Army Modular Force Structure: Annual Report Generally Met Requirements, but Challenges in Estimating Costs and Assessing Capability Remain
Published: 2014-04-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Army considers its modular force transformation, which began in 2004, to be its most extensive restructuring since World War II. The Army expanded the number of deployable units and incorporated advanced equipment and specialized personnel, but removed a maneuver battalion from its brigades. Throughout the transformation, GAO reported, testified, and made recommendations on associated challenges the Army faced. In 2013, the Army stated it had completed its transformation and submitted its last required report to Congress on its modular progress. It also announced plans to restore a maneuver battalion to most brigades.
Congress mandated that GAO report annually on the Army's modular force. For this report, GAO (1) evaluates whether the Army addressed the legislative requirements in its modular force report and (2) provides an overview of any challenges that the Army faced in its modular force transformation and describes how the Army is addressing these challenges as it implements further changes in its force structure. GAO analyzed the Army's report against the legislative requirements, reviewed key Army reports, and spoke to Army officials.
section_title: What GAO Found
paragraphs: The Army's annual report on its modular force either fully or partially addressed all of the requirements mandated by law. GAO's analysis showed that of the 14 legislative requirements, the report fully addressed 9 and partially addressed 5. The requirements that were fully addressed included an assessment of the modular force capabilities and the status of doctrine for the modular force, among others. Some of the requirements that were partially addressed included information related to risks and mitigation strategies associated with shortfalls; scheduling for repairing, recapitalizing, and replacing equipment; and itemizing information by active-duty and reserve components. The 2013 report provided more thorough information to congressional decision makers on the Army's progress in its modular force transformation than previous reports.
GAO's body of work since 2005 on the Army's modular restructuring found that the Army faced challenges in creating a results-oriented plan, developing realistic cost estimates, and planning comprehensive assessments. GAO made 20 recommendations from 2005 through 2008 to help address these challenges; the Army generally agreed with 18 of the recommendations but so far has implemented only 3. As the Army plans to restructure its modular force it has made some progress in creating a results-oriented plan, but more work remains in developing realistic cost estimates and planning comprehensive assessments.
Creating a results-oriented plan. As the Army plans further changes to its modular force design, it has taken initial steps to create a results-oriented plan by developing a timeline with associated tasks and milestones. When the Army began its modular force transformation it did not create a plan with clear milestones to guide its efforts to fully staff and equip the modular force. By incorporating lessons identified in GAO's prior work as it makes further changes, the Army has established a baseline against which to measure performance and may provide decision makers the ability to mitigate any potential problems that may arise.
Developing realistic cost estimates . From 2005 through 2013, the Army did not create realistic cost estimates or provide a reliable accounting of past spending or future funding needs for implementing its modular force transformation. As the Army plans further changes to its modular force design, it has not developed cost estimates for military construction, personnel relocation, or training for the reorganized units. GAO continues to believe that realistic cost estimates would better position the Army to weigh competing priorities in a fiscally constrained environment and provide Congress with the information needed to evaluate funding requests.
Planning comprehensive assessments. Since 2004, the Army has made many changes to its modular design based on limited assessments, but it has not completed a comprehensive assessment plan to measure the extent that its modular force transformation is meeting performance goals. As the Army continues to make changes to its modular design, the Army plans to conduct assessments but has not identified outcome-oriented metrics to measure progress. If the Army created a comprehensive assessment plan, it could help decision makers identify capability gaps and mitigate risks.
section_title: What GAO Recommends
paragraphs: GAO is not making new recommendations, but this analysis provides additional support for past recommendations to develop realistic cost estimates and to create a comprehensive assessment plan to measure achievement of desired benefits. In oral comments on a draft of this report, the Army concurred with the report.

section_title: Letter
paragraphs: The Army considers its modular force transformation, which began in  2004, to be the most extensive restructuring that it has undertaken since  World War II. The Army’s primary goals in creating modular (i.e.,  standardized) forces were to expand the number of brigades in order to  meet operational requirements and increase the flexibility of its forces. In  creating its new modular force, Army leaders made a controversial  decision to organize the modular force under a two-battalion brigade  combat team formation, moving away from the traditional three-battalion  brigades. Although generally smaller than the brigades they replaced,  modular brigade combat teams were expected to maintain combat  effectiveness equal to or better than the previous division brigades by  using specialized equipment and specialist personnel called “key  enablers.” For example, modular brigade combat teams included  embedded combat support functions, such as military intelligence,  reconnaissance, and logistics. Throughout the Army’s transition to the  modular design, we reported and testified on the Army’s management of  its modular transformation and made 20 recommendations intended to  help the Army improve management controls, enhance transparency, and  reduce the risk associated with modularity costs. In 2013, the Army stated  that its transition to a modular force was completed and, due to  decreasing financial resources and increasing ambiguity regarding future  missions, announced plans to modify its modular brigade combat team  designs to include more engineering capabilities and restore a third  maneuver battalion to most brigades.
