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Integration Plan Is Reasonable, but Some Factors Could Affect 
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Report to Congressional Committees:

United States Government Accountability Office:

GAO:

August 2004:

FORCE STRUCTURE:

Department of the Navy's Tactical Aviation Integration Plan Is 
Reasonable, but Some Factors Could Affect Implementation:

GAO-04-900:

GAO Highlights:

Highlights of GAO-04-900, a report to the Senate and House Committees 
on Appropriations and the Senate and House Committees on Armed 
Services: 

Why GAO Did This Study:

The Fiscal Year 2004 Defense Appropriations Act and the Senate Report 
for the 2004 National Defense Authorization Act mandated that GAO 
examine the Navy and Marine Corps’ Tactical Aviation Integration Plan. 
In response to these mandates, this report addresses (1) how Navy and 
Marine Corps operational concepts, force structure, and procurement 
costs change; (2) the methodology and assumptions the services used to 
analyze the potential for integrating the forces; (3) the analytical 
process the services used to decide which reserve squadrons to 
decommission; and (4) other factors that might affect implementation of 
the Plan.

What GAO Found:

Concerns about the affordability of their prior tactical aviation 
procurement plan prompted the Navy and Marine Corps to agree to a new 
Tactical Aviation Integration Plan. Under this Plan, the two services 
will perform their missions using fewer units of more capable aircraft 
and reducing total program aircraft procurement costs by $28 billion 
over the next 18 years. Operationally, the Navy and Marine Corps will 
increase the extent to which their tactical aviation units are used as 
a combined force to accomplish both services’ missions. The Plan also 
reduces the services’ tactical aviation force structure by 
decommissioning five squadrons, thus decreasing the number of Navy and 
Marine Corps squadrons to 59, and reduces the total number of aircraft 
they plan to buy from 1,637 to 1,140.

The Department of the Navy based its conclusion that it could meet the 
Navy and Marine Corps’ operational requirements with a smaller force 
primarily on the findings of a contractor study that evaluated the 
relative capability of different tactical aviation force structures. 
GAO’s review of the contractor’s methodology and assumptions about 
force structure, budget resources, and management efficiencies suggests 
that much of the analysis appears reasonable. However, GAO noted some 
limitations—including the lack of analytical support for reducing the 
number of backup aircraft—increase the risk that the smaller force will 
be less effective than expected. 

The Navy and Marine Corps each followed a different process in 
selecting a reserve squadron to decommission. The Marine Corps made a 
clear and well documented analysis of the operational, fiscal, 
logistical, and personnel impacts of different options that appears to 
provide decision makers with a reasonable basis for selecting the 
Reserve unit to decommission. By contrast, the Navy selected its 
reserve squadron without clear criteria or a documented, comprehensive 
analysis, and thus with less transparency in its process. 

Two other factors that might affect successful implementation of the 
Plan are the potential unavailability of readiness funding and delays 
in fielding the new force. Although the contractor recommended that the 
Navy identify future readiness-funding requirements, to date, the Navy 
has not conducted this analysis. In addition, the Department of the 
Navy is experiencing engineering and weight problems in developing the 
Joint Strike Fighter that will cause it to be delayed until 2013, at 
least 1 year later than had been projected, and other high risks to 
the program remain. Because these delays will cause the Navy to operate
legacy aircraft longer than expected, they might also increase 
operations and maintenance costs, making an analysis of future 
readiness funding requirements even more important.

What GAO Recommends:

To enhance the potential that the future tactical aviation force will 
meet the services’ mission needs and ensure more transparency in future 
decommissioning decisions, GAO recommends that the Secretary of 
Defense:

* direct that the number of needed backup aircraft be assessed,
* develop guidance and methodology for analyzing future decommissioning 
decisions, and
* direct that future readiness funding for the future tactical aviation 
force be analyzed.

In written comments, the Department of Defense generally agreed with 
the recommendations.

www.gao.gov/cgi-bin/getrpt?GAO-04-900.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact George Morse at (757) 
552-8108 or morseg@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

Plan Changes the Navy and Marine Corps' Operational Concepts and 
Reduces Force Structure to Achieve Procurement Savings:

Navy's Analysis Generally Appears Reasonable, but Some Limitations 
Could Understate Risks:

In the Absence of DOD Criteria, the Marine Corps and Navy Used 
Different Methods and Documentation Standards to Determine Which 
Reserve Units to Decommission:

Two Other Factors Could Affect the Plan's Implementation and Add Risk:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluation:

Scope and Methodology:

Appendix I: Comments from the Department of Defense:

Appendix II: GAO Contacts and Staff Acknowledgments:

Tables:

Table 1: Force Structure Summary for the Previous Program and the Navy 
and Marine Corps' Integration Plan:

Table 2: Previous Program and the Navy and Marine Corps' Integration 
Plan Aircraft Procurement Summary:

Table 3: Marine Corps Criteria for Selecting a Reserve Unit 
to Decommission:

Figures:

Figure 1: Navy's Projected Tactical Aviation Procurement Budget 
Compared with Original Procurement Plan, Fiscal Years 2002-26:

Figure 2: Capability Scores Determined by Contractor's Panel 
of Experts:

Abbreviations:

DOD: Department of Defense:

GAO: Government Accountability Office:

United States Government Accountability Office:

Washington, DC 20548:

August 13, 2004:

Congressional Committees:

The Department of the Navy formerly planned to spend almost $92 billion 
by fiscal year 2021 to replace legacy F/A-18C/D, F-14, and AV-8 
aircraft with newer F/A-18E/Fs and the future Joint Strike Fighter 
aircraft. Concerned that it could not afford to purchase as many of 
these aircraft as originally planned, however, in fiscal year 2002 the 
Department of the Navy announced a new Tactical Aviation Integration 
Plan, whereby the Navy and Marine Corps concluded that they would be 
able to achieve their missions with fewer aircraft and units by 
operating as a combined force.

Out of concern about how the Navy and Marine Corps' future plans for 
their tactical aviation forces would affect mission capability, 
Congress mandated that GAO examine the Navy and Marine Corps' Tactical 
Aviation Integration Plan.[Footnote 1] In the Fiscal Year 2004 Defense 
Appropriations Act, Congress directed GAO to assess Navy and Marine 
Corps requirements for tactical aviation and the role of Navy and 
Marine Corps Reserve assets in meeting such requirements.[Footnote 2] 
In addition, the Senate Report for the National Defense Authorization 
Act for Fiscal Year 2004 directed GAO to analyze the Navy and Marine 
Corps' Plan to determine the validity of the assumptions made in 
formulating the Plan, the expected impact of the Plan on Navy and 
Marine Corps force structure, and the ability of the smaller force 
structure to meet operational requirements.[Footnote 3] After meeting 
with your offices, we agreed on a strategy for completing work in 
response to both mandates and agreed to provide an interim briefing and 
a final report. We briefed your offices on our results from late 
February through April 2004.

