	Army Modularity Is a Significant Undertaking

The Army’s modular force initiative, which has been referred to as the  largest Army reorganization in 50 years, encompasses the Army’s total  force--active Army, National Guard, and Army Reserve—and directly  affects not only the Army’s combat units, but related support and command  and control. Therefore, successful implementation of this  initiative will require many changes such as new equipment and facilities, a  different mix of skills and occupational specialties among Army personnel,  and significant changes to training and doctrine. The foundation of Army modularity is the creation of brigade combat  teams—brigade-sized units that will have a common organizational design  and will increase the pool of available units for deployment. By the end of fiscal year 2006, the Army plans to reorganize its 10 active  divisions, expanding from the current 33 to 43 modular, standardized  brigade combat teams and creating new types of command headquarters to  replace the current division headquarters structure. Although our work has focused on the active component, restructuring of  the reserve component into modular units will also be a major undertaking. Because of the high degree of complexity associated with establishing a  modular force while managing deployments to ongoing operations, the  Army has developed a number of plans and processes, such as the Army  Campaign Plan and has held periodic meetings within the Army  headquarters and its components and major commands, to manage these  changes. Army May Face Challenges in Staffing and Equipping Modular Brigade Combat Teams

The Army is likely to face a number of challenges in fully staffing and  equipping modular combat brigades as designed. Moreover, the Army needs  an additional 6200 military intelligence specialists through fiscal year 2010  to meet modular force requirements. For example, the design requires a division with four  modular brigade combat teams to have approximately 28 tactical  unmanned aerial vehicle systems. Army Faces a Number of Key Decisions That Could Affect Modular Force Requirements

According to Army modularity plans, the Army is continuing to assess its  requirements and may make some key decisions in the future that will  affect the size and composition of the modular force as well as its cost. First, the Army’s Campaign Plan calls for a potential decision by fiscal year  2006 on whether to create 5 additional modular brigade combat teams. Also, as with the decision to add additional battalions, until the Army  completes all of its force structure designs for support brigades, it will not  have a total picture of its personnel and equipment requirements. Cost Estimates for Fully Implementing Modularity Have Increased Significantly and Are Still Evolving

The costs of modularity are substantial and are likely to grow. In January 2004, the  Army estimated that increasing the number of active modular brigade  combat teams from 33 to 48 would cost $20 billion from fiscal years 2004  through 2011 based on a “rough order of magnitude estimate.” As of  July 2004, the Army added $8 billion to address costs for reorganizing the  reserve component, bringing the total estimated cost for reorganizing the  entire force to $28 billion. For example, the July 2004 estimate:   included costs of adding 15 light infantry brigades for the active  component to bring the total number of active brigades to 48, but these  costs were based on the current brigade structure, not the tested  modular design;   did not take into account the costs for upgrading existing active  brigades, or other support and command elements; and   accounted for construction of temporary, relocatable facilities, but did  not allow for permanent upgrades to facilities or increases to other  services provided at Army installations to accommodate the increase in  modular units. As of March 2005, the Army has revised its earlier estimate, now estimating  that modularity will cost a total of $48 billion from fiscal years 2005 through  2011—an increase of 71 percent over its earlier $28 billion estimate. According to Army officials, they estimated equipment costs in  this manner because some equipment is not currently available or in  production in sufficient quantities to meet modularity requirements. Until the Army more fully defines  the requirements and potential costs associated with modularity, DOD will  not be well positioned to weigh competing priorities and make informed  decisions, and the Congress will not have all the information it needs to  evaluate funding requests for modularity.
Why GAO Did This Study

Modularity is a major restructuring of the entire Army, involving the creation of brigade combat teams that will have a common design and will increase the pool of available units for deployment. The Army is undertaking this initiative at the same time it is supporting the Global War on Terrorism, and developing transformational capabilities such as the Army Future Combat Systems. To achieve modularity, the Army currently estimates it will need $48 billion. The Department of Defense's (DOD) request for fiscal year 2005 supplemental funds includes $5 billion for modularity. The Army plans for another $5 billion to be funded from fiscal year 2006 supplemental funds and the remaining $38 billion from DOD's annual appropriation from fiscal years 2006 through 2011. Our testimony addresses: (1) the Army's goals and plans for modularity, (2) challenges the Army faces in staffing and equipping its modular combat brigades, (3) key decisions that could affect requirements, and (4) the Army's cost estimates and funding plans. This testimony is based on ongoing GAO work examining Army modularity plans and costs. Our work has been primarily focused on the Army's active forces.

What GAO Found

The Army has embarked on a major initiative to create modular units to better meet the near-term demand for forces and improve its capabilities to conduct full-spectrum operations. Modularity is a major undertaking because it affects both the active and reserve components as well as combat and support forces. Successfully implementing this initiative will require many changes such as new equipment and facilities, a different mix of skills among Army personnel, and significant changes to training and doctrine. By the end of fiscal year 2006, the Army plans to reorganize its 10 active divisions, expanding from 33 brigades to 43 modular brigade combat teams, and by fiscal year 2010, create new types of command headquarters. The Army has completed or is in the process of establishing modular brigades in four of its active divisions. While the Army has made progress in establishing modular brigades, it is likely to face several challenges in providing its new modular units with some required skilled personnel and equipment that are needed to achieve planned capabilities. For example, the Army has not provided its new modular brigades with required quantities of critical equipment such as unmanned aerial vehicles, communications equipment, and trucks because they are not currently available in sufficient quantities. Moreover, it may take years to meet increased requirements for critical skills such as military intelligence analysts because they are in high demand and take years to train. In addition, the Army has not yet made a number of key decisions that could further increase requirements for equipment and personnel. First, the Army has not yet decided whether to recommend an increase in the number of active brigade combat teams from 43 to 48. Also, it is assessing the costs and benefits of adding one more combat maneuver battalion to its new modular brigades. Finally, the Army has not yet finalized the design of higher echelon and support units. Until designs are finalized and key decisions are reached, the Army will not have a complete understanding of the equipment and personnel that are needed to fully achieve its goals. The costs associated with modularizing the entire Army are substantial, continuing to evolve, and likely to grow beyond current estimates. As of March 2005, the Army estimated it will need about $48 billion to fund modularity--representing an increase of 71 percent from its earlier estimate of $28 billion in 2004. However, this estimate may not reflect all potential costs, such as for fully equipping the modular force as designed. Also, if the Army decides to add additional brigades or make other design changes, additional costs may be incurred. Furthermore, some costs are uncertain. For example, it will be difficult for the Army to determine facility requirements and related costs until DOD finalizes plans for restationing forces from overseas. Until the Army provides a better understanding of the requirements and costs associated with modularity, DOD will not be well positioned to weigh competing priorities and make informed decisions nor will the Congress have the information it needs to evaluate funding requests.