The John Warner National Defense Authorization Act for Fiscal Year  2007, as amended by the Ike Skelton National Defense Authorization Act  for Fiscal Year 2011, mandated the Army to report annually on its  progress in fulfilling the requirements for key enablers of modular units  and in repairing, recapitalizing, and replacing items used in support of  overseas contingency operations. The law required the Army’s report to  include, among other things, a comparison of the authorized and on-hand  levels of key enabler equipment, an identification of the risks associated  with shortfalls of equipment and personnel, and mitigation strategies for  addressing those risks. In addition, the law required that the Army’s report  include an assessment of modular force capabilities, the status of the  development of doctrine on the modular force, and comments from both  the National Guard and Army Reserve on all the legislative requirements.  Also, the law mandated us to review the report and to provide information  and any recommendations deemed to be appropriate in light of our  review. In September 2013, the Army issued its fiscal year 2013 report,  which is the last required report on the progress of the modular force. In  our report, we (1) evaluate whether the Army addressed the legislative  requirements in its modular force report and (2) provide an overview of  any challenges that the Army faced in its modular force transformation  and describe how the Army is addressing these challenges as it  implements further changes to its force structure.
To determine the extent to which the Army addressed the legislative  requirements in its modular force report, three GAO analysts  independently reviewed the Army’s fiscal year 2013 report, comparing it  with each element required by the law and determining whether each  required reporting element was included. In the case of any conflicting  determinations, a fourth GAO analyst adjudicated the difference. To gain  a full understanding of the elements included in the annual report and to  discuss the methodology used for collecting information and reporting on  the Army’s progress toward modular restructuring, we met with Army  officials knowledgeable about compiling information for the report,  including individuals from the Department of the Army, Army Training and  Doctrine Command, Army Reserve, and Army National Guard. We also  reviewed related documentation used to compile the report, including a  Director of the Army Staff memorandum to complete the fiscal year 2013  modular report and the list of key enabler personnel and equipment  required to be included in the report. Additionally, we reviewed the Army’s  fiscal year 2012 report on progress in fulfilling modularity requirements to  compare it with the fiscal year 2013 report and to determine the extent of  progress made in fulfilling modularity requirements between fiscal years  2012 and 2013.
For the overview of the challenges related to the Army’s modular force  transformation and how the Army is addressing these challenges, we  reviewed our prior testimonies and reports on modularity. To determine  how the Army is addressing these challenges, we reviewed whether the  Army implemented recommendations made in prior GAO reports  evaluating the Army modular force structure. We reviewed documents  regarding the Army’s changes to its modular force design, including an  analysis supporting the decision to add a third maneuver battalion to most  brigades and the Army Structure Memorandum for fiscal years 2014 to  2019. We also interviewed Army officials from the Department of the  Army and Army Training and Doctrine Command to obtain information on  challenges or lessons learned from the Army’s modular force  transformation, as well as how those lessons learned are being applied to  ongoing efforts to modify the force structure. More details about our  scope and methodology are included in appendix I.
We conducted this performance audit from September 2013 to April 2014  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The Army’s modular force transformation affected the Army’s combat  units and the related command and support organizations in both the  active and reserve components. The Army’s objective in redesigning its  force structure was to create more units to meet operational needs and  be more flexible in deploying independently while maintaining combat  capabilities of division-based brigades. According to the Army, having  more combat brigades with specialized equipment and specialist  personnel would increase combat capability and add value for combatant  commanders. To increase the flexibility of units, the Army standardized  brigade combat teams in one of three designs—armored brigade, infantry  brigade, or Stryker brigade (see fig. 1). The Army’s new modular units  were designed, equipped, and staffed differently than the units they  replaced, and thus the transformation required 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. A key change was the reduction in the number of maneuver  battalions within the modular units from three battalions per brigade under  the division-based organization to two battalions for most brigade combat  teams. Critics of the decision to have only two battalions raised concerns  about whether the new structure would maintain as much combat  capability as the division-based battalion. However, the Army expected to  increase the modular brigade combat teams’ capability through  specialized equipment and personnel, called “key enablers.”
Since 2004, when the Army introduced its modular restructuring initiative,  the Army has made multiple adjustments to its original plans for  restructuring its operational force. The Army’s initial restructuring plan  called for 77 modular brigade combat teams—43 active-duty brigade  combat teams and 34 National Guard brigades. As of fiscal year 2013,  the Army had 71 brigade combat teams, consisting of 43 active-duty  brigade combat teams and 28 National Guard brigades. In 2013, the  Army announced plans for another change in the structure of the modular  force related to the need to reduce the active-duty component from  570,000 to 490,000 soldiers by fiscal year 2015. As figure 2 shows, the  Army plans to reduce the number of active-duty brigade combat teams  from a high of 45 teams to 32 teams by fiscal year 2015. The number of  National Guard brigades would remain at 28, bringing the total of brigade  combat teams to 60. In addition to the reduction in the numbers of  brigade combat teams, the Army plans to refine the designs of the  remaining brigades to add engineering and artillery capabilities, as well as  increase the number of maneuver battalions from two to three for most  brigade combat teams. According to the Army, the modifications to the  modular force would enable it to preserve operational capability and  flexibility, while reducing the number of soldiers in the active-duty  component.