Based on our work in response to these mandates, this final report 
addresses the following questions:

1. How would Navy and Marine Corps operational concepts, force 
structure, and procurement costs change under the Plan?

2. What methodology and assumptions did the Navy and Marine Corps use 
to analyze the potential for integrating tactical aviation assets, and 
what, if any, limitations affect the services' analysis?

3. To what extent did the Navy and Marine Corps use a thorough and 
well-documented process to assess which reserve squadrons should be 
decommissioned in fiscal year 2004 to implement the Plan?

4. What other factors might affect the implementation of the Plan?

To accomplish these objectives, we analyzed the contractor study that 
supports the Plan by reviewing its methodology, major assumptions, and 
modeling input and approach. We also obtained information from 
officials at Navy and Marine Corps Headquarters, Navy and Marine Corps 
Reserve Headquarters, Joint Forces Command, Atlantic and Pacific Naval 
Air Forces Headquarters, and Marine Forces Atlantic Headquarters in 
order to verify and assess both the information contained in the study 
and the resulting decisions about force structure, procurement plans, 
and operational impacts. We assessed the reliability of the services' 
data by reviewing the methodology and pertinent contractor and service 
information used for the study and the Plan. In addition, as part of 
our analysis, we visited selected Navy and Marine Corps Reserve 
tactical aviation units in order to get their perspective on the 
possible decommissioning of reserve squadrons as well as future roles 
and missions.

Results in Brief:

Concerns about the affordability of their future tactical aviation 
procurement plan prompted the Navy and Marine Corps to agree to a Plan 
whereby the two services will be performing their missions using fewer 
units of more capable aircraft and reducing total program aircraft 
procurement costs from $92 billion to about $64 billion over the next 
18 years. Operationally, the Navy and Marine Corps will increase the 
extent to which their tactical aviation units are used as a combined 
force for both services. The Plan will also reduce the services' 
tactical aviation force structure by decommissioning three active and 
two reserve squadrons, thus decreasing the number of Navy and Marine 
Corps squadrons to 59. By decreasing the number of squadrons, the 
number of aircraft in some squadrons, and the number of backup 
aircraft, the Department of the Navy would decrease the total tactical 
aviation aircraft procurement from the original program's 1,637 to 
1,140 aircraft, a reduction of 497 aircraft.

The Department of the Navy based its conclusion that it could meet the 
Navy and Marine Corps' operational requirements with a smaller force 
primarily on the findings of a contractor study that evaluated the 
relative capability of different tactical aviation force structures. 
Although our review of the contractor's methodology and assumptions 
about force structure, budget resources, and management efficiencies 
suggests that much of the contractor's analysis appears to be 
reasonable, we also noted some limitations in the study that add risk. 
Specifically, we found the following:

* The contractor modeled the Joint Strike Fighters aboard Navy carriers 
as if all would have the same performance characteristics despite 
knowing that the Marine Corps' Short Takeoff and Vertical Landing 
version has significantly less range and payload capability than the 
Navy's carrier version.

* Following the contractor's recommendation, the Navy decided to reduce 
the number of backup aircraft it would buy predicated on expected lower 
attrition rates and improvements in maintenance management without 
fully analyzing the feasibility of achieving these efficiencies.

* The contractor's force structure analysis showed that the new force 
had significantly more capability than the current force but relied on 
aircraft performance scores assigned by a panel of experts. However, a 
sensitivity analysis performed by the contractor also showed that 
variations in these scores significantly affected the forces' relative 
capability and therefore the increased effectiveness might not be as 
high as reported.

Each of these factors increases the risk that the future smaller force 
will not be as effective at accomplishing the Navy and Marine Corps' 
tactical missions as the Department of Navy expects.

The Navy and Marine Corps each followed a different process in 
selecting a reserve squadron to decommission. The process developed by 
the Marine Corps Reserve produced a well-documented analysis of the 
operational, fiscal, logistical, and personnel impacts of different 
options that appears to provide decision makers with a sound basis for 
selecting the reserve unit to decommission. By contrast, the Navy 
selected the reserve squadron to decommission without clear criteria or 
a documented comprehensive analysis supporting its decision. In the 
absence of standard Department of Defense guidance for analyzing and 
documenting decommissioning alternatives, a lack of transparency could 
occur in conjunction with future service force structure decisions.

Two other factors might affect successful implementation of the Plan, 
including the potential uncertainty about future requirements for 
readiness funding and delays in fielding the new force. Although the 
contractor recommended that the Navy identify future readiness-funding 
requirements and ensure that a mechanism be in place for fully funding 
these accounts, to date, the Navy has not conducted this analysis. 
Without an examination of future funding requirements, the Navy cannot 
know whether sufficient funds will be available to maintain readiness 
levels that are adequate for the smaller tactical aviation force to 
meet the mission needs of both the Navy and Marine Corps. In addition, 
the Department of the Navy is also experiencing engineering and weight 
problems in developing the Joint Strike Fighter that will cause it to 
be delayed until 2013--at least 1 year beyond when it had been 
projected to begin receiving the aircraft--and other risks to the 
program remain. Because these delays will cause the Navy to operate 
legacy aircraft longer than expected, they might also increase 
operation and maintenance costs, making an analysis of future readiness 
funding requirements even more important.

To mitigate the risks associated with implementing the Navy and Marine 
Corps' Plan and enhance future decommissioning decisions, we are 
recommending that (1) the Secretary of the Navy conduct additional 
analyses of the expected efficiencies essential to reducing the number 
of backup aircraft and the necessary readiness funding and (2) the 
Secretary of Defense require comprehensive and well-documented analyses 
when services make decisions about which units to decommission. In 
written comments on a draft of this report, the Department of Defense 
generally agreed with our recommendations and cited actions it plans to 
take to implement them. Although some of the department's proposed 
actions appear consistent with our recommendations, we believe it needs 
to take further steps. The department should develop clear criteria for 
the services to use in making future unit decommissioning decisions and 
require them to retain documentation of their analyses to facilitate 
oversight and transparency. The department's comments and our 
evaluation are on page 21 of this report.

