In  our 2007 report, we noted that the Army’s reset implementation strategy  did not specifically target shortages of equipment on hand among units  preparing for deployment to Iraq and Afghanistan in order to mitigate  operational risk. We recommended that the  Secretary of Defense direct the Secretary of the Army to assess the  Army’s approaches to equipment reset to ensure that its priorities address  equipment shortages in the near term to minimize operational risk and  ensure that the needs of deploying units could be met. For example, in April 2008, the Army  issued its Depot Maintenance Enterprise Strategic Plan noting that filling  materiel shortages within warfighting units is a key challenge facing the  depot maintenance enterprise, and called for changes in processes,  programs, and policies to ensure the timely repair of equipment to  address these shortages. In 2010, the Army, recognizing that retrograde operations are essential to  facilitating depot level reset and redistribution of equipment, developed  the retrograde, reset, and redistribution (R3) initiative to synchronize  retrograde, national depot-level reset efforts, and redistribution efforts. In March 2011, an initial R3  equipment priority list was issued, based primarily on shortages identified  by U.S Army Forces Command. According to Army officials, this initial list  was revised and reissued at the end of fiscal year 2011 to include critical  equipment shortages identified and fully endorsed by all Army  commands. Army Reporting Does Not Provide Visibility over Multiyear Reset Costs or Fully Capture Deviations between Planned and Executed Reset

The Army has taken steps under its own initiative to report its reset  execution quantities to Congress since 2007, but this reporting does not  capture important elements of the Army’s reset efforts, including its  estimated future reset costs and the amount of equipment planned for  reset each year that is successfully reset. We have reported that  agencies and decision makers need visibility into the accuracy of program  execution in order to ensure basic accountability and to anticipate future  costs and claims on the budget. As table 1 shows, the Army reports aggregate information on reset  activity in broad categories, such as Tactical Wheeled Vehicles or  Aviation Support Equipment. To illustrate this point, our analysis of Army data from fiscal year 2010  shows that 4,144 tactical wheeled vehicles were planned for reset in fiscal  year 2010 and a total of 3,563 vehicles were executed (see table 2). According to the Army’s current reporting method, this would result in a  reported total completion rate of 86 percent. However, our analysis  showed that, of the total number of items executed, 1,647 items or  approximately 40 percent of the equipment reset was actually equipment  that had been planned and programmed. This  information is important because it has cost implications. For example, both the M1200  Knight (an armored security vehicle) and the M1151 HMMWV are  categorized as Tactical Wheeled Vehicles in the Army’s monthly reports  to Congress. However, in 2010 more M1200s were  repaired than planned, thus accounting for a larger share of the budgeted  reset funds. At the same time, with fewer funds remaining, some  equipment planned and budgeted for repair was not reset, pushing that  workload to future fiscal years. Without information on the multiyear reset  liability and additional details within current reports, Congress may not  have a complete picture of both the Army’s progress in meeting its reset  plan as well as the long-term cost implications of reset. Since our 2007 review, the Army has taken  steps to incorporate deploying units’ equipment needs into their reset  planning, including the implementation of the R3 equipment list, but it is  too early to tell whether this initiative will provide a consistent and  transparent process. Recommendations for Executive Actions:

To ensure that the Army provides information to Congress that is useful  for assessing its short and long-term reset progress, we recommend that  the Secretary of the Army direct the Office of the Chief of Staff of the  Army, Logistics to take the following two actions:
Revise the monthly congressional reset reports to include the Army’s  multiyear reset liability, which should include the anticipated cost to  reset all equipment in-theater as well as all equipment returned to the  United States that has not yet been reset; and
Revise the monthly congressional reset reports to include information  on the percentage of equipment reset according to the initial reset  plan by vehicle type. However, DOD stated  that the Army plans to include the Army’s estimate of future equipment  reset liability in its summary report to Congress for the fiscal year. Appendix I: Scope and Methodology

To examine any steps the Army has taken to improve its equipment reset  strategy and address target shortages since our 2007 report, we reviewed  the Department of Defense’s (DOD) comments in that report. To determine the extent to which the Army’s monthly reset reports to  Congress provide visibility over reset costs and execution, we obtained  data published in the Reset Execution Order on the Army’s annual  sustainment-level reset workload requirements estimates from fiscal  years 2007 through 2012 to determine the quantities of equipment  planned for reset.
Why GAO Did This Study