Our body of work on the Army’s modular force transformation includes  seven reports and three testimonies. The related work is listed at the end  of this report. Based on our work, we made several recommendations to  the Secretary of Defense and to the Army intended to improve the  information on the Army’s transition to a modular design that the Army  provided to decision makers in Congress. Because of the magnitude of  the Army’s transformation plans and concerns about their affordability, we  initially conducted work under the Comptroller General’s statutory  authority and examined both the force structure and cost implications of  the Army’s transformation into a modular force. Subsequently, Congress  enacted requirements that the Army submit an annual report on its  progress on its modular force transformation and that we review the  Army’s report. According to the Army, the transition to the modular force  structure, which began in 2004, was completed by the end of fiscal year  2013. The National Defense Authorization Act for Fiscal Year 2014  repealed the requirement for the Army and GAO to prepare annual  reports about the Army’s modular force restructuring.
section_title: Army’s Modular Report Generally Met Legislative Requirements
paragraphs: The Army’s annual report on its modular force generally met legislative  requirements by providing information that either fully or partially  addressed each of the requirements. Our analysis showed that of the 14  legislative requirements, the report fully addressed 9 and partially  addressed 5. The fully addressed requirements included information  related to the status of key enabler personnel and equipment, an  assessment of the modular force capabilities, and the status of doctrine  for the modular force, among others. The partially addressed  requirements included risks associated with shortfalls; mitigation  strategies for shortfalls; scheduling for repairing, recapitalizing, and  replacing equipment; itemizing information by active-duty and reserve  components; and comments by the National Guard and Army Reserve  regarding key enabler personnel and equipment. By fully or partially  addressing the requirements, the Army’s 2013 report provided more  thorough information to congressional decision makers on the Army’s  progress in its modular force transformation than previous reports.
Army officials gave several reasons why the report did not fully address  some of these requirements. For example, the Army’s report discussed  mitigation strategies for personnel shortfalls but not for all equipment  shortfalls. According to Army officials, the Army mitigated risk by  providing equipment to the next deploying units. In other cases, the Army  chose not to mitigate equipment shortfalls due to the costs involved or  because the specific equipment item no longer met the needs of the  modular force. Additionally, the Army did not fully report on a schedule for  the repair of equipment because, according to Army officials, the number  of battle losses and the related amount of wear and tear on equipment  returning from overseas operations was unpredictable. However, the  Army provided some general information about its repair schedule for  fiscal years 2013 and 2014, such as when the Army expects to begin  addressing postcombat equipment repairs. In addition, according to  officials the report did not itemize information by component because the  report included a separate section with comments from the reserve  components. However, the comments by the reserve components did not  include all required information, such as identifying risks and mitigation  strategies associated with equipment shortfalls. Table 1 summarizes our  assessment of the extent to which the Army’s annual modular force report  included each of the legislative requirements.
The Individual Ready Reserve is a subcategory of the Ready Reserve of the Army  Reserve. Members of the Individual Ready Reserve include individuals who were  previously trained during periods of active service, but have not completed their service  obligations; individuals who have completed their service obligation and voluntarily retain  their reserve status; and personnel who have not completed basic training. Most of these  members are not assigned to organized units, do not attend weekend or annual training,  and do not receive pay unless they are called to active duty. reported that Army officials responsible for providing information on the  modular force progress were not given sufficient guidance to ensure the  completeness of its report. We recommended that the Army provide  guidance on the level and type of detail needed for each office within the  Army responsible for providing information on the Army’s progress in  meeting modularity requirements. In preparing the fiscal year 2013 report,  the Army implemented our recommendation to provide guidance to Army  officials to ensure the completeness of its report. The Director of the Army  Staff sent a memorandum in March 2013 to Army staff that outlined the  coordination process for preparing the fiscal year 2013 report, identifying  each office responsible for providing information for the report. In addition,  Army officials coordinating the report held meetings with each office early  in the process to ensure they complied with the mandated language.  Additionally, the Army provided the offices with a list of the key enabler  items to report on rather than letting the offices interpret what to report.  By implementing our recommendation, the Army’s fiscal year 2013  modularity report generally met legislative requirements and provided  congressional decision makers with additional information on the Army’s  progress in its modular force restructuring.
section_title: Lessons Learned from Modular Restructuring Provide Opportunities in Future Restructuring
paragraphs: The Army has completed its transition to modular brigade combat team  designs, but it has not addressed the key challenges of creating a results- oriented plan, creating realistic cost estimates, and planning  comprehensive assessments that we identified in our work since 2005. In  our prior reports between 2005 and 2008 on the Army’s modular  transformation, we made 20 recommendations intended to help the Army  address these challenges. The Army generally agreed with 18 of those  recommendations, but it has so far implemented only 3 of them. The  Army has begun to create a results-oriented plan, but more work remains  to create realistic cost estimates and plan comprehensive assessments.  As the Army continues to make changes to the structure of its modular  brigade combat team—including adding a maneuver battalion to the  infantry and armored brigade combat teams—it has the opportunity to  incorporate lessons learned and reduce the risk of repeating mistakes  from its recent experience in changing its force structure.