Background:

The Department of Defense's 2001 Defense Planning Guidance tasked the 
Department of the Navy to conduct a comprehensive review to assess the 
feasibility of fully integrating Navy and Marine Corps aviation force 
structure to achieve both effectiveness and efficiency. The Department 
of the Navy narrowed the study to include only fixed-wing tactical 
aviation assets because of affordability concerns. Specifically, Navy 
officials were concerned that the projected procurement budget would 
not be sufficient to buy as many F/A-18E/Fs and Joint Strike Fighter 
aircraft as originally planned. The difference between the funding 
needed to support the Navy's original plan for procuring tactical 
aircraft and the Navy's projected procurement budget is shown in figure 
1.

Figure 1: Navy's Projected Tactical Aviation Procurement Budget 
Compared with Original Procurement Plan, Fiscal Years 2002-26:

[See PDF for image]

Note: The profile shown for the Joint Strike Fighter (JSF) for 
fiscal years 2005-11 reflects funding for both the F/A-18E/F and the 
Joint Strike Fighter.

[End of figure]

Figure 1 shows that, starting in fiscal year 2005, the Navy's typical 
aviation allocation of $3,200 million per year would not be sufficient 
to support the previous procurement plan for F/A-18E/F and Joint Strike 
Fighter aircraft.

In December 2001, the Chief of Naval Operations and the Commandant of 
the Marine Corps jointly commissioned a contractor to study the 
feasibility of integrating Naval tactical aviation. The study prompted 
a memorandum of agreement between the Navy and Marine Corps in August 
2002 to integrate their tactical aviation assets and buy fewer aircraft 
than originally planned.

Plan Changes the Navy and Marine Corps' Operational Concepts and 
Reduces Force Structure to Achieve Procurement Savings:

The Plan proposes that the Navy and Marine Corps (1) merge operational 
concepts; (2) reduce the number of squadrons, aircraft per squadron, 
and backup aircraft; and (3) reduce the total number of aircraft to be 
procured in the future. The Department of the Navy anticipates that 
these changes will save approximately $28 billion in procurement costs 
over the next 18 years through fiscal year 2021.

Navy and Marine Corps Merge Concepts of Operation:

Operationally, the Navy and Marine Corps would increase the extent to 
which their tactical aviation units are used as a combined force for 
both services. Under the Plan, the Navy and Marine Corps would increase 
cross deployment of squadrons between the services and would further 
consolidate missions and operations through changes in aircrew training 
and the initiation of command-level officer exchanges.

Under the Plan, the Marine Corps would increase the number of squadrons 
dedicated to carrier air wings, and the Navy would begin to dedicate 
squadrons to Marine Aircraft Wings. In 2003 the Marine Corps began to 
provide the Navy with the first of six additional dedicated squadrons 
to augment four squadrons already integrated into carrier air wings 
during the 1990s. As a result, each of the Navy's 10 active carrier air 
wings would ultimately include one Marine Corps squadron by 2012. 
Concurrently, the Navy would integrate three dedicated squadrons into 
Marine Aircraft Wings by 2008, primarily to support the Marine Corps 
Unit Deployment Program[Footnote 4] rotations to Japan. The first Navy 
squadron to deploy in support of Marine Corps operations would occur in 
late fiscal year 2004, with other squadrons to follow in fiscal years 
2007 and 2008.

As part of the new operating concept, the Department of the Navy would 
satisfy both Navy and Marine Corps missions using either Navy or Marine 
Corps squadrons. Traditionally, the primary mission of Navy tactical 
aviation has been to provide long-range striking power from a carrier, 
while Marine Corps tactical aviation provided air support for ground 
forces. Navy and Marine Corps tactical aviation squadrons will retain 
their primary mission responsibilities, but units that integrate would 
additionally be responsible to train as well as perform required 
mission responsibilities of the other service. For example, if a Navy 
squadron were assigned to the Marine Corps Unit Deployment Program, its 
pilots would receive more emphasis on training for close air support 
missions, and, similarly, Marine Corps pilots would place more emphasis 
on long-range strike missions before deploying with a carrier air wing. 
Moreover, Navy and Marine Corps officers would exchange Command 
positions to further develop a more unified culture. For instance, a 
Marine Corps colonel would command a carrier air wing, while a Navy 
captain would command a Marine Corps Aircraft Group.

Plan Expected to Reduce Total Number of Squadrons, Aircraft 
per Squadron, and Backup Aircraft:

As indicated in table 1, the Department of the Navy would create a 
smaller tactical aviation force structure consisting of fewer 
squadrons, reduced numbers of aircraft per squadron, and fewer backup 
aircraft. The number of tactical aviation squadrons would decrease from 
68 under the previous plan to 59 by 2012. To achieve this reduction of 
nine squadrons, the department would:

* cancel plans to reestablish four active Navy squadrons as anticipated 
under its prior procurement plan,

* decommission one Marine Corps Reserve squadron as well as one Navy 
Reserve squadron in 2004, and:

* decommission three active Navy squadrons. The first active squadron 
is scheduled to be decommissioned in fiscal year 2006; two other 
squadrons are to be decommissioned from fiscal year 2010 through fiscal 
year 2012.

Table 1: Force Structure Summary for the Previous Program and the Navy 
and Marine Corps' Integration Plan:

Service/Component: Navy-Active; 
Force structure under previous program: 40 squadrons/500 aircraft[A]; 
Force structure under integration plan: 33 squadrons/370 aircraft; 
Reductions in force structure: 7 squadrons/130 aircraft.

Service/Component: Navy-Reserves; 
Force structure under previous program: 3 squadrons/36 aircraft; 
Force structure under integration plan: 2 squadrons/22 aircraft; 
Reductions in force structure: 1 squadron/14 aircraft.

Service/Component: Marine Corps-Active; 
Force structure under previous program: 21 squadrons/308 aircraft; 
Force structure under integration plan: 21 squadrons/210 aircraft; 
Reductions in force structure: 0 squadrons/98 aircraft.

Service/Component: Marine Corps-Reserves; 
Force structure under previous program: 4 squadrons/48 aircraft; 
Force structure under integration plan: 3 squadrons/30 aircraft; 
Reductions in force structure: 1 squadron/18 aircraft.

Service/Component: Total operational aircraft; 
Force structure under previous program: 68 squadrons/892 aircraft; 
Force structure under integration plan: 59 squadrons/632 aircraft; 
Reductions in force structure: 9 squadrons/260 aircraft.

Service/Component: Backup aircraft; 
Force structure under previous program: 745; 
Force structure under integration plan: 508; 
Reductions in force structure: 237.

Total aircraft; 
Force structure under previous program: 1,637; 
Force structure under integration plan: 1,140; 
Reductions in force structure: 497. 

Sources: U.S. Navy (data); GAO (analysis).

