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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.

Summary:
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. 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. 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.