subsections: section_title: Army Has Made Some Progress Creating a Results-Oriented Plan, Including Taking Initial Steps in Ongoing Restructuring
subsections: section_title: Summary of GAO Recommendations to Army on Creating a Results-Oriented Plan
paragraphs: In order to improve the Army’s focus on the relationship between key  enabler investments and results and the completeness of the information  that the Army provides Congress, between 2005 and 2008 we made four  recommendations regarding creating a results-oriented plan. Our  recommendations were rooted in key practices that we have identified for  assisting organizational transformations, suggesting agencies can be  more results-oriented by focusing on a key set of principles and priorities  at the outset of the transformation as well as setting implementation goals  to show progress from the beginning of the transformation. Our  recommendations to the Army included developing a plan to identify  authorized and projected personnel and equipment levels as well as an  assessment of the risks associated with any shortfalls. The Army  generally agreed with three of the recommendations and ultimately  implemented two of them. For example, the Army concurred with but did  not implement our 2006 recommendation to provide the Secretary of  Defense and Congress with details about the Army’s equipping strategy;  when we reiterated a similar recommendation in 2008, the Army  implemented it by providing more detailed information on its progress in  providing the modular force with key personnel and equipment enablers.  For a full list of our past recommendations and their implementation  status regarding creating a results-oriented plan for the Army’s modular  force transformation, see appendix II.
section_title: GAO’s Prior Work Found That the Army Did Not Have Adequate Plans to Staff and Equip Modular Forces
paragraphs: Our work since 2005 found that the Army began its modular transition  without creating a results-oriented plan with clear milestones to provide  units with specially trained personnel and specialized equipment. In 2005  and 2006, we reported that the Army began its modular transformation  without creating a staffing plan that considered the size and composition  of the modular force. For example, in 2005 we testified that the Army had  begun its modular transformation without deciding on the number of  brigade combat teams or finalizing the design of supporting units.  Without finalized designs or key decisions, the Army did not have a  complete understanding of the personnel needed to achieve its goals. As  a result, the Army could not assure decision makers when modular units  would have the required key enabler staff in place to restore readiness,  and it experienced cost growth and timeline slippage in its efforts to  transform to a modular and more capable force. In 2006, we testified  and reported that the Army did not plan to fill some key intelligence  positions required by its new modular force structure. Without continued  and significant progress in meeting personnel requirements, the Army  had to accept increased risk in its ability to support its combat forces, and  it ultimately sought support for an increase in overall personnel from the  Department of Defense (DOD) and Congress.
Additionally, in 2005 and 2006 we reported that the Army did not develop  an equipping plan to provide modular units the required quantities of key  enabler equipment considered critical for the transformation. For  example, in 2005 we testified that although the Army had some of its key  enabler equipment on hand at the start of its modular transformation, the  amount of equipment provided to brigade combat teams was well below  the levels tested by the Army Training and Doctrine Command. As a  result, officials from two divisions that we visited expressed concern over  their soldiers’ ability to train and become proficient with some of this high- tech equipment because the equipment was not available in sufficient  numbers. In 2006, we similarly testified that although active modular  combat brigades were receiving considerable quantities of equipment,  they initially lacked required quantities of items such as communications  systems that were key for providing the enhanced intelligence, situational  awareness, and network capabilities needed to help match the combat  power of the Army’s former brigade structure. At that time, the Army’s  modular combat brigade conversion schedule outpaced the planned  acquisition or funding for some equipment requirements, and the Army  had not defined specific equipping plans for brigades. By not completing  development of its equipping strategy, the Secretary of Defense and  Congress were not in a good position to assess the Army’s equipment  requirements and the level of risk associated with the Army’s plans.
Moreover, in 2008 we reported that although the Army had established  over 80 percent of its modular units, it did not have a results-oriented plan  with clear milestones in place to guide efforts to staff and equip those new  units. The Army extended its estimates of how long it would take to  equip the modular force from 2011 to 2019, but it provided few details  about interim steps. While the Army projected that it would have enough  personnel and equipment in the aggregate, its projections relied on  uncertain assumptions related to meeting recruiting and retention goals  as well as restoring equipment used in current operations. For example,  the Army centered its equipping strategy on the Future Combat System, a  longer-term transformation effort that comprised 14 integrated weapon  systems and an advanced information network. The Army expected  brigade combat teams equipped with the Future Combat System to  provide significant warfighting capabilities to DOD’s overall joint military  operations. However, in 2009, after 6 years and an estimated $18 billion  invested, DOD canceled the Future Combat System acquisition program  and instead identified alternate plans to modernize equipment. The  cancelation of the Future Combat System presented setbacks to the  equipping of the modular force. Without a results-oriented plan for  equipment and staffing with realistic milestones, the Army could not  assure decision makers when modular units would have the required  equipment and staff in place to restore readiness.