[A] The Navy currently has 36 active squadrons instead of 40 as listed 
in the table. The difference in numbers is due to four Marine Corps 
squadrons that are currently integrated aboard Navy carriers. The 
Navy's previous plan was to buy enough aircraft to reestablish those 
four squadrons as Navy units.

[End of table]

Under the Plan, the number of aircraft assigned to some tactical 
aviation squadrons would be reduced. All Navy and Marine Corps F/A-18C 
squadrons that transition to the future Joint Strike Fighter aircraft 
would be reduced from 12 to 10 aircraft. In addition, Navy F/A-18F 
squadrons will be reduced from 14 to 12 aircraft. Furthermore, by 2006, 
aircraft assigned to the remaining two Navy and three Marine Corps 
Reserve squadrons would be reduced from 12 to 10. By reducing the 
aircraft assigned to squadrons, the size of Navy air wings will 
transition from 46 to 44 aircraft in 2004, as the Navy procures new 
aircraft. A notional air wing in the Navy's current force is made up of 
46 aircraft comprising a combination of F/A-18C and F-14 squadrons. 
However, by 2016, carrier air wings would contain 44 aircraft made up 
of two squadrons of 10 Joint Strike Fighters, one squadron of 12 F/A-
18E fighters, and one squadron of 12 F/A-18F fighters.

The Department of the Navy's Plan would also reduce the number of 
backup aircraft to be procured from 745 (under the previous program) to 
508, for a total reduction of 237 aircraft. Backup aircraft consist of 
those aircraft that are not primarily assigned to active or reserve 
squadrons. Specifically, backup aircraft are necessary to meet a 
variety of needs such as:

* training new pilots;

* replacing aircraft that are either awaiting or undergoing depot-level 
repair;

* meeting research, development, and test and evaluation needs;

* attrition during peacetime or wartime operations; and:

* meeting miscellaneous requirements, such as adversary training and 
the Blue Angels demonstration team.

Plan Expected to Reduce Procurement of Tactical Fighters and Save 
Procurement Costs:

In implementing the Plan, the Department of the Navy expects to reduce 
the number of tactical aviation aircraft it will purchase by 497--from 
1,637 to 1,140. As indicated in table 2, it plans to procure, 
respectively, 88 and 409 fewer F/A-18E/F and Joint Strike Fighter 
aircraft. Almost half (237, or 48 percent) of the expected reduction in 
aircraft procurement is attributable to the plan to have fewer backup 
aircraft. By reducing the total number of new tactical aviation 
aircraft to be procured, the Department of the Navy now expects that 
its new procurement program will cost about $64 billion, as compared 
with nearly $92 billion for the previously planned force, resulting in 
a savings of approximately $28 billion.

Table 2: Previous Program and the Navy and Marine Corps' Integration 
Plan Aircraft Procurement Summary:

Aircraft type: F/A-18E/F; 
Previous program procurement: 548; 
Integration plan procurement: 460; 
Reductions in aircraft procurement: 88.

Aircraft type: Joint Strike Fighter; 
Previous program procurement: 1,089; 
Integration plan procurement: 680; 
Reductions in aircraft procurement: 409.

Total; 
Previous program procurement: 1,637; 
Integration plan procurement: 1,140; 
Reductions in aircraft procurement: 497.

Sources: U.S. Navy (data); GAO (analysis).

[End of table]

Navy's Analysis Generally Appears Reasonable, but Some Limitations 
Could Understate Risks:

The Department of the Navy based its conclusion that it could meet its 
operational requirements with a smaller force primarily on the results 
of a contractor study. The contractor's analysis generally appeared 
reasonable because it assessed the relative capability of different 
tactical aviation force structures and included important assumptions 
about force structure, budget resources, and management efficiencies. 
However, from our review of the contractor's methodology and 
assumptions, we identified some limitations in its analysis that may 
understate the risk associated with implementing some aspects of the 
Plan. These limitations include (1) the contractor's decision to model 
only the carrier version of the Joint Strike Fighter despite the Marine 
Corps' plans to operate Short Take Off and Vertical Landing aircraft on 
carriers, (2) the contractor's limited studies supporting recommended 
reductions in backup aircraft, and (3) the contractor's method for 
determining aircraft capabilities used in the force analyses.

Methodology Compared Relative Force Structure Capabilities:

The contractor modeled the effectiveness of the current force, the 
larger force that the Navy had previously planned to buy, and the 
study's recommended smaller force at three stages of a notional 
warfight. The warfight was based on a generic composite scenario that 
was developed with input from the Air Force and Army. It has been 
previously used by the Joint Strike Fighter Program Office to assess 
the effectiveness of a joint strike force in terms of phases of a 
warfight; geographical location of combat forces; the characteristics 
of targets, such as type and hardness; and whether targets are mobile. 
During the forward presence phase of the contractor's modeling 
scenario, one carrier battle group and one amphibious readiness group 
were deployed, and aircraft operated at a maximum distance of 400 
nautical miles from the carrier. In the buildup phase, three carrier 
battle groups and three amphibious groups were deployed in one theater, 
and aircraft operated at a maximum distance of 150 nautical miles. 
During the mature phase, eight carrier battle groups, eight amphibious 
readiness groups, and 75 percent of all other assets were deployed to 
land-based sites, and aircraft operated at a maximum distance of 150 
nautical miles from the carrier.

To measure combat effectiveness levels, the contractor methodically 
compared the estimated capabilities of the current force, the 
previously planned force, and the recommended force to hit targets and 
perform close air support. To determine the relative capabilities of 
each aircraft comprising these forces, the contractor convened a panel 
of experts who were familiar with planned capability and used official 
aircraft performance data to score the offensive and defensive 
capabilities of different aircraft across a range of missions performed 
during the three stages of the warfight. As indicated in figure 2, the 
experts determined that the Joint Strike Fighter, which is still in 
development, will be the most capable aircraft and assigned it a 
baseline score of 1 compared with the other aircraft.

Figure 2: Capability Scores Determined by Contractor's Panel 
of Experts:

[See PDF for image]

[End of figure]

Figure 2 also shows that based on the capability scores assigned other 
aircraft, the Joint Strike Fighter is expected to be approximately nine 
times more capable than the AV-8B Harrier aircraft, about five times 
more capable than the F-14D and F/A-18 A+/C/D aircraft, three times 
more capable than the first version of the F/A-18 E/F aircraft, and 
50 percent more capable than the second version of the F/A-18E/F. In 
addition, the contractor measured the percentage of units deployed in 
order to ensure that Navy and Marine Corps personnel tempo and 
operational tempo[Footnote 5] guidelines for peacetime were not 
exceeded.

