This is the accessible text file for GAO report number GAO-05-692R 
entitled 'Military Transformation: Actions Needed by DOD to More 
Clearly Identify New Triad Spending and Develop a Long-Term Investment 
Approach' which was released on August 4, 2005.

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August 4, 2005:

The Honorable Terry Everett:
Chairman:
The Honorable Silvestre Reyes:
Ranking Member:
Subcommittee on Strategic Forces:
Committee on Armed Services:
House of Representatives:

Subject: Military Transformation: Actions Needed by DOD to More Clearly 
Identify New Triad Spending and Develop a Long-term Investment Approach:

In response to your request, we issued a report in June 2005 on the 
Department of Defense's (DOD) progress in determining and allocating 
resources needed to implement the New Triad today and in the 
future.[Footnote 1] In that report, we made recommendations to the 
Secretary of Defense to provide greater visibility of the projected 
spending and future investments for DOD's efforts to create the New 
Triad and acquire future capabilities. On April 28, 2005, we provided 
DOD with a draft of that report for review and comment. DOD did not 
provide comments in time to incorporate them in that report, which went 
to printing on June 24, 2005. DOD provided its comments to us on June 
30, 2005. To present DOD's comments and provide our perspective on 
them, this report briefly summarizes our June 2005 report's objectives, 
results, and recommendations, along with DOD's comments and our 
evaluation of the comments. DOD's comments, which were provided by the 
acting Assistant Secretary of Defense for International Security 
Policy, are included as enclosure I to this report.

Summary of Objectives, Results, and Recommendations:

In our June 2005 report, we determined the extent to which DOD has (1) 
identified the projected spending for the New Triad in its Future Year 
Defense Program (FYDP) and (2) developed a long-term investment 
approach to identify and manage future investments needed to achieve 
the synergistic capabilities envisioned for the New Triad.

In its December 2001 Nuclear Posture Review, DOD significantly expanded 
the range of strategic capabilities to include not only the old Triad, 
which consisted of nuclear-armed intercontinental ballistic missiles, 
submarine-launched ballistic missiles, and strategic bombers, but also 
conventional and nonkinetic offensive strike and defensive 
capabilities. The review also called for revitalizing the U.S. research 
and development and industrial infrastructure that would develop, 
build, and maintain offensive forces and defensive systems and be 
capable of responding in a timely manner to augment U.S. military 
capabilities when necessary. According to DOD, the three legs of the 
New Triad-offensive strike, active and passive defenses, and responsive 
infrastructure-are intended to be supported by timely and accurate 
intelligence, adaptive planning, and enhanced command and control 
capabilities. The review stated that the synergism achieved through the 
integration of nuclear and conventional offensive strike and defensive 
capabilities would provide the President and Secretary of Defense with 
a broad array of military options to better address the spectrum of 
potential opponents and contingencies that may arise in the coming 
decades. Figure 1 shows the three legs of the New Triad and its 
supporting elements.

Figure 1: The New Triad:

[See PDF for Image]

Note: ICBMs = intercontinental ballistic missiles; SLBMs = submarine- 
launched ballistic missiles.

[End of Figure]

We found that although DOD established its New Triad in 2001, it has 
not developed a way to fully identify projected spending for New Triad 
programs in its FYDP. In light of the challenges DOD faces in 
transforming strategic capabilities in the current fiscal environment, 
decision makers need to have the best and most complete data available 
about the resources being allocated to the New Triad. Although DOD has 
identified some New Triad-related spending in the FYDP, our notional 
analysis of such spending included in the FYDP through 2009 indicates 
that overall spending for the New Triad could be much greater than 
DOD's limited analyses have identified. DOD has not fully identified 
New Triad spending because the diversity and scope of the New Triad and 
ambiguity of the concept make it difficult for DOD officials to reach 
agreement on a complete list of programs, according to DOD officials. 
Additionally, the current FYDP structure does not readily identify and 
aggregate New Triad spending. A mechanism to aggregate FYDP spending, 
known as a "virtual major force program," has been used by DOD to 
identify space funding and could be beneficial in tracking New Triad 
funding, according to some DOD officials including the Commander of the 
U.S. Strategic Command. Without some mechanism to aggregate funding 
associated with the New Triad, DOD will be limited in its ability to 
guide and integrate New Triad spending.