From 2007 to 2012, the Army received about $42 billion to fund its expenses for the reset of equipmentincluding more than $21 billion for depot maintenancein support of continuing overseas contingency operations in Southwest Asia. Reset is intended to mitigate the effects of combat stress on equipment by repairing, rebuilding, upgrading, or procuring replacement equipment. Reset equipment is used to supply non-deployed units and units preparing for deployment while meeting ongoing operational requirements. In 2007, GAO reported that the Armys reset strategy did not target equipment shortages for units deploying to theater. For this report, GAO (1) examined steps the Army has taken to improve its equipment reset strategy since 2007, and (2) determined the extent to which the Armys reset reports to Congress provide visibility over reset costs and execution. To conduct this review, GAO reviewed and analyzed DOD and Army documentation on equipment reset strategies and monthly Army reports to Congress, and interviewed DOD and Army officials.

What GAO Found

Since GAOs 2007 review, the Army has taken steps to improve its use of reset in targeting equipment shortages. In 2007, GAO noted that the Armys reset implementation strategy did not specifically target shortages of equipment on hand among units preparing for deployment to Iraq and Afghanistan in order to mitigate operational risk. GAO recommended that the Army act to ensure that its reset priorities address equipment shortages in the near term to ensure that the needs of deploying units could be met. The Department of Defense (DOD) did not concur, and stated that there was no need to reassess its approaches to equipment reset. However, in 2008, the Army issued its Depot Maintenance Enterprise Strategic Plan, noted that filling materiel shortages within warfighting units is a key challenge facing the depot maintenance enterprise, and called for changes in programs and policies to address materiel shortages within warfighting units. Further, recognizing that retrograde operationsthe return of equipment from theater to the United Statesare essential to facilitating depot level reset and redistribution of equipment, the Army in 2010 developed the retrograde, reset, and redistribution (R3) initiative to synchronize retrograde, national depot-level reset efforts, and redistribution efforts. In March 2011, the Army issued an R3 equipment priority list, and revised and reissued an updated list at the end of fiscal year 2011 with full endorsement from all Army commands. The R3 initiative has only begun to be fully implemented this year, and thus it is too early to tell whether it will provide a consistent and transparent process for addressing the Armys current or future equipping needs.
GAO found that the Armys monthly reports to Congress do not include expected future reset costs or distinguish between planned and unplanned reset of equipment. GAO has reported that agencies and decision makers need visibility into the accuracy of program execution in order to ensure basic accountability and to anticipate future costs. However, the Army does not include its future reset liability in its reports to Congress, which DOD most recently estimated in 2010 to be $24 billion. Also, the Army reports to Congress include the number of items that it has repaired in a given month using broad categories, such as Tactical Wheeled Vehicles, which may obscure progress on equipment planned for reset. For example, GAOs analysis of Army data showed that 4,144 tactical wheeled vehicles were planned for reset in fiscal year 2010, while 3,563 vehicles were executed. According to the Armys current reporting method, this would result in a reported completion rate of 86 percent, but GAOs analysis showed that only approximately 40 percent of the equipment that was reset had been planned and programmed. This reporting method may also restrict visibility over the Armys multiyear reset liability. For example, both the M1200 Knight and the M1151 HMMWV are categorized as Tactical Wheeled Vehicles, but anticipated reset costs for the M1200 are significantly higher. In 2010 more M1200s were repaired than planned, thus accounting for a larger share of the budgeted reset funds. With fewer funds remaining, some equipment planned and budgeted for repair was not reset, pushing that workload to future fiscal years. These differences are not captured in the Armys monthly reports, and thus Congress may not have a complete picture of the Armys short- and long-term progress in addressing reset.

What GAO Recommends

GAO recommends that the Army revise its monthly congressional reset reports to include its future reset liability and status information on equipment reset according to the initial reset plan by vehicle type. DOD did not concur. DOD stated that the Army would report its reset liability annually instead of monthly. Because DOD did not agree to report its reset status by vehicle type, GAO included a matter for congressional consideration to direct the Army to report this information.