The study concluded that, because of the expected increase in the 
capabilities of F/A-18 E/F and the Joint Strike Fighter aircraft, both 
the previously planned force and the recommended new smaller force were 
more effective than today's force. Furthermore, the new smaller force 
was just as effective in most instances as the previously planned force 
because the smaller force had enough aircraft to fully populate 
aircraft carrier flight decks and therefore did not cause a reduction 
in the number of targets that could be hit. However, the analysis 
showed that beginning in 2015, there would be a 10 percent reduction in 
effectiveness in close air support during the mature phase of a 
warfight because fewer squadrons and aircraft would be available to 
deploy to land bases. The analysis also showed that the smaller force 
stayed within personnel and operational tempo guidelines during 
peacetime.

Analysis Included Reasonable Assumptions:

The contractor's analysis was based on three key assumptions that 
generally appeared to be reasonable and consistent with DOD plans. 
First, it assumed that the future naval force structure would include 
12 carrier battle groups, supported by 1 reserve and 10 active carrier 
air wings, and 12 amphibious readiness groups. The 2001 Quadrennial 
Defense Review validated this naval force structure and judged that 
this force structure presented moderate operational risk in 
implementing the defense strategy. Second, it assumed that the Navy and 
Marine Corps' tactical aviation procurement budget would continue to be 
about $3.2 billion in fiscal year 2002 dollars annually through 2020. 
This was based on the Department of the Navy's determination that the 
tactical aviation procurement budget would continue to represent about 
50 percent of the services' total aircraft procurement budget as it had 
in fiscal years 1995 to 2002. Third, it assumed that the Department of 
the Navy could reduce the number of backup aircraft it buys based on 
expected efficiencies in managing its backup aircraft inventory.

Some Limitations in the Navy's Analysis Understate Risks in 
Implementing the Plan:

Our analysis also showed, however, that certain limitations derived 
from the contractor's study could add risk to the expected 
effectiveness of the future smaller force. These limitations are:

* the study's modeling assumption that the effectiveness of the Marine 
Corps' Short Takeoff and Vertical Landing version of the Joint Strike 
Fighter would be the same as the Navy's carrier version despite 
projected differences in their capability;

* the study's assumption that certain efficiencies in the management of 
backup aircraft could be realized, without documenting and providing 
supporting analyses substantiating how they would be achieved; and:

* the study's process for assigning capability measures to aircraft 
which, because of its subjectivity, could result in an overestimation 
of the smaller force's effectiveness.

Projected Capability Differences of Joint Strike Fighter Versions Could 
Affect Expected Effectiveness of Smaller Tactical Aviation Force:

The contractor's study assumed that all Joint Strike Fighters aboard 
Navy carriers, including those belonging to the Marine Corps, would 
have the performance characteristics of the carrier version of that 
aircraft. However, the Marine Corps plans to operate only the Short 
Takeoff and Vertical Landing version of the aircraft, which is 
projected to be significantly less capable than the carrier version in 
terms of range and payload (number of weapons it can carry). The Marine 
Corps believes this version is needed to satisfy its requirement to 
operate from austere land bases or amphibious ships in order to quickly 
support ground forces when needed. But the carrier version's unrefueled 
range and internal payload are expected to exceed those of the Short 
Takeoff and Vertical Landing version by approximately 50 and 
100 percent, respectively.

The contractor mitigated the differences in the two versions' 
capabilities by modeling a scenario whereby the aircraft would operate 
from carriers located 150 miles from the targets during the mature 
phase of the warfight--well within the range of the Marine Corps' 
version. By contrast, during Operation Iraqi Freedom, many of the 
targets struck from carriers would have been outside the range of the 
Short Takeoff and Vertical Landing version of the aircraft unless in-
flight refueling was performed, thereby reducing its effectiveness. The 
study noted that because of the differences in performance, 
substitution of the Short Takeoff and Vertical Landing version for the 
carrier version would result in decreased effectiveness when the Short 
Takeoff and Vertical Landing version's performance parameters are 
exceeded. However, the study did not conduct additional analyses to 
quantify the impact of using Short Takeoff and Vertical Landing 
aircraft aboard carriers. Therefore, if the Plan is implemented whereby 
the Marine Corps operates the Short Takeoff and Vertical Landing 
version of the aircraft exclusively as one of four tactical aviation 
squadrons aboard each carrier, under a different scenario featuring a 
greater range to targets, the overall effectiveness of the tactical 
fighter group could be less than what the contractor's study predicted. 
Navy officials acknowledged that operating the Short Takeoff and 
Vertical Landing Joint Strike Fighter aircraft from carriers presents a 
number of challenges that the Navy expects to address as the aircraft 
progresses through development.

Projected Efficiencies in Managing Backup Aircraft Were Based on 
Limited Analysis:

The contractor's study recommended cutting 351 backup aircraft based on 
expected improvements and efficiencies in the Navy's management of such 
aircraft. The study identified three main factors prompting its 
conclusion that fewer backup aircraft would be needed.

* Actual historical attrition rates for F/A-18 aircraft, according to 
the Navy, suggest that the attrition rate for the F/A-18E/F and Joint 
Strike Fighter could be lower than expected. The Navy determined that 
attrition might be only 1 percent of total aircraft inventory, rather 
than the expected 1.5 and 1.3 percent included in the Navy's original 
procurement plan for the aircraft respectively[Footnote 6]; thus, fewer 
attrition aircraft would suffice.

* Business practices for managing aircraft in the maintenance pipeline 
could be improved. According to the contractor, if Navy depots 
performed as much maintenance per day as Air Force depots, it appears 
that the Navy could reduce the number of aircraft in the maintenance 
pipeline; thus, fewer aircraft could suffice.

* Testing, evaluating, and aircrew training could become more 
efficient. According to the contractor's study, fewer aircraft would be 
needed to test and evaluate future technology improvements because of 
the Navy and Marine Corps' two Joint Strike Fighter variants (the 
carrier and Short Takeoff and Vertical Landing versions would have many 
common parts). In addition, advances in trainer technology and the 
greater sortie generation capability of the newer aircraft could enable 
them to achieve more training objectives in a single flight; thus, 
fewer aircraft could suffice.

Although the contractor recognized the potential of these efficiencies 
when recommending the reduction to the number of backup aircraft, it 
did not fully analyze the likelihood of achieving them. According to 
the contractor, it recommended the reduction based on limited analysis 
of the potential to reduce the number of attrition and maintenance 
pipeline aircraft. As a result, the contractor also recommended that 
the Department of the Navy study whether it could achieve expected 
maintenance efficiencies by improving its depot operations. However, 
the department has not conducted such an assessment.

