The foundation of the modular force is the creation of  modular brigade combat teams—combat maneuver brigades that will have  a common organizational design and will increase the rotational pool of  ready units. Lack of Clarity in Army’s Cost Estimate for Modularity Limits Decision Makers’ Ability to Weigh Funding Priorities

The Army’s cost estimate for modularity has continued to evolve since our  September 2005 report. The latter  estimate addressed some of the shortcomings of the initial rough order of  magnitude estimate and included lessons learned from operations in Iraq. As a result, the Secretary of Defense and  Congress may not be in a sound position to weigh competing demands for  funding and assess whether the Army will be able to fully achieve planned  capabilities for the modular force by 2011 within the planned funding  level. Although the Army Is Well Under Way in Its Active Modular Combat Brigade Conversions, Its Ability to Meet Its Equipping Goals by 2011 Is Unclear

The Army has made progress in creating active component modular  combat brigades, but it is not meeting its equipping goals for these  brigades and is still developing its overall equipping strategy, which raises  concerns about the extent to which brigades will be equipped in the near  and longer term. However, the Army has  not yet determined the levels of equipment it needs to support this  strategy, assessed the operational risk of not fully equipping all units, or  provided to Congress detailed information about these plans so it can  assess the Army’s current and long-term equipment requirements and  funding plans. The Army says it  will manage these shortfalls; however, according to Army officials, the  Army may continue to seek modular force equipment funding beyond 2011  and may exceed its $52.5 billion modularity cost estimate. The Army’s modular force concept is intended to transform the  National Guard from a strategic standby force to a force that is to be  organized, staffed, and equipped comparable to active units for  involvement in the full range of overseas operations. To Mitigate Equipment Shortages, Army Plans to Rotate Equipment among Units Based on Their Movement through Training, Readiness, and Deployment Cycles

Because the Army realized that it would not have enough equipment in the  near term to simultaneously equip modular combat brigades at 100 percent  of their requirements, the Army is developing a new equipping strategy as  part of its force rotation model; however, it has not yet determined  equipping requirements for this new strategy. However, as of March 2006 the Army had not decided on  specific equipping plans for units in the various phases of its force rotation  model. The Army Faces Challenges in Managing Personnel Requirements for Its New Modular Force Structure

The Army has made some progress meeting modular personnel  requirements in the active component by shifting positions from its  noncombat force to its operational combat force but faces significant  challenges reducing its overall end strength while increasing the size of its  modular combat force. The Army plans to reduce its current end strength  of 512,400, based upon a temporary authorized increase, to 482,400  soldiers by 2011 in order to help fund the Army’s priority acquisition  programs. The Army Has Objectives and Time Frames for Modularity but Lacks Performance Metrics to Measure Progress

The Army lacks a comprehensive and transparent approach to effectively  measure its progress against stated modularity objectives, assess the need  for further changes to its modular unit designs, and monitor  implementation plans. However, these goals  have not translated into outcome-related metrics that are reported to  provide decision makers a clear status of the modular restructuring as a  whole. Since these initial design assessments, the Army has been assessing  implementation and making further adjustments in designs and  implementation plans through a number of venues, to include    unit readiness reporting on personnel, equipment, and training;    modular force coordination cells to assist units in the conversion process;    modular force observation teams to collect lessons during training; and    collection and analysis teams to assess units’ effectiveness during  deployment. In addition, the Army has recently completed  designs for support units and headquarters units. Without another broad-based  evaluation, the Secretary of Defense and congressional leadership will  lack visibility into the capabilities of the brigade combat teams as they are  being organized, staffed, and equipped. In this challenging  environment, it is important for the Army to clearly establish and  communicate its funding priorities and equipment and personnel  requirements and assess the risks associated with its plans. Moreover, it is  important for the Army to clearly establish a comprehensive long-term  approach for its modular restructuring that reports not only a schedule of  creating modular units, but measures of its progress toward meeting its  goal of creating a more rapidly deployable, joint, expeditionary force.
Why GAO Did This Study

The Army considers its modular force transformation the most extensive restructuring it has undertaken since World War II. Restructuring the Army from a division-based force to a modular brigade-based force will require extensive investments in equipment and retraining of personnel. The foundation of the modular force is the creation of standardized modular combat brigades designed to be stand-alone, self-sufficient units that are more rapidly deployable and better able to conduct joint operations than their larger division-based predecessors. GAO was asked to testify on the status of the Army's modularity effort. This testimony addresses (1) the Army's cost estimate for restructuring to a modular force, (2) progress and plans for equipping modular brigade combat teams, (3) progress made and challenges to meeting personnel requirements, and (4) the extent to which the Army has developed an approach for assessing modularity results and the need for further adjusting designs or implementation plans. This testimony is based on previous and ongoing GAO work examining Army modularity plans and cost. GAO's work has been primarily focused on the Army's active forces. GAO has suggested that Congress consider requiring the Secretary of Defense to provide a plan for overseeing spending of funds for modularity.

What GAO Found

Although the Army is making progress creating modular units, it faces significant challenges in managing costs and meeting equipment and personnel requirements associated with modular restructuring in the active component and National Guard. Moreover, the Army has not provided sufficient information for the Department of Defense and congressional decision makers to assess the capabilities, costs, affordability, and risks of the Army's modular force implementation plans. The Army's cost estimate for completing modular force restructuring by 2011 has grown from an initial rough order of magnitude of $28 billion in 2004 to $52.5 billion currently. Although the Army's most recent estimate addresses some shortcomings of its earlier estimate, it is not clear to what extent the Army can achieve expected capabilities within its cost estimate and planned time frames for completing unit conversions. Moreover, according to senior Army officials, the Army may request additional funds for modularity beyond 2011. Although modular conversions are under way, the Army is not meeting its near-term equipping goals for its active modular combat brigades, and units are likely to have shortfalls of some key equipment until at least 2012. The Army plans to mitigate risk in the near term by providing priority for equipping deployed units and maintaining other units at lower readiness levels. However, it has not yet defined specific equipping plans for units in various phases of its force rotation model. As a result, it is unclear what level of equipment units will have and how well units with low priority for equipment will be able to respond to unforeseen crises. In addition, the Army faces significant challenges in implementing its plan to reduce overall active component end strength from 512,400 to 482,400 soldiers by fiscal year 2011 while increasing the size of its modular combat force from 315,000 to 355,000. This will require the Army to eliminate or realign many positions in its noncombat force. The Army has made some progress in reducing military personnel in noncombat positions through military civilian conversions and other initiatives, but some of its goals for these initiatives may be difficult to meet and could lead to difficult trade-offs. Already the Army does not fully plan to fill some key intelligence positions required by its new modular force structure. Finally, the Army does not have a comprehensive and transparent approach to measure progress against stated modularity objectives and assess the need for further changes to modular designs. The Army has not established outcome-related metrics linked to many of its modularity objectives. Further, although the Army is analyzing lessons learned from Iraq and training events, the Army does not have a long-term, comprehensive plan for further analysis and testing of the designs and fielded capabilities. Without performance metrics and a comprehensive testing plan, neither the Secretary of Defense nor congressional leaders will have full visibility into the capabilities of the modular force as it is currently organized, staffed, and equipped.