section_title: Army Is Taking Initial Steps to Plan for Ongoing Restructuring
paragraphs: In 2013, when the Army announced plans to change its modular force  designs and add a third battalion to most brigade combat teams, it  incorporated some lessons we identified in our prior work and took some  initial steps to create a results-oriented plan to guide implementation of  the changes. The Army based decisions on which units to inactivate on  quantitative and qualitative analyses and developed a timeline for the  changes, with associated tasks and milestones. For example, as we  reported in December 2013, the Army established a planning team for the  brigade combat team reorganization to assess factors such as strategic  considerations, military construction costs, and proximity to embarkation  points, among others, and to develop stationing options for decision  makers. Furthermore, the Army has developed a plan to reduce risk to  the readiness of the force during this reorganization by providing  equipment, personnel, and training resources to units currently deployed  or deploying for operations or contingencies and then to seven brigade  combat teams that will maintain a high level of readiness for 18 to 24  months. According to Army officials, these seven teams will remain at the  highest level of readiness in order to support any planned or unexpected  operations while the remaining brigade combat teams undergo their  reorganizations and accept a risk of low readiness to respond to potential  contingencies.
Moreover, the Army Structure memorandum for 2015 through 2019  documented interim steps in reorganizing the Army modular force  structure. For example, the Army identified inactivation and  reorganization dates as well as changes to the tables of equipment for the  brigade combat teams. Additionally, once the Army identified which units  would be inactivated or reorganized, officials developed an online tracking  system that provides information such as when the reorganization and  associated training will occur and what tasks each reorganized unit will  have to complete. According to an Army official, senior leaders—including  three-star generals and the Chief of Staff of the Army—reviewed the  online system to track progress in implementing planned changes.  However, the Army has not always been able to implement its plans to  achieve its goals. For example, the Army was not able to fulfill plans for  some key enabler equipment such as through its Future Combat System  program that were deemed critical to achieving the combat effectiveness  of the modular brigade combat teams. The Army could face risks in  implementing current plans without sustaining attention and following  through on its plans for changes to the modular force design. By creating  a results-oriented plan for the inactivations and reorganizations, the Army  has established a baseline against which to measure performance. If the  Army follows through its initial steps to create a results-oriented plan for  changes to the modular force design, it would help to provide senior  officials and Congress the ability to identify and mitigate any potential  problems that may arise.
section_title: Army Did Not Develop Realistic Cost Estimates Associated with Its Modular Force Transformation, and Costs and Savings of Ongoing Restructuring Are Not Clear
subsections: section_title: Summary of GAO Recommendations to Army on Developing Realistic Cost Estimates
paragraphs: In order to improve information available to decision makers on the cost  of the Army’s plan for its modular force transformation, between 2005 and  2008 we made 10 recommendations regarding creating a realistic cost  estimate. In the John Warner National Defense Authorization Act for  Fiscal Year 2007, Congress specifically required the Army to report on a  complete itemization of the amount of funds expended to date on the  modular brigades and itemization of the requirements for the funding  priorities. Our recommendations to the Army included submitting an  annual cost plan that incorporated a clear definition of the costs the Army  considered to be related to the modular transformation, estimates for  equipment and personnel, and divergences from the plan as stated in the  prior year’s report, among others. The Army generally agreed with all the  recommendations, but it did not implement any of them. For example, the  Army did not develop a plan for overseeing the costs related to the  Army’s transformation to a modular force as we had recommended,  stating that the administrative costs of such an effort would outweigh any  benefit. For a full list of our past recommendations and their  implementation status regarding creating realistic cost estimates for the  Army’s modular force transformation, see appendix II.
section_title: GAO’s Prior Work Found That Modularity Costs Increased Dramatically from Initial Estimates, but Were Never Clearly Reported
paragraphs: From 2005 through 2013, the Army did not create realistic cost estimates  for implementing its modular force transformation. We reported in 2005  that the Army might not have estimated all potential costs for its modular  force transformation because it had not made decisions related to force  design, equipment, facilities, and personnel. We reported that the Army  likely understated its estimates for equipment costs because it did not  entirely reflect the cost of purchasing all the equipment needed to bring  the planned units to the modular design—and therefore to the level of  capability—that the Army validated in testing. In addition, Army officials  were uncertain whether the personnel authorization was enough to  support the modular transformation, putting costs at risk of increasing if  the Army determined that the transformation required additional  personnel. Additionally, the Army was uncertain of the costs of  constructing permanent facilities because it did not incorporate proposals  for base realignment and closure and restationing of personnel from  overseas. As costs grew due to these uncertainties, the Army required  additional funding or needed to accept reduced capabilities among some  or all of its units. By not developing a better understanding of costs  associated with the modular force and a clearer picture of the effect of  resource decisions on the modular force capability, DOD was not well  positioned to weigh competing priorities or to provide congressional  decision makers the information they needed to evaluate funding  requests.
