DOD is also concerned about the adverse impact that spare parts  shortages have on the readiness of weapon systems. Strategic Plan Addresses Transformation, but Not Mitigation of Critical Spare Parts Shortages

The Army’s current strategic plan provides strategic goals, objectives,  milestones, and performance measures for force transformation efforts. Armywide Initiatives Improve Logistics Business Processes, but Are Not Focused on Mitigating Critical Spare Parts Shortages

The Army’s key logistics initiatives were designed to improve internal  business processes, but not specifically mitigate critical spare parts  shortages. The initiative’s effectiveness may be limited  because its efforts and results are not linked to or coordinated with the  goals and metrics of the Army’s other initiatives as part of an overall  approach to mitigating critical spare parts shortages in the future. Army Can Identify Readiness Impact of Additional Investment and Needs to Report This to Congress

While the Army has the means to link funding to a corresponding level of  readiness and reports this information in budget justification documents  (see app. II), it does not report how additional funding requests for spare  parts might impact readiness to decisionmakers such as Congress. The Army Materiel  Systems Analysis Activity uses the Supply Performance Analyzer Model  and the Selected Essential-Item Stockage for Availability Method Model to  determine the investment needed to reach a weapon system’s desired  supply availability rate. In addition,  the Army used an outside consultant to analyze the impact additional  investment in spare parts would have on readiness. For example, to  support a briefing to the Army Vice Chief of Staff in March 2001, the  Logistics Management Institute completed an analysis for the Army  showing that an additional $331 million for spare parts would increase the  mission-capable rate for the Apache and Blackhawk helicopters by   2.6 percent. Conclusions

The Army’s Transformation Campaign Plan serves as a mechanism to  transform the Army’s forces from its present posture to a more  strategically deployable and responsive force. The plan prescribes specific  goals and milestones to support this transformation process, but it lacks  specific focus on mitigating spare parts shortages. Furthermore, while some of the Army’s logistics  initiatives might increase the availability of spare parts in general, the lack  of specific and effective measures of performance will limit the Army’s  ability to ascertain progress in mitigating spare parts shortages that are  critical to equipment readiness. Recommendations for Executive Action

We recommend that the Secretary of Defense direct the Secretary of the  Army to    modify or supplement the Transformation Campaign Plan, or the  Armywide logistics initiatives to include a focus on mitigating critical  spare parts shortages with goals, objectives, milestones, and  quantifiable performance measures, such as supply availability and  readiness related outcomes and  implement the Office of Secretary of Defense recommendation to  report, as part of budget requests, the impact of additional spare parts  funding on equipment readiness with specific milestones for  completion. As our report clearly points out, without a focus on  mitigating critical spare parts shortages with goals, objectives, and  milestones included in the strategic plan or Armywide initiatives, we  believe there is increased likelihood that the Army’s progress will be  limited because it efforts may be ineffective or duplicative in mitigating  spare parts shortages that are critical to equipment readiness.
Why GAO Did This Study

Prior reports and studies have identified major risks in the Department of Defense's (DOD) management, funding, and reporting of spare parts spending programs. Spare parts shortages adversely affect the U.S. Army's operations and can compromise the readiness of weapon systems. To address these issues, Congress has fully funded DOD's requests for spare parts spending and in some instances increased funding for additional spare parts. Yet, the Army continues to experience spare parts shortages. Congress requested that GAO evaluate (1) the Army's strategic plans for reducing spare parts shortages, (2) the likelihood that key initiatives will reduce such shortages, and (3) the Army's capability to identify the impact on readiness of increased investments for spare parts.

What GAO Found

The Army's logistics strategic plan provides strategic goals, objectives, and milestones for force transformation efforts, but does not specifically address the mitigation of critical spare parts shortages. The Army's Transformation Campaign Plan, published in April 2001, serves as a mechanism to move the Army from its present posture to a more strategically deployable and responsive force. The plan prescribes specific goals and milestones to support the transformation process. However, it lacks objectives and performance measures it could use to show progress in mitigating critical spare parts shortages. The Army's six servicewide logistics initiatives are aimed at enhancing readiness by improving internal business processes that would increase supply availability. However, they were not designed to mitigate spare parts shortages. These processes include those that acquire, repair, and distribute spare parts. Recognizing that the Armywide initiatives were not designed to specifically focus on mitigating critical shortages, the Army recently started a new initiative to address individual spare parts shortages that affect key weapon systems readiness. However, this initiative is not part of the Armywide logistics improvement efforts, and therefore it is not coordinated with other initiatives and its results are not linked with the overall goals and performance measures. Absent this coordination and linkage, any systemic problems that the initiatives identifies may not be elevated to the Armywide initiatives for resolution and its benefit may be limited to improving the availability of only a few parts. The Army has the means to link funding to weapon system readiness, and reports this in its budget justification documents, but it does not report to Congress how additional investments in spare parts would increase readiness. The Army Materiel Systems Analysis Activity can use models to indicate the investment needed to reach a desired level of supply availability, along with the possible corresponding increase in readiness, and it has provided such information to Army units. Additionally, the Army has used consultants to project the impact of additional funding on the readiness of specific weapon systems and provided this to the Army Vice Chief of Staff. For example, the Logistics Management Institute projected that anadditional investment of $331 million for additional spare parts would increase the overall readiness of the Apache and Blackhawk helicopters by approximately 2.6 percent.