We also found that despite the long lead time generally needed to 
develop and acquire new systems and the need to consider long-term 
affordability issues, DOD has not developed an overarching and 
integrated long-term investment approach for acquiring new capabilities 
and replacing some or all of its aging systems that provide New Triad 
capabilities. Best practices show that long-term capital planning is 
needed to help organizations define direction, establish priorities, 
and plan future budgets. While DOD has identified some near-term 
investments, its investment plans are incomplete because some key 
capabilities for the New Triad have not been fully assessed in context 
of the New Triad and long-term replacement of key platforms have not 
been assessed in the context of the new security environment and DOD- 
wide affordability challenges. Although DOD recognizes the need for a 
long-term investment approach, it has not begun to develop one because 
its concepts for nonnuclear strike and missile defense are not fully 
mature. However, delaying the preparation of a long-term investment 
approach puts DOD at risk of not developing an affordable strategy. 
Additionally, DOD and Congress will not have sufficient information to 
effectively determine future investment costs, the priorities, and 
trade-offs needed to sustain New Triad implementation. While we agree 
that some concepts are continuing to evolve, and that new systems are 
still under development, we do not believe that these circumstances 
preclude DOD from beginning to plan for the future of the New Triad. As 
new information becomes available, we would expect to see adjustments 
in DOD's plans-that is the nature of long-term planning.

To strengthen DOD's implementation of the New Triad and provide greater 
transparency of resources that are being applied to developing, 
acquiring, and sustaining the needed capabilities, we recommended in 
our June 2005 report that the Secretary of Defense take the following 
four actions:

* Direct the Director, Office of Program Analysis and Evaluation, in 
consultation with the Under Secretary of Defense (Comptroller), to (1) 
develop and obtain approval of a comprehensive list of program elements 
in the FYDP, which support activities for developing, acquiring, and 
sustaining New Triad capabilities; (2) modify the FYDP to establish a 
virtual major force program for the New Triad by creating new data 
fields that would clearly identify and allow aggregation of New Triad- 
related program elements to provide increased visibility of the 
resources allocated for New Triad activities; and (3) report each year 
the funding levels for New Triad activities and capabilities in the 
department's summary FYDP report to Congress. The Secretary of Defense 
should direct that these three actions be completed at or about the 
time when the President's budget for fiscal year 2007 is submitted to 
Congress.

* Direct the Under Secretaries of Defense for Policy and Acquisition, 
Technology, and Logistics to develop an overarching and integrated long-
term investment approach for the New Triad that provides decision 
makers with information about future joint requirements, projected 
resources, spending priorities and trade-offs, milestones, and funding 
time lines. As part of developing and implementing this approach, DOD 
should leverage the analyses, assessments, and other information 
prepared under the Joint Capabilities Integration and Development 
System process. The Secretary of Defense should direct that development 
of a long-term investment approach be completed in time for it to be 
considered in the department's preparation of its submission for the 
President's budget for fiscal years 2008 and 2009 and be updated, as 
needed, to adapt to changing circumstances.

Agency Comments and Our Evaluation:

DOD's comments on a draft of our June 2005 report are summarized below 
and reproduced in enclosure I. DOD concurred with one of that report's 
four recommendations.

DOD did not concur with our three recommendations to develop and obtain 
approval of a comprehensive list of New Triad-related program elements 
in the FYDP; modify the FYDP to establish a virtual major force 
program; and report funding levels for the New Triad in the 
department's summary report to Congress, which DOD addressed as one 
recommendation in its comments. DOD believed that developing an 
official New Triad virtual major force program would be difficult and 
would not contribute substantially to developing coherent long-range 
investment plans. It believed that a New Triad virtual major force 
program would be more difficult to develop than the one that was 
created for space because the New Triad is presently much more complex 
and difficult to separate from other DOD-wide programs than the 
programs for space. DOD stated that while it is fairly straightforward 
to identify some program elements that contribute substantially to a 
particular New Triad capability, it would be highly subjective and 
difficult to attribute other elements to the New Triad. For example, 
DOD believed that it would be very hard to determine which conventional 
strike program elements to include in the New Triad. It further stated 
that categorizing science and technology efforts as relevant to the New 
Triad would also be very subjective. DOD believed that placing a 
program element in the New Triad virtual major force program would not 
automatically make a program a high priority or that the department 
would set aside funding for New Triad programs. Furthermore, DOD 
believed that a list of New Triad program elements should be more 
narrowly defined than the notional list prepared by GAO and that a New 
Triad major force program should include only those program elements 
that are most central to or contribute most directly to New Triad 
capabilities.

