The Army’s April 2006 Report to Congress Addressed the Areas Required, But the Army’s Strategy is Evolving

The Army’s April 2006 report to Congress on the status of its prepositioned  program addressed the areas required by Congress, but the Army has  significantly shifted its prepositioning strategy since then. According to the Army, this shift was based on insights gained from the  2006 Quadrennial Defense Review, but Army officials told us that recent  budget reprogramming decisions and worsening Army-wide equipment  shortfalls also influenced the reexamination. As a  result, the Army’s 2006 report was outdated soon after its publication and  should not be used by Congress or DOD for funding decisions. The Army Faces Major Strategic and Management Challenges As It Revises and Implements Its Prepositioning Program

The future success of the Army’s prepositioning program depends not only  on how well the Army aligns its efforts with those of the department as a  whole, but also on how well long-standing management issues are  addressed as the new strategic plan is implemented. While continuing to rely on stocks in  South Korea, the proposed strategy includes significant changes to the  program—among them, less reliance on heavy combat equipment afloat  and expanded reliance on heavy equipment in Kuwait, Qatar, and Italy. The Army plans to have this task completed by late December  2006. In fact, DOD  anticipates that when the DOD-wide strategy is issued the Army will have  to modify its service-specific prepositioning strategy to align with the new  requirements. Finally, since prepositioning is interconnected with airlift,  sealift, and overseas basing, the Army’s decisions will have an as-yet  undetermined effect on lift requirements and basing. Without sound requirements, the Army cannot reliably assess  the readiness of its programs. Army Lacks a Comprehensive Prepositioning Storage and Maintenance Facilities Plan

Although the Army reported maintenance and storage facility shortages to  Congress, it lacks a comprehensive plan for maintenance and storage  facilities for prepositioned stocks. Consequently, facility requirements are uncertain. The  Army took steps to revise its prepositioning strategy in the latter part of  2006; however, its efforts are not fully synchronized with the evolving  DOD-wide strategy. Setting and aligning broad strategies, however, will not be enough to  ensure success in the Army’s program over the longer term. Once the strategic direction is aligned with the DOD strategy, we  recommend that the Secretary of the Army develop an implementation  plan that    completes ongoing reevaluation of the secondary item and operational  project stock requirements as well as establishes systematic readiness  measurement and reporting of secondary items and operational project  stock programs,  identifies the optimal mix of storage and maintenance facilities at each  location to support the emerging strategy, and    prescribes oversight requirements for the maintenance of prepositioned  equipment to ensure that equipment is ready for combat. Appendix I: Scope and Methodology

To assess whether the Army’s report comprehensively addressed the  required reporting areas in Public Law 109-163, we reviewed the Army’s  prepositioned stocks program. We interviewed  officials from the Department of the Army, the Office of the Secretary of  Defense for Policy, the Department of Defense Joint Staff, the Army  Materiel Command, and the Army Sustainment Command and its  subordinate units at prepositioning locations in Europe, South Korea,  South Carolina, and Kuwait. U.S. Appendix II: Past Products Identifying Challenges Facing the Army and DOD Regarding Prepositioning Programs

The Army’s prepositioning program has faced a number of long-standing  challenges including inadequate oversight and management; equipment  and facility excesses and shortfalls; and invalid, inaccurate, poorly  defined, and otherwise questionable requirements. 2.
Why GAO Did This Study

Prepositioned military equipment and supplies on ships and overseas on land have become an integral part of the U.S. defense strategy. However, the Army's program has faced long-standing management challenges, including equipment excesses and shortfalls, invalid or poorly defined requirements, and maintenance problems. In Public Law 109-163, Congress required the Army to conduct an assessment of its prepositioning programs and required GAO to assess (1) whether the Army's report addressed the areas required by Congress, and (2) the major challenges the Army continues to face in its prepositioning program. GAO analyzed the Army's report and other information it obtained from the Joint Staff, the Army, and its subordinate commands to identify the issues affecting the Army's prepositioning program. GAO also visited prepositioned equipment sites in South Carolina, Europe, South Korea, and Kuwait.

What GAO Found

The Army's April 2006 report on the status of its prepositioning program addressed the areas required by Congress; for example, it included descriptions of operational capabilities, as well as inventory shortfalls expressed in terms of procurement costs. However, the Army significantly shifted its prepositioning strategy in the latter part of 2006, since that report was issued. According to the Army, this shift was based on insights gained from the 2006 Quadrennial Defense Review, but Army officials told us that budget reprogramming decisions and worsening Army-wide equipment shortfalls also influenced the expedited strategy revision. The Army's revised strategy proposes less reliance on heavy combat equipment afloat and the expansion of heavy equipment in Kuwait and Italy. As a result, the Army's April 2006 report to Congress is outdated, and neither Congress nor DOD should base funding decisions on it. The Army faces several major strategic and management challenges as it revises and implements its prepositioning program. From a strategic perspective, the Army cannot gauge how well its emerging strategy will align with DOD plans currently under development. The Army plans to begin implementing its revised strategy by the end of 2006. DOD has a departmentwide prepositioning study underway intended to set strategy and joint doctrine, but this will not be completed for several months and it anticipates that the Army will have to modify its prepositioning strategy when the DOD-wide strategy is issued. As a result, the Army is at risk of resourcing requirements that may be superseded by the DOD strategy. Moreover, because prepositioning is linked to airlift, sealift, and basing, the Army's decisions will have an as-yet undetermined effect on these areas. In addition to these strategic concerns, the Army faces three key management challenges. First, the Army has yet to determine sound secondary item and operational project stock requirements, and to systematically measure and report readiness. While the Army has been taking steps to address long-standing requirements-determination problems in certain parts of its program, the effort was not finished when GAO completed its work. Without accurate requirements and systematic readiness reporting, Army managers are not able to determine the extent to which the existing inventory reflects what the Army needs. Second, the Army lacks a comprehensive plan for maintenance and storage facilities for prepositioned stocks, resulting in uncertain future facility requirements. In the interim, prepositioned stocks are being stored outside, resulting in higher maintenance costs. Finally, inadequate maintenance oversight of the Army's prepositioning program has raised concerns about the true condition of the equipment at some locations. Until these strategic and management challenges are addressed, the Army will face uncertain risks should new conflicts occur.