Additionally, in 2007 we reported that Army officials did not identify how  much additional funding they needed to fully equip modular units but they  planned to request funds for additional equipment needs through DOD’s  annual budget process. We noted that in the absence of a complete  cost estimate, the Army would not be in a good position to identify  detailed costs and provide transparency to Congress of its total funding  needs. We also reported that the Army sought multiple sources of money  without linking funding to its modular unit design requirements, thus  complicating decision makers’ ability to assess the Army’s progress in  fully equipping the modular force. In 2007, we reported that the Army  estimated the modular restructuring could cost $52.5 billion—more than  two-and-a-half times greater than its initial cost estimate of $20 billion in  2004. In 2009, the Army reported to Congress that it could no longer  itemize modular costs because all Army personnel and equipment  budgets support the modular force. Without linking funding to  requirements, decision makers would have difficulty assessing the Army’s  progress in meeting its goals, knowing what resources would be required  to equip and staff modular units, and balancing funding requests for these  initiatives with other competing priorities.
section_title: Costs and Savings Associated with Ongoing Restructuring Are Not Clear
paragraphs: As the Army continues planning for changes to its modular force design,  Army officials compiling the fiscal year 2013 report were not aware of any  cost estimates developed for inactivating 12 brigade combat teams and  adding a third battalion to the infantry and armored brigade combat  teams. According to Army officials, the Army expects that the costs will be  low because 9 of the 12 inactivations would involve reorganizations within  the same installation, minimizing military construction and personnel  relocation costs. However, the Army did not provide us with any detailed  cost analysis. Further, the Army did not provide cost estimates for military  construction and personnel relocation costs for those reorganizations  occurring across installations or for associated doctrine development or  training for the reorganized units. Without realistic cost estimates, the  Army may encounter many of the same risks that we reported previously.
The Army plans to reduce its budget by $170 billion between fiscal years  2013 and 2022, and the reorganization of the brigade combat teams and  the associated reduction of 80,000 personnel should contribute to the  cost savings. However, given two decades of GAO reports delineating  DOD’s overly optimistic planning assumptions in budget formulation,  which often lead to costly program delays, we believe that not having a  detailed cost analysis could lead to increases in the Army’s incremental  costs for its reorganization. Specifically, if costs grow due to uncertainties  regarding equipment and personnel movement costs, the Army may  require additional funding or need to accept reduced capabilities among  some or all of its units. In the absence of a complete cost estimate, the  Army may be unable to assure Congress that the Army has identified the  total funding needs for reorganizing modular forces. We continue to  believe that realistic cost estimates would enhance DOD decision makers’  ability to weigh competing priorities in a fiscally constrained environment  and provide Congress with the information needed to evaluate funding  requests.
section_title: Army Has Not Completed a Comprehensive Assessment Plan to Monitor Performance of Its Modular Force Transformation, and Assessments for Ongoing Restructuring Are Not Formalized
subsections: section_title: Summary of GAO Recommendations to Army on Planning Comprehensive Assessments
paragraphs: In order to assess the implications of changes to the Army force structure  in terms of the goals of modular restructuring, from 2005 through 2008 we  made six recommendations regarding creating comprehensive  assessment plans. Standards for Internal Control in the Federal  Government state that agencies should provide reasonable assurance to  decision makers that their objectives are being achieved and that decision  makers should have reliable data to determine whether they are meeting  goals and using resources effectively and efficiently. Our  recommendations to the Army included developing a comprehensive plan  for assessing the Army’s progress toward achieving the benefits of the  modular transformation that incorporated quantifiable metrics and  addressed a wide range of both traditional and irregular security  challenges. The Army generally agreed with five of the recommendations  but implemented only one. For example, the Army agreed with but did not  implement our recommendation to develop a comprehensive assessment  plan that includes steps to evaluate modular units in full-spectrum  combat. However, the Army acted upon our recommendation by  assessing aspects of the modular force and refining its modular designs  based on lessons learned in the areas of equipment, doctrine, and  training. For a full list of our past recommendations and their  implementation status regarding completing a comprehensive  assessment plan for the Army’s modular force transformation, see  appendix II.
section_title: GAO’s Prior Work Found That the Army Did Not Provide Comprehensive Assessments of Modular Restructuring
paragraphs: Since 2004, the Army has made many refinements to its modular design  based on lessons learned and limited assessments of specific  capabilities, but it has not completed a comprehensive assessment plan  to measure the extent that its modular force transformation is meeting  performance goals. In 2006, we reported that the Army did not have a  comprehensive and transparent approach to measure progress against  stated modularity objectives, assess the need for further changes to  modular designs, and monitor implementation plans. While DOD had  identified the importance of establishing objectives that translate into  measurable metrics that in turn provide accountability for results, the  Army had not established outcome-related metrics linked to most of its  modularity objectives. Further, we reported that although the Army  analyzed lessons learned from Iraq and training events, the Army did not  have a long-term comprehensive plan for further analysis and testing of  its modular combat brigade designs and fielded capabilities. As a result,  decision makers did not have sufficient information to assess the  capabilities, cost, and risks of the Army’s modular force implementation  plans.