We continue to believe that each of these three recommendations have 
merit and, if implemented collectively, would provide DOD and 
congressional decision makers with the most complete accounting of the 
projected spending planned for the New Triad over the next several 
years as they deliberate the budget and make decisions on the 
affordability, sustainability, and trade-offs among efforts to develop 
and acquire capabilities. As our June 2005 report states, DOD needs to 
move beyond a broad conceptual framework for the New Triad it 
articulated in December 2001 and begin to identify the program elements 
currently in its FYDP that are intended to provide capabilities for the 
New Triad, whether they are fully or not fully dedicated to its 
missions. Establishing a virtual major force program for the New Triad 
in the FYDP would provide an important mechanism for DOD and Congress 
to continuously identify and track projected spending, trends, and 
priorities and enhance an understanding of the progress made by DOD in 
developing and shaping New Triad capabilities. Our notional list of New 
Triad-related program elements was intended to provide an illustrative 
example of how a comprehensive list could be developed and we agree 
that it could be more narrowly defined if necessary. We believe that 
knowledgeable DOD officials should be able to agree on the most 
relevant program elements that make up the New Triad. DOD predicated 
the New Triad concept on creating a synergy between the capabilities 
provided by nuclear and conventional strike; active and passive 
defense; responsive infrastructure; and enhanced command and control, 
planning, and intelligence. But without some coherent and systematic 
attempt to identify program elements in the FYDP and aggregate and 
report on those elements, DOD stakeholders and congressional decision 
makers do not have the information they need to understand how this 
synergy is being achieved and to make decisions on programs that affect 
the creation and success of the New Triad concept. We also believe that 
a comprehensive and approved list of New Triad program elements could 
provide a foundation for developing long-range investment plans by 
helping to better define the New Triad and the capabilities currently 
being developed and acquired, their availability, and the scope of 
those efforts. Additionally, we believe that Congress could benefit in 
its deliberations on funding levels for New Triad-related programs in 
the President's budget for fiscal year 2007 if DOD were to fully 
implement our recommendations at or about the time that budget is 
submitted to Congress.

DOD concurred with our recommendation to develop an overarching and 
integrated long-term investment approach for the New Triad. In its 
comments, DOD stated that its recently completed Nuclear Posture Review 
Strategic Capability Assessment provides an initial effort toward that 
goal by identifying shortfalls in capabilities that would be used to 
develop individual investment strategies. The department stated that 
these individual plans and strategies are required as well as an 
overarching integration of these efforts. DOD also agreed that it 
should leverage the analysis, assessments, and other information 
prepared under the Joint Capabilities Integration and Development 
System process as part of developing and implementing this approach. We 
support DOD's efforts in this direction and look forward to additional 
actions by the department to bring this approach about, particularly to 
support preparation of its submission for the President's budget for 
fiscal years 2008 and 2009. Such a long-term investment approach will 
not only be of great value to the department for identifying and 
prioritizing its resources for acquiring future New Triad capabilities, 
but it will assist Congress in its deliberations on New Triad-related 
initiatives and programs.

Matters for Congressional Consideration:

On the basis of DOD's comments on our recommendations regarding actions 
for DOD to take to provide greater visibility of projected New Triad 
spending in the FYDP, as discussed above, Congress should consider 
requiring the Secretary of Defense to:

 develop and obtain approval of a comprehensive list of program 
elements in the FYDP, which support activities for developing, 
acquiring, and sustaining New Triad capabilities;

 modify the FYDP to establish a virtual major force program for the 
New Triad by creating new data fields that would clearly identify and 
allow aggregation of New Triad-related program elements to provide 
increased visibility of the resources allocated for New Triad 
activities; and:

 report each year the funding levels for New Triad activities and 
capabilities in the department's summary FYDP report to Congress.

Congress should also consider requiring DOD to complete these actions 
at or about the time when the President's budget for fiscal year 2007 
is submitted to Congress.

We are sending copies of this report to interested congressional 
committees; the Secretary of Defense; the Commander, U.S. Strategic 
Command; and the Director, Office of Management and Budget. We will 
make copies available to others upon request. In addition the report 
will be available at no charge on the GAO Web site at http://
www.gao.gov.

