable and  better able to meet combatant commander requirements. Not only does the  Army expect to produce more combat brigades after its restructuring, it  believes the brigades will be capable of independent action by the  introduction of key enablers, such as enhanced military intelligence  capability and communications, and by embedding various combat support  capabilities in the brigade itself instead of at a higher echelon of command.  The Army’s goal is for each new modular brigade combat team, which will  include about 3000-4000 personnel, to have at least the same combat  capability as a brigade under the current division-based force, which  ranges from 3000 to 5000 personnel. Since there will be more combat  brigades in the force, the Army believes its overall combat capability will  be increased as a result of the restructuring, providing added value to  combatant commanders.
By the end of fiscal year 2006, the Army plans to reorganize its 10 active  divisions, expanding from the current 33 to 43 modular, standardized  brigade combat teams and creating new types of command headquarters to  replace the current division headquarters structure. According to Army  officials, this is a very quick pace for a restructuring of this magnitude. The  Army has already begun the conversion with 4 divisions: the 3rd Infantry  and the 101st Airborne Divisions, which we have visited, the 4th Infantry  Division which we plan to visit this spring, and the 10th Mountain Division.  The 3rd Infantry Division has redeployed back to Iraq in its new  configuration, and the 101st is scheduled to redeploy later this year.
The Army’s organizational designs for the brigade combat teams have been  tested by its Training and Doctrine Command’s Analysis Center at Fort  Leavenworth against a variety of scenarios and the Army has found the new  designs to be as effective as the existing brigades in modeling and  simulation. During the next few years, the Army plans to collect lessons  learned from deployments and major training exercises and make  appropriate refinements to its unit designs, equipment requirements, and  doctrine.
By fiscal years 2009-10, the Army plans to complete the creation of  modular, standardized supporting brigades as well as a reorganization of its  Corps and theater-level command and support structures. Ninety-two  support brigades and five higher echelon headquarters will be included in  this initiative—yet another indication of the far-reaching nature of the  Army’s modularity plan.
Although our work has focused on the active component, restructuring of  the reserve component into modular units will also be a major undertaking.  The Army plans to convert the National Guard’s existing 38 brigades into 34  modular brigade combat teams by fiscal year 2010. However, the Army is  considering accelerating this schedule, according to Army officials. In  addition, the Army Reserve will have to realign its support units in  accordance with new modular designs. Like the active component, the  reserves will have to manage these conversions to the new modular  organizations while continuing to provide forces to Iraq.
Because of the high degree of complexity associated with establishing a  modular force while managing deployments to ongoing operations, the  Army has developed a number of plans and processes, such as the Army  Campaign Plan and has held periodic meetings within the Army  headquarters and its components and major commands, to manage these  changes. The Army’s senior leadership is playing a key role in these  processes.
section_title: Army May Face Challenges in Staffing and Equipping Modular Brigade Combat Teams
paragraphs: The Army is likely to face a number of challenges in fully staffing and  equipping modular combat brigades as designed. Although somewhat  smaller in size, the new modular brigades are expected to be as capable as  the Army’s existing brigades because they will have different equipment,  such as advanced communications and surveillance equipment, and a  different mix of personnel and support assets. Although the Army has an  approved and tested design for the new modular brigades, it has also  established a modified list of equipment and personnel that it can  reasonably expect to provide to units undergoing conversion based on its  current inventory of equipment, planned procurement pipelines, and other  factors such as expected funding. The Army expects to use this modified  list of equipment and personnel to guide the conversion of existing  divisions to modular brigades for the foreseeable future. Our preliminary  work indicates significant shortfalls in the Army’s capacity to equip and  staff units, even at modified levels.
For example, according to Army officials, modular brigade combat teams  will require additional soldiers in personnel specialties such as military  intelligence, truck drivers, civil affairs, and military police to achieve the  planned capability. Military intelligence is one of the most critical of these  specialties because military intelligence enables brigade combat teams to  conduct 24-hour combat operations, cover highly dispersed battlespaces,  and increase force protection. According to Army officials, the Army needs  to add 2800 military intelligence specialists by the end of fiscal year 2005 to  meet near-term military intelligence shortages. Moreover, the Army needs  an additional 6200 military intelligence specialists through fiscal year 2010  to meet modular force requirements. Providing additional military  intelligence specialists, particularly at the more senior levels, may take  several years because of the extensive training required. At the time of our  visit, the 3rd Infantry Division’s four brigade combat teams each had less  than 50 percent of their military intelligence positions filled. Although the  Army was later able to fill the division’s needs by reassigning military  intelligence specialists from other units prior to its deployment to Iraq in  January 2005, many of these soldiers were redeployed after just having  returned from overseas. Moreover, transferring soldiers from other units  may make it more difficult for the Army to fill positions in the remaining  divisions scheduled to be restructured. We are continuing to follow up on  Army actions to address these shortages.