Moreover, in 2007 we reported that the Army was evaluating and applying  lessons learned from its counterinsurgency operations. However, it did  not have a comprehensive assessment plan to determine whether fielded  modular unit designs met the Army’s original goals for modular units  across the full spectrum of low- and high-intensity warfare, and it did not  have outcome-oriented metrics that helped to measure progress in  achieving the goals of the modular force. The Army evaluated the  experiences of modular units deployed to Iraq and Afghanistan and had  made some changes in unit designs based on these lessons; however,  the Army did not develop a plan for assessing modular units in high- intensity combat operations. In seeking approval to establish modular  units, the Army identified a number of planned benefits associated with  them, such as providing the same or better combat effectiveness of the  Army’s division-based brigades. However, the Army limited its evaluations  to the performance of modular units during predeployment exercises and  counterinsurgency operations and did not evaluate their performance  across the full spectrum of combat operations that include large-scale,  high-intensity combat operations. As a result, the Army did not have a  clear way to measure the extent to which new modular brigades were as  effective as its division-based brigades for a range of missions. Without a  comprehensive assessment plan that included a wider range of potential  missions, the Army may have missed opportunities to strengthen its  designs.
Additionally, we reported in our 2008 report on Army modularity that the  Army tested its units with the full complement of required equipment and  personnel, and not at the somewhat lower level of personnel and  equipment the Army actually provided to units. As a result, the Army  assessment of whether the capabilities that it was fielding could perform  mission requirements did not capture realistic missions and outcomes.  Without an analysis of the capabilities of the modular force at realistic  personnel and equipment levels, the Army was not in a position to assess  whether the capabilities that it was fielding could perform mission  requirements.
section_title: Army Has Ongoing Steps for Planning Comprehensive Assessments
paragraphs: Faced with decreasing financial resources and increasing ambiguity  regarding future missions, decision makers sought to determine how to  organize combat formations to best position the Army for a range of  possible missions. The Army Training and Doctrine Command Analysis  Center prepared an analysis in May 2012 to consider whether the Army  should add a third maneuver battalion to the armored and infantry brigade  combat team designs. To begin this analysis, the Army assembled 23  commanders of brigade combat teams to gather insights into the  effectiveness of the both the two- and three-battalion designs across a  wide range of possible future demands, such as major combat  operations, low-threat activities, and enhanced protective posture. In  doing so, the Army considered several factors we reported on in our prior  work, including reviewing the full spectrum of low- and high-intensity  warfare and identifying assessment metrics such as security of vehicles.  However, the analysis was not an assessment of the Army’s prior  performance under a two-battalion construct. Rather, the analysis was a  projection of how to organize the Army for future demands and thus did  not meet the intent of our past recommendations.
The Army has developed some plans to conduct assessments and  capture lessons learned as it changes its modular force design, but it has  not formalized these plans with a detailed methodology, data-collection  procedures, or outcome-based metrics. According to Army officials, the  Army plans to conduct assessments and capture lessons learned during  the reorganization of the brigade combat teams. The Army issued an  execution order for the Army Training and Doctrine Command to conduct  assessments for this reorganization. According to a senior official from  the Army Training and Doctrine Command, the Army plans to collect  baseline metrics on the brigades both prior to and following their  reorganization. Additionally, the Army has developed new mission- essential task lists for the infantry, Stryker, and armored brigade combat  teams on which to base assessments. When the brigade combat teams  participate in training exercises in their new organizational designs,  assessors will evaluate how well the teams achieve their mission- essential tasks. The assessors can then adjust the training if the brigade  combat teams are having difficulties understanding the new tasks.  However, the Army officials stated that there is no checklist or detailed  plan on how to conduct these assessments or what outputs to measure.  Moreover, according to Army officials, the assessments are dependent  upon receiving sufficient funding and potentially may not occur. If the  Army created a comprehensive assessment plan, it could help enable the  Army to clearly measure the extent to which it is achieving desired  benefits in the design of its modular force.
section_title: Agency Comments
paragraphs: We are not making new recommendations in this report. However, this  report’s analysis provides additional support for past recommendations to  develop realistic cost estimates and to create a comprehensive  assessment plan to measure achievement of desired benefits. We  provided a draft of this report to DOD for comment. Army officials  provided oral comments on the draft indicating that DOD concurred with  our report.
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Defense; and the Secretary of the Army.  The report is also available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (404) 679-1816 or pendletonj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the extent that the Army addressed legislative requirements  to report information regarding key equipment and personnel needs for its  reorganized modular force, three analysts independently reviewed the  Army’s fiscal year 2013 modularity report and compared the report to the  legislative requirements. A fourth analyst adjudicated the differences in  cases of dispute and determined a final categorization. The analysts used  an evaluation tool that listed the legislative requirements and categorized  the extent to which the Army’s report included information required for  each reporting element from the mandate. The categories were  “Addressed,” “Addressed in part,” and “Not addressed.” “Addressed”  meant the report thoroughly addressed all components of the  requirement. “Addressed in part” meant that one or more, but not all,  components of the requirement were addressed, or that all components  of the requirement were addressed, but the information provided was  insufficient to answer the requirement fully due to limitations in the data or  information provided. “Not addressed” meant that the report did not  address any part of the requirement. To gain a full understanding of the  method and data the Army used to prepare the report, clarify the  significance of the information presented in the report, and obtain  additional information that addressed the legislative reporting  requirements, we met with Army officials knowledgeable about compiling  information for the report, about key enabler personnel and equipment,  and about equipment reset, doctrine, and force structure changes.  Specifically we met with Army officials from the Offices of the Deputy  Chiefs of Staff for Personnel (G-1), Logistics (G-4), Operations and Plans  (G-3/5/7), and Programs (G-8); Training and Doctrine Command; Army  National Guard; and Army Reserve who provided data for the Army’s  fiscal year 2013 modularity report. To gain a full understanding of the data  the Army used to prepare the report, analysts reviewed documents the  Army used to compile the report, including a Director of the Army Staff  memorandum, the list of key enabler personnel and equipment required  to be included in the report, and the Army Equipment Reset Update. To  gain a full understanding of the progress made in fulfilling modularity  requirements in the fiscal year 2013 report, we reviewed the fiscal year  2012 report to determine the extent of progress made between fiscal  years 2012 and 2013. After the initial interview, document review, and  completion of the evaluation tool and adjudication of the differences, the  analysts determined that of the 14 legislative requirements, 9 were  addressed and 5 were addressed in part. Analysts conducted a follow-up  interview regarding the five legislative requirements that were addressed  in part to obtain additional information or documentation on why the  elements were not fully addressed.