If you or your staff have any questions regarding this report, please 
contact me at (202) 512-4402 (stlaurentj@gao.gov). Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major contributions 
to this report are listed in enclosure II.

Sincerely yours,

Signed by:
Janet A. St. Laurent:
Director, Defense Capabilities and Management:

Enclosures - 2:

Enclosure I:

Comments from the Department of Defense:

Assistant Secretary Of Defense:
2900 Defense Pentagon:
Washington, DC 20301-2900:

Ms. Janet A. St. Laurent:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:

June 30, 2005:

Dear Ms. St. Laurent:

This is the Department of Defense (DoD) response to the Government 
Accountability Office (GAO) draft report GAO-05-540, "MILITARY 
TRANSFORMATION: Actions Needed by DOD to More Clearly Identify New 
Triad Spending and Develop a Long-term Investment Approach," dated 
April 28, 2005, (GAO Code 350475).

The DoD nonconcurs with Recommendation # 1 and concurs with 
Recommendation #2. Detailed comments on the GAO recommendations and 
report are attached. The DoD appreciates the opportunity to comment on 
the draft report.

Signed by:

Mira R. Ricardel:
Assistant Secretary of Defense for International Security Policy: 
(Acting):

Attachment:
As stated:

Gao Draft Report--Dated April 28, 2005 GAO Code 350475/GAO-05-540:

"Military Transformation: Actions Needed by DOD to More Clearly 
Identify New Triad Spending and Develop a Long-term Investment Approach"

Department Of Defense Comments To The Recommendations:

Recommendation l: The GAO recommended that the Secretary of Defense 
direct the Director, Office of Program Analysis and Evaluation, in 
consultation with the Under Secretary of Defense (Comptroller), to: (1) 
develop and obtain approval of a comprehensive list of program elements 
in the Future Years Defense Program (FYDP), which support activities 
for developing, acquiring, and sustaining New Triad capabilities; (2) 
modify the FYDP to establish a virtual major force program for the New 
Triad by creating new data fields that would clearly identify and allow 
aggregation of New Triad-related program elements to provide increased 
visibility of the resources allocated for New Triad activities; and (3) 
report each year the funding levels for New Triad activities and 
capabilities in the Department's summary FYDP report to Congress. The 
Secretary of Defense should direct that these three actions be 
completed at or about the time when the President's budget for fiscal 
year 2007 is submitted to Congress. (Page 35/GAO Draft Report):

DOD Response: Nonconcur. Developing an official New Triad virtual major 
force program (MFP) would be difficult and we believe that such a 
virtual MFP would not contribute substantially to developing coherent 
long-range investment plans. The following material expands on these 
concerns.

Not Simple As The New Triad Adapts To Future Needs: Developing a New 
Triad Virtual MFP would be much more difficult than developing a Space 
Virtual MFP, because the New Triad is presently much more complex and 
difficult to separate from other DoD-wide programs than Space. The New 
Triad has today many more components than the old Cold War triad. 
Moreover, future mission capability needs, future threat developments, 
and innovative technology applications will necessarily mean changing 
components. In some cases, it might be fairly straightforward to decide 
whether a particular program should be included as a Program Element if 
it contributes substantially to a particular New Triad capability. In 
other cases, the determination would be highly subjective and difficult 
to attribute to New Triad or General Purpose Forces. For example:

Offensive Strike: It would be fairly straightforward to include the set 
of "Old Triad" Program Elements in the New Triad, although there might 
be major differences of opinion on how to deal with the tanker force 
(and tanker replacement). However, it would be very hard to determine 
which conventional strike Program Elements to include in the New Triad.

Active and Passive Defenses: Programs in this category would probably 
include ballistic missile defense, cruise missile defense, and chem/bio 
defense. Unfortunately, many of the systems relevant to cruise missile 
defense are also relevant to general air defense. There appears to be 
no straightforward criteria on which to obtain agreement on how to 
handle such multi-role systems.

Responsive Infrastructure: Most of the government-owned New Triad- 
related infrastructure is in NNSA. But much of the infrastructure for 
designing and making DoD New Triad systems is in private industry, and 
the viability/responsiveness of this infrastructure tends to follow DoD 
investments in the relevant systems. As such, there is no valid method 
to account for DoD-relevant private infrastructure.