Similarly, modular brigade combat teams require significant increases in  the levels of equipment, particularly command, control, and  communications equipment; wheeled vehicles; and artillery and mortars.  Examples of command, control, and communications equipment that are  key enablers for the modular brigade combat teams include advanced  radios, Joint Network Node systems, ground sensors such as the  Long-Range Advanced Scout Surveillance System, and Blue Force Tracker,  among others. This critical equipment makes possible the joint network  communications, information superiority, and logistical operations over a  large, dispersed battlespace in which modular forces are being designed to  effectively operate. Although the Army has some of this equipment  on hand, the levels being fielded to brigade combat teams are well below  the levels tested by the Training and Doctrine Command. As a result,  officials from both divisions we visited expressed concern over their  soldiers’ ability to train and become proficient with some of this high-tech  equipment because the equipment is not available in sufficient numbers.
Moreover, it is not clear yet how the Army plans to bring brigades that have  already undergone modular conversion up to Training and Doctrine  Command tested levels of personnel and equipment following their  deployments. For example, the design requires a division with four  modular brigade combat teams to have approximately 28 tactical  unmanned aerial vehicle systems. These systems provide surveillance and  reconnaissance for soldiers on the battlefield and enable them to more  safely carry out their missions. However, because of current shortages, the  3rd Infantry Division and the 101st Airborne Division are only authorized to  have 4 systems, and at the time of our visits, the 3rd Infantry Division had  1 and the 101st Airborne had none on hand. The Army requested funding for  only 13 of these systems in the fiscal year 2005 supplemental appropriation  request to the Congress; thus, it remains unclear as to when the 3rd Infantry  Division or the 101st Airborne Divisions will receive their full complement  of tactical unmanned aerial vehicle systems. Also, the Army may continue  to provide other divisions undergoing conversion with limited quantities  that fall short of the design requirement.
section_title: Army Faces a Number of Key Decisions That Could Affect Modular Force Requirements
paragraphs: According to Army modularity plans, the Army is continuing to assess its  requirements and may make some key decisions in the future that will  affect the size and composition of the modular force as well as its cost.  First, the Army’s Campaign Plan calls for a potential decision by fiscal year  2006 on whether to create 5 additional modular brigade combat teams.  Adding 5 brigades would provide additional capability to execute the  defense strategy but would require additional restructuring of people and  equipment. Second, according to the 2004 Army Transformation Roadmap,  the Army is evaluating whether to add a third maneuver battalion to  brigade combat teams in fiscal year 2007 to prepare for the fielding of the  Future Combat Systems Units of Action, which are designed with three  maneuver battalions. Additionally, according to the Army’s Training and  Doctrine Command, early testing demonstrates that brigade combat teams  with three maneuver battalions offer distinct advantages over two battalion  formations because they provide robust, flexible, full-spectrum capability.  The command is conducting additional analysis to assess the value and  cost of adding a third combat maneuver battalion to the modular brigade  combat teams. If the Army later decides to add a battalion to some or all of  the 43 or potentially 48 modular brigade combat teams, it will need to  assign thousands of additional soldiers and field additional equipment.
The Army also faces a number of decisions in finalizing its plans for  creating modular support brigades. Modular support brigades that will  replace the current division-based combat service and support structure  are not scheduled to be fully in place until fiscal years 2009-10. The Army  has finalized the designs and requirements for three of the five types of  support brigades, but has not yet made final design decisions for the other  two. The support brigades are key components of the Army’s concept of  modular forces being more responsive and expeditionary than current  forces. Until the modular support brigades are fully organized, equipped,  and functional, the Army’s modular forces would not have these  capabilities, and in the interim, combat service and combat service support  would need to be provided by existing division-based support  organizations. This means that for some time to come, even as the Army  makes progress in achieving greater uniformity across the force, there will  be a number of variations in the size and capability of available support  units. Also, as with the decision to add additional battalions, until the Army  completes all of its force structure designs for support brigades, it will not  have a total picture of its personnel and equipment requirements.
Finally, by fiscal year 2010 the Army plans to complete a reorganization of  its corps and theater-level command and support structure. The Army’s  plans would eliminate an entire echelon of command, moving from four  levels to three and freeing additional personnel spaces that can help meet  some of its modular force personnel requirements. While the Army expects  to achieve efficiencies resulting from the reduction of command and  support structures, their magnitude is not yet known and they may not be  realized for several years. Moreover, while potentially somewhat more  efficient, the new command-level designs are likely to require new  command, control, and communications equipment to enable them to  function in their updated roles, such as providing the basic structure for a  joint headquarters.