To identify challenges in the Army’s modular force restructuring over the  past 10 years, we reviewed prior GAO reports evaluating the Army force  structure. We also reviewed prior GAO reports evaluating technology and  equipment related to the Army’s modular restructuring to identify  challenges. From our review of prior reports, we identified three main  challenges the Army faced during its modular force restructuring. To  determine how the Army is addressing these challenges, we reviewed  whether the Army implemented the recommendations in our prior GAO  reports that evaluated the Army’s modular force structure. To determine  whether the Army plans in its modular force structure reorganization to  address challenges previously identified in our reports, we reviewed Army  documents and interviewed Army officials. We reviewed documents  including the Brigade Combat Team inactivation execution order, Army  Structure Memorandum for fiscal years 2014 to 2019, Army of 2020  Analysis Supporting the Brigade Combat Team Design Decision, and the  Army Campaign Plan portal, which the Army uses to track the  reorganization. We met with officials knowledgeable about the changes to  the brigade combat team designs to gain a full understanding of the plans  the Army is developing to execute the changes. We also spoke with an  official from the Army Training and Doctrine Command to learn about the  Army’s plans to conduct comprehensive assessments of its modular force  reorganization.
We conducted this performance audit from September 2013 to April 2014  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Status of GAO Recommendations from Army Modularity Reviews
paragraphs: This appendix presents a list of (1) the 20 recommendations that we had  previously made regarding the Army’s modular force transformation, (2)  the Department of Defense (DOD) response to those recommendations,  and (3) our analysis of whether the Army has addressed the issues that  gave rise to the recommendations. From 2005 to 2008, we made 20  recommendations regarding the Army’s modular force transformation in  the following four reports:
Force Structure: Actions Needed to Improve Estimates and Oversight  of Costs for Transforming Army to a Modular Force. GAO-05-926.  Washington, D.C.: September 29, 2005. (Referred to below as  September 2005 recommendations).
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. (Referred  to below as September 2006 recommendations).
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. (Referred to below as December 2007 recommendations).
Force Structure: The Army Needs a Results-Oriented Plan to Equip  and Staff Modular Forces and a Thorough Assessment of Their  Capabilities. GAO-09-131. Washington, D.C.: November 14, 2008.  (Referred to below as November 2008 recommendations).
We tracked the recommendations for 4 years following each report’s  publication and closed each one as either implemented or not  implemented. We grouped our recommendations by the types of issues  and challenges on which the recommendations focused: (1) creating a  results-oriented plan, (2) developing realistic cost estimates, and (3)  planning comprehensive assessments. The appendix lists the  recommendations by these three key challenges.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Margaret Morgan (Assistant  Director), Alice Paszel, Richard Powelson, Kelly Rubin, Jodie Sandel,  Amie Steele, and Sabrina Streagle made significant contributions to this  report.
section_title: Related GAO Products
paragraphs: Force Structure: Army’s Annual Report on Modularity Progress Needs  More Complete and Clear Information to Aid Decision Makers.  GAO-13-183R. Washington, D.C.: January 16, 2013.
Force Structure: Assessment of Army Report on Fiscal Year 2011  Progress in Modular Restructuring. GAO-12-527R. Washington, D.C.:  March 26, 2012.
Force Structure: Assessment of Army Progress in Modular Restructuring,  Prepositioned Equipment, and Equipment Reset. GAO-10-507R.  Washington, D.C.: April 26, 2010.
Force Structure: The Army Needs a Results-Oriented Plan to Equip and  Staff Modular Forces and a Thorough Assessment of Their Capabilities.  GAO-09-131. Washington, D.C.: November 14, 2008.
Force Structure: Restructuring and Rebuilding the Army Will Cost Billions  of Dollars for Equipment but the Total Cost Is Uncertain. GAO-08-669T.  Washington, D.C.: April 10, 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.
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.
Force Structure: Actions Needed to Improve Estimates and Oversight of  Costs for Transforming Army to a Modular Force. GAO-05-926.  Washington, D.C.: September 29, 2005.
Force Structure: Preliminary Observations on Army Plans to Implement  and Fund Modular Forces. GAO-05-443T. Washington, D.C.: March 16,  2005.