Command, Control, Intelligence, and Planning: There are some planning 
systems that are dedicated to long-range strike and that definitely 
support the New Triad concept (e.g., the ISPAN system at USSTRATCOM). 
While satellites for detecting ballistic missile launches are 
definitely part of the New Triad, DoD has large investments in numerous 
other C4ISR systems that might or might not be classed as part of the 
New Triad, depending on highly subjective determinations.

A final consideration is that many Science and Technology efforts could 
be considered relevant to the New Triad as well as other important 
capabilities. Categorizing such programs would be very subjective.

Questionable Utility: Even if the Department produces an officially 
endorsed list of Program Elements that comprise the New Triad, it is 
not clear that this will help in developing coherent long-range 
investment plans --a "road map" that the Department really needs. Being 
in the New Triad MFP would not automatically make a program a high 
priority, and it is very unlikely that the Department will "fence" 
funding for New Triad programs. For example, everyone agrees that 
bombers and ICBMs are part of the New Triad, but this agreement has not 
been of assistance in developing long-range investment plans for those 
systems.

Scope Of New Triad Virtual MFP: Finally, if the Department were to 
develop a New Triad Virtual MFP, we believe the list of New Triad 
Program Elements should be more narrowly defined than the draft list 
prepared by the GAO. A Virtual MFP should include only those program 
elements that are most central to, or contribute most directly/
exclusively to, New Triad capabilities. The Cold War-era strategic 
nuclear triad consisted of a few well-defined elements. The New Triad, 
on the other hand, consists of a much wider range of capabilities, as 
described above. Most of these programs are not exclusively for the New 
Triad but also provide capabilities for general-purpose forces. The 
GAO's very long list of New Triad Program Elements (Appendix III) could 
easily capture a disproportionate percentage of the DoD FYDP, and many 
of the "New Triad" programs listed could be more readily attributed to 
general-purpose forces than to the New Triad. Increasing the number of 
questionable Program Elements in a New Triad Virtual MFP would reduce 
the already uncertain utility of such a Virtual MFP.

Recommendation 2: The GAO recommended that the Secretary of Defense 
direct the Under Secretary of Defense (Policy) and the Under Secretary 
of Defense (Acquisition, Technology and Logistics) to develop an 
overarching and integrated long-term investment approach for the New 
Triad that provides decision makers with information about future joint 
requirements, projected resources, spending priorities and trade-offs, 
milestones, and funding time-lines. As part of developing and 
implementing this approach, DoD should leverage the analysis, 
assessments, and other information prepared under the Joint 
Capabilities Integration and Development System process. The Secretary 
of Defense should direct that development of a long-term investment 
approach be completed in time for it to be considered in the 
Department's preparation of its submission for the President's budget 
for fiscal years 2008 and 2009 and be updated, as needed, to adapt to 
changing circumstances. (Pages 35 and 36/GAO Draft Report):

DOD Response: Concur. We agree that the Department needs overarching 
and integrated long-term investment plans for major New Triad 
capabilities, such as long-range strike, strategic C3, and ballistic/
cruise missile defense. The recently completed Nuclear Posture Review 
Strategic Capability Assessment provides an initial effort towards that 
goal through efforts to identify shortfalls in capabilities that could 
then be used to develop individual investment strategies. Such efforts 
will be required as well as an overarching integration of these 
efforts. Investment plans and strategies should provide decision makers 
with information about future joint requirements, projected resources, 
spending priorities and trade-offs, milestones, and funding time-lines. 
We also agree that, as part of developing and implementing this 
approach, DoD should leverage the analysis, assessments, and other 
information prepared under the Joint Capabilities Integration and 
Development System (JCIDS) process.

Enclosure II:

GAO Contact and Staff Acknowledgments:

GAO Contact: Janet A. St. Laurent (202) 512-4402:

Acknowledgments In addition to the individual named above, Gwendolyn R. 
Jaffe, Mark J. Wielgoszynski, David G. Hubbell, Kevin L. O'Neill, Julie 
M. Tremper, and Renee S. McElveen made key contributions to this report.

(350736):

FOOTNOTES

[1] See GAO, Military Transformation: Actions Needed by DOD to More 
Clearly Identify New Triad Spending and Develop a Long-term Investment 
Approach, GAO-05-540 (Washington, D.C.: June 30, 2005).