The Department of the Navy considered the risk of cutting 351 aircraft 
too high and instead decided to cut only 237 backup aircraft--the 
number reflected in the Navy's plan. Historically, the Navy's backup 
inventory has equaled approximately 95 percent of the number of combat 
aircraft. The contractor recommended that the Navy reduce its backup 
aircraft requirement to 62 percent of its planned inventory of combat 
aircraft. Concerned that this might be too drastic a cut, the Navy 
decided to use 80 percent when determining the number of backup 
aircraft in its Plan. Although the Plan's higher ratio of backup 
aircraft to combat aircraft will reduce operational risk by having more 
aircraft available for attrition and other purposes, the Navy's 
80 percent factor was not based on a documented analysis. Navy 
officials noted that because of budget limitations, it would be 
difficult to purchase additional aircraft to support the smaller 
tactical aviation force in case some of the projected efficiencies are 
not realized.

Subjectivity in Aircraft Capabilities Scoring Could Reduce Expected 
Force Effectiveness:

The contractor relied on aircraft capability scores assigned by a panel 
of experts as a basis for comparing the relative effectiveness of the 
aircraft and alternative force structures examined. The results showed 
that by 2020, the previously planned and new smaller force would be 
four times more effective at hitting targets than the current force. 
However, the panelists subjectively determined the capability scores 
from official aircraft performance parameters provided by the Navy. The 
contractor reportedly conducted a "sensitivity analysis" of the 
aircraft capability scores and found that changing the scores affected 
the forces' relative effectiveness. Since the contractor did not retain 
documentation of the analysis, we could not verify the quality of the 
scoring, nor attest that the relative effectiveness of the new force 
will be four times greater than the current force as the study 
reported. Nevertheless, the contractor's acknowledgement that score 
variations could affect relative force effectiveness raises the 
possibility that the estimated increases in effectiveness, both for the 
previously planned force and for the recommended smaller force, might 
not be as high as the study concluded. Navy and Marine Corps officials 
agreed that gaining a significant increase in total capability was key 
to accepting a smaller, more capable tactical aviation force. However, 
if the capability of the recommended smaller force is significantly 
less than that indicated by the study, the smaller force's ability to 
meet both Navy and Marine Corps' mission requirements could be 
adversely affected.

In the Absence of DOD Criteria, the Marine Corps and Navy Used 
Different Methods and Documentation Standards to Determine Which 
Reserve Units to Decommission:

The Navy and Marine Corps took significantly different approaches 
toward the task of assessing and documenting their decisions on which 
reserve units to decommission. The Marine Corps used a well-documented 
process that clearly showed what criteria were applied to arrive at its 
decision, whereas the Navy's approach lacked clarity and supporting 
documentation about how different options were evaluated. DOD has not 
developed criteria to guide such decommissioning decisions. In a 
previous report, we reviewed the Air Force's decision to reduce and 
consolidate the B-1B bomber fleet and found that Air Force officials 
did not complete a formal comprehensive analysis of potential basing 
options in order to determine whether they were choosing the most cost-
effective units to keep.[Footnote 7] We also stated that in the absence 
of standard guidance for analyzing basing alternatives, similar 
problems could occur in the future. In this instance, the absence of 
standard DOD guidance for analyzing and documenting decommissioning 
alternatives allowed the Navy to use a very informal and less 
transparent process to determine which reserve squadron to decommission 
in fiscal year 2004. The lack of a formal process could also hinder 
transparency in making such decisions in the future, which adversely 
affects Congress's ability to provide appropriate oversight.

The Marine Corps Conducted a Comprehensive Analysis to Support 
Decommissioning Decision:

The Marine Corps established a team that conducted and documented a 
comprehensive review to support its decision about which Marine Corps 
Reserve squadron to decommission.[Footnote 8] In conducting its 
analysis, the Marine Corps assumed that (1) reserve assets that had not 
been decommissioned must be optimized for integration in future combat 
roles, (2) mission readiness and productivity are crucial, and (3) the 
political and legal ramifications of deactivating reserve units must be 
considered. The study team established a set of criteria consisting of 
personnel, operational, fiscal, logistical, and strategic factors and 
applied these criteria when evaluating each of the Marine Corps' four 
reserve squadrons. Table 3 identifies the selection criteria applied to 
each squadron.

Table 3: Marine Corps Criteria for Selecting a Reserve Unit 
to Decommission:

Personnel: Detailed demographics analysis was conducted to determine 
the number and status of personnel for each location. The implications 
of relocating and retraining squadron personnel were examined.

Operational: Unit, pilot, and aircraft readiness, productivity, and 
efficiency were assessed. Sortie[A] analysis was conducted, and 
aircraft utilization rates were examined. Support provided for training 
exercises and other events was analyzed.

Fiscal: Operational and training costs were examined. Cost per flight 
hour, cost to support combined arms training at Marine Corps Air/Ground 
Task Force Training Center Twenty-nine Palms, Calif., and operations/
maintenance and personnel costs were assessed.

Logistical: Basing impacts and divestiture expenses were examined. 
Suitability of facilities (billeting, work areas, messing, etc.) and 
operations, training, and maintenance supportability were assessed.

Strategic: Doctrinal, organizational, and regional issues were 
examined.

Source: U.S. Marine Corps.

[A] A single mission or flight of an aircraft.

[End of table]

The study results were presented to the Marine Requirements Oversight 
Council for review and recommendation and to the Commandant of the 
Marine Corps.[Footnote 9] The Commandant decided in May 2004 to 
decommission reserve squadron VMFA-321 located at Andrews Air Force 
Base, Maryland, by September 2004.

The Navy Did Not Conduct a Formal Analysis or Provide Documentation 
to Support Its Decommissioning Decision:

In December 2003, the Navy decided to decommission one of three Navy 
Reserve tactical aviation squadrons, VFA-203, located in Atlanta, 
Georgia. The Chief of Naval Reserve stated that the Navy used a variety 
of criteria in deciding which unit to decommission. These criteria 
included the squadrons' deployment history, the location of squadrons 
in relation to operating ranges, and the location of a reserve 
intermediate maintenance facility. Navy officials, however, could not 
provide documentation of the criteria or the analysis used to support 
its decision. Without such documentation to provide transparency to the 
Navy's process, we could not determine whether these criteria were 
systematically applied to each reserve squadron. Furthermore, we could 
not assess whether the Navy had systematically evaluated and compared 
other factors such as operational, personnel, and financial impacts for 
all Navy Reserve squadrons.