section_title: Cost Estimates for Fully Implementing Modularity Have Increased Significantly and Are Still Evolving
paragraphs: The costs of modularity are substantial and are likely to grow. Since 2004,  the Army’s cost estimates have increased significantly. In January 2004, the  Army estimated that increasing the number of active modular brigade  combat teams from 33 to 48 would cost $20 billion from fiscal years 2004  through 2011 based on a “rough order of magnitude estimate.” As of  July 2004, the Army added $8 billion to address costs for reorganizing the  reserve component, bringing the total estimated cost for reorganizing the  entire force to $28 billion. Our preliminary work highlighted several  limitations in this estimate. For example, the July 2004 estimate:   included costs of adding 15 light infantry brigades for the active  component to bring the total number of active brigades to 48, but these  costs were based on the current brigade structure, not the tested  modular design;   did not take into account the costs for upgrading existing active  brigades, or other support and command elements; and   accounted for construction of temporary, relocatable facilities, but did  not allow for permanent upgrades to facilities or increases to other  services provided at Army installations to accommodate the increase in  modular units.
As of March 2005, the Army has revised its earlier estimate, now estimating  that modularity will cost a total of $48 billion from fiscal years 2005 through  2011—an increase of 71 percent over its earlier $28 billion estimate.  According to the Army, this estimate includes costs for a total of 43 active  component brigades—covering upgrades to the existing 33 brigades and  the creation of 10 new brigades—as well as 34 brigades in the reserve  component. During our preliminary work we discussed and obtained  summary information on the types of cost and key assumptions reflected in  the Army’s estimates. However, we were unable to fully evaluate the  estimates because the Army did not have detailed supporting information.
According to Army officials, the Army used the modular design, which has  been informed by combat operations in Iraq, as the basis for developing the  March 2005 revised estimate. They noted the estimate includes costs for  the creation of new brigades as well as upgrades to existing brigades, costs  for support and command elements, and costs for permanent facilities.  However, unlike the original estimate, the current estimate does not  include any personnel costs. According to Army officials, an increase in  personnel endstrength is needed to simultaneously conduct operations and  reorganize into a modular force. They told us these costs were excluded  from the current estimate because it was difficult to differentiate between  endstrength increases associated with conducting operations and those  needed for modularity.
Based on our preliminary review of the Army’s revised estimate and  potential costs associated with modularizing the active component, we  believe there are certain factors that could affect the overall cost for  modularity, including some that will likely make it grow higher than the  current estimate of $48 billion.
First, the Army’s current cost estimate does not use the tested design as  the basis for determining equipment costs. Rather, the estimate reflects  costs for a lesser amount of equipment than called for in the tested  design. According to Army officials, they estimated equipment costs in  this manner because some equipment is not currently available or in  production in sufficient quantities to meet modularity requirements.
Second, if the Army decides to add 5 brigade combat teams to the  current plan and/or an additional maneuver battalion to some or all  brigades, the cost for modularity will increase significantly. For  example, each modular brigade combat team, under the current design,  would require 3,300 to 3,700 soldiers, for a potential total of up to  18,500 soldiers. While at least some of these personnel requirements  could be offset with existing force structure, it is unclear how many  additional soldiers, if any, would be needed. Nonetheless, adding these  brigades to the force structure would add costs for equipment, facilities,  and training.
Finally, the Army’s current cost estimate includes costs for permanent  facilities needed to accommodate the modularized brigade combat  teams. However, according to Army officials, plans for constructing  facilities are uncertain because of pending decisions related to the Base  Realignment and Closure process and the planned restationing of forces  from overseas.
The Army anticipates obtaining funds to pay for this restructuring through  supplemental and annual appropriations. To cover the $48 billion estimate,  current DOD budget plans indicate the Army would receive a total of  $10 billion from supplemental appropriations in fiscal years 2005 and 2006,  and a total of $38 billion from DOD’s annual appropriation for the period of  fiscal years 2006 through 2011. As part of our ongoing work, we will  continue to review the Army’s estimates, cost implications, and funding  plans for modularity.
section_title: Concluding Remarks
paragraphs: The Army views modularity as critical to improving the combat and  support capability of its forces. Restructuring the entire force while  continuing to support ongoing operations poses significant challenges and  will require substantial funds. The magnitude of achieving modularity,  coupled with other ongoing major transformation initiatives, raises  long-term affordability issues for DOD. Until the Army more fully defines  the requirements and potential costs associated with modularity, DOD will  not be well positioned to weigh competing priorities and make informed  decisions, and the Congress will not have all the information it needs to  evaluate funding requests for modularity.
Mr. Chairman and Members of the Committee, this concludes our prepared  remarks. We would be happy to answer any questions you may have.
section_title: Contacts and Staff Acknowledgments
paragraphs: For future questions about this statement, please contact Sharon Pickup at  (202) 512-9619, Janet St. Laurent at (202) 512-4402, or Gwendolyn Jaffe at  (202) 512-4691. Other individuals making key contributions to this  statement include Margaret Best, Alissa Czyz, Kevin Handley, Joah  Iannotta, Harry Jobes, Joseph Kirschbaum, Eric Theus, Jason Venner, and  J. Andrew Walker.