Two Other Factors Could Affect the Plan's Implementation and Add Risk:

Two other factors could adversely affect the successful implementation 
of the Plan and increase the risk level assumed at the time the 
contractor completed the study and the Navy and Marine Corps accepted 
the Plan. These factors are (1) uncertainty about requirements for 
readiness funding to support the tactical aviation force and 
(2) projected delays in fielding the Joint Strike Fighter aircraft that 
might cause the Department of the Navy not to implement the Plan as 
early as expected and might increase operations and maintenance costs. 
If these factors are not appropriately addressed, the Department of the 
Navy may not have sufficient funding to support the readiness levels 
required for the smaller force to meet the Navy and Marine Corps' 
missions, and the transition to the Plan's force might be more costly 
than anticipated.

The contractor's study stated that because the Navy and the Marine 
Corps would have a combined smaller tactical aviation force under the 
Plan, the services' readiness accounts must be fully funded to ensure 
that the aircraft readiness levels are adequate to meet the mission 
needs of both services. Furthermore, the contractor recommended that 
the Navy conduct an analysis to determine the future readiness funding 
requirements and ensure that the Navy has a mechanism in place to fully 
fund the readiness accounts. So far, the Navy has not conducted this 
analysis, nor has it addressed how it will ensure that the readiness 
accounts will be fully funded because Navy officials noted that they 
consider future budget estimates to be adequate. However, a recent 
Congressional Research Service evaluation of the Plan noted that 
operations and maintenance costs have been growing in recent years for 
old aircraft and that new aircraft have sometimes, if not often, proved 
more expensive to maintain than planned.[Footnote 10] Furthermore, our 
analysis of budget data for fiscal years 2001-3 indicates that the 
Department of the Navy's operations and maintenance costs averaged 
about $388 million more than what was requested for tactical aviation 
and other flight operations. Without a review of future readiness 
funding requirements, the Navy cannot be certain that sufficient 
funding will be available to maintain the readiness levels that will 
enable the smaller tactical aviation force to meet the mission needs of 
both the Navy and the Marine Corps.

Delays in fielding the Joint Strike Fighter aircraft, both known and 
potential, could also affect the successful implementation of the Plan. 
As a result of engineering and weight problems in the development of 
the Joint Strike Fighter, there will be at least a 1-year delay in when 
the Navy and Marine Corps had expected to begin receiving the Joint 
Strike Fighter aircraft. As noted in the Department of the Navy's most 
recent acquisition reports to Congress, the Navy has delayed the Short 
Takeoff and Vertical Landing version from 2010 to 2012 and the Navy's 
carrier version from 2012 to 2013. Furthermore, in March 2004 we 
reported that numerous program risks and possible schedule variances 
could cause additional delays.[Footnote 11]

Recent Joint Strike Fighter program cost increases could also delay the 
fielding of the aircraft. In DOD's December 31, 2003, procurement plan, 
the average unit cost of the aircraft increased from $69 million to 
$82 million. Assuming that the Department of the Navy procures the 680 
Joint Strike Fighter aircraft as proposed under the Plan, the total 
procurement cost will be approximately $9 billion higher. This increase 
in cost, when considered within the limits of the expected $3.2 billion 
annual procurement budget, will likely prevent the Department of the 
Navy from fielding the smaller but more effective tactical aviation 
force as early as expected. Additionally, these delays will oblige the 
Department of the Navy to operate legacy aircraft longer than expected, 
which could result in increased operations and maintenance costs. A 
potential increase in operations and maintenance costs makes it even 
more important for the Department of the Navy to conduct an analysis to 
determine its future readiness funding requirements.

Conclusions:

The contractor's study results provided the Department of the Navy with 
a reasonable basis for concluding that it could afford to buy a smaller 
but more capable force that would meet its future operating 
requirements by using fewer Navy and Marine Corps tactical aviation 
squadrons of more capable aircraft as a combined force and achieving 
efficiencies that allow it to reduce the number of backup aircraft 
needed. However, there are known management and funding risks to 
realizing the new smaller forces' affordability and effectiveness. 
Until Navy management assesses the likelihood of future lower attrition 
rates and aircraft maintenance, test and evaluation, and training 
requirements, the Navy runs the risk that the number of backup aircraft 
it plans to procure will not be adequate to support the smaller 
tactical aviation force and add concern to the Plan's affordability. 
Furthermore, in the absence of clear DOD guidance citing consistent 
criteria and documentation requirements for supporting decisions that 
affect units, such as which Navy and Marine Corps Reserve squadrons to 
decommission, we remain concerned about the transparency of the process 
for reducing the force to those with oversight responsibility. The 
inconsistency in the Marine Corps' and Navy's approaches and supporting 
documentation confirms the value of such guidance to ensure clear 
consideration of the best alternative. Finally, until the Department of 
the Navy knows the readiness funding requirements for operating the new 
smaller force, it cannot be certain that it can maintain the readiness 
levels required to meet operational demands. Such an assessment of 
these requirements would provide a sound basis for seeking proper 
funding.

Recommendations for Executive Action:

To enhance the potential that the future Navy and Marine Corps 
integrated tactical aviation force will meet the mission needs of both 
services and ensure more transparency when making future 
decommissioning decisions, we recommend that the Secretary of Defense 
take the following three actions:

* direct the Secretary of the Navy to thoroughly assess all of the 
factors that provide the basis for the number of backup aircraft needed 
to support a smaller tactical aviation force under the plan to 
integrate Navy and Marine Corps tactical aviation forces,

* develop guidance that (1) identifies the criteria and methodology for 
analyzing future decisions about which units to decommission and 
(2) establishes requirements for documenting the process used and 
analysis conducted, and:

* direct the Secretary of the Navy to analyze future readiness funding 
requirements to support the tactical aviation integration plan and 
include required funding in future budget requests.

Agency Comments and Our Evaluation:

In written comments on a draft of this report, the Director, Defense 
Systems, Office of the Under Secretary of Defense, stated that the 
department generally agreed with our recommendations and cited actions 
that it is taking. The department's comments are reprinted in their 
entirety in appendix I.

In partially concurring with our first recommendation to thoroughly 
assess all of the factors that provide the basis for the number of 
backup aircraft, DOD stated that the Department of the Navy's Naval Air 
Systems Command would complete an effort to review all aircraft 
inventories to determine the optimum quantity required by July 2004. 
However, we were not able to evaluate the Navy's study because Navy 
officials have since told us that it will not be completed until late 
September or early October 2004.

With regard to our second recommendation to develop guidance that would 
identify criteria and a methodology for analyzing future 
decommissioning decisions and require documenting the process, DOD 
stated that it would change Directive 5410.10, which covers the 
notification of inactivation or decommission of forces, and require it 
to contain the criteria and methodology used to make the force 
structure decision. While we agree that the new guidance, if followed, 
would disclose these aspects of the decision-making process, it does 
not appear sufficient to meet the need we identified for consistency 
and documentation to support force structure decisions. Therefore, we 
believe that DOD should take additional steps to meet the intent of our 
recommendation by developing consistent criteria and requiring 
documentation to ensure transparency for those providing oversight of 
such decisions in the future.

In partially concurring with our third recommendation related to future 
readiness funding requirements, the Department of Defense stated that 
the Department of the Navy is currently developing analytical metrics 
that would provide a better understanding of how to fund readiness 
accounts to achieve a target readiness level. We support the 
development of validated metrics that would link the amount of funding 
to readiness levels because they would provide decision makers with 
assurance that sufficient funding would be provided.

Scope and Methodology:

To determine how Navy and Marine Corps operational concepts, force 
structure, and procurement costs would change under the Plan, we 
obtained information about the Navy and Marine Corps' current roles and 
mission, force structure, and projected tactical aviation procurement 
programs and conducted a comparative analysis. We also met with Navy 
and Marine Corps officials at the headquarters and major command levels 
as well as Congressional Research Service officials to further 
understand and document the operational, force structure, and 
procurement cost changes expected if the Plan is implemented.

To determine what methodology and assumptions the Navy and Marine Corps 
used to analyze the potential for integrating tactical aviation assets 
and any limitations that could affect the services' analysis, we 
analyzed numerous aspects of the contractor's study that provided the 
impetus for the Plan. Specifically, we met with the contractor 
officials of Whitney, Bradley & Brown, Inc., to gain first-hand 
knowledge of the model used to assess aircraft performance capability 
and the overall reasonableness of the study's methodology. We also 
reviewed the scenario and assessed the key analytical assumptions used 
in order to evaluate their possible impact on the implementation of the 
Plan. We examined operational and aircraft performance factors to 
determine the potential limitations that could affect the services' 
analysis. Additionally, we held discussions with officials at Navy and 
Marine Corps headquarters, Joint Forces Command, Naval Air Forces 
Pacific and Atlantic Commands, Marine Forces Atlantic Command, and the 
Air Combat Command to validate and clarify how the Plan would or would 
not affect the ability of tactical aviation forces to meet mission 
needs.

To determine the process the Navy and Marine Corps used to assess which 
reserve squadrons should be decommissioned in fiscal year 2004, we 
obtained information from the Marine Corps Reserve Headquarters and the 
4TH Marine Air Wing showing a comparative analysis of Marine Corps 
Reserve squadrons. In the absence of comparable information from the 
Navy, we held discussions with the Chief of Naval Reserve and the 
Director, Navy Air Warfare, and visited the Naval Air Force Reserve 
Command to obtain information about the decision-making process for 
selecting the Navy reserve unit to be decommissioned. We also visited 
the Commander of the Navy Reserve Carrier Air Wing-20, along with four 
reserve squadrons, two each from the Navy and Marine Corps Reserves, to 
clarify and better understand their roles, missions, and overall value 
to the total force concept.

To determine what other factors might affect the implementation of the 
Plan, we analyzed the contractor's study, Congressional Research 
Service reports, and prior GAO reports for potential effects that were 
not considered in the final results of the analysis. We discussed these 
factors with officials from Navy and Marine Corps headquarters as well 
as Naval Air Forces Pacific and Atlantic Commands and Marine Forces 
Atlantic Command to assess the impact of the Plan on day-to-day 
operations.

We assessed the reliability of pertinent data about aircraft 
capability, force structure, and military operations contained in the 
contractor's study that supports the Plan by (1) reviewing with 
contractor officials the methodology used for the analysis; 
(2) reviewing the 2001 Quadrennial Defense Review, prior GAO reports, 
and service procurement and aircraft performance documents; and 
(3) conducting discussions with Navy and Marine Corps officials. We 
concluded that the data were sufficiently reliable for the purpose of 
this report.

We performed our review from July 2003 through May 2004 in accordance 
with generally accepted government auditing standards.

We are sending copies of this report to the Secretary of Defense; the 
Secretary of the Navy; the Commandant of the Marine Corps; the 
Director, Office of Management and Budget; and other interested 
congressional committees and parties. We will also 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.

Please contact me on (202) 512-4402 if you or your staff have any 
questions concerning this report. Major contributors to this report are 
included in appendix I.

Signed by: 

Janet St. Laurent, Director: 
Defense Capabilities and Management:

List of Committees:

The Honorable Ted Stevens: 
Chairman: 
The Honorable Robert C. Byrd: 
Ranking Minority Member: 
Committee on Appropriations: 
United States Senate:

The Honorable C. W. Bill Young: 
Chairman: 
The Honorable David R. Obey: 
Ranking Minority Member: 
Committee on Appropriations: 
House of Representatives:

The Honorable John W. Warner: 
Chairman: 
The Honorable Carl Levin: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate:

The Honorable Duncan Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives:

[End of section]

Appendix I: Comments from the Department of Defense:

Note: Page numbers in the draft report may differ from those in this 
report.

OFFICE OF THE UNDER SECRETARY OF DEFENSE:

3000 DEFENSE PENTAGON: 
WASHINGTON, DC 20301-3000:
ACQUISITION TECHNOLOGY AND LOGISTICS:

JUL 28 2004:

Ms. Janet St. Laurent:
Director, Defense Capabilities and Management: 
U.S. General Accounting Office:
Washington, D.C. 20548:

Dear Ms. St. Laurent:

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-04-900, "FORCE STRUCTURE: Department of the Navy's Tactical 
Aviation Integration Plan Is Reasonable, But Some Factors Could Affect 
Implementation," dated June 25, 2004 (GAO Code 350414):

The DoD reviewed the draft report and generally concurs with the 
report's recommendations. The rationale for the DoD's position is 
provided at enclosure 1.

The Department appreciates the opportunity to comment on the draft 
report.

Sincerely, 

Signed by: 

Glenn F. Lamartin: 
Director: 
Defense Systems:

Enclosure: As stated:

GAO DRAFT REPORT - DATED JUNE 25, 2004 GAO CODE 350414/GAO-04-900:

"FORCE STRUCTURE: Department of the Navy's Tactical Aviation 
Integration Plan Is Reasonable, But Some Factors Could Affect 
Implementation":

DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
direct the Secretary of the Navy to thoroughly assess all of the 
factors that provide the basis for the number of backup aircraft needed 
to support a smaller tactical aviation force under the plan to 
integrate Navy and Marine Corps tactical aviation forces.

(Page 20/GAO Draft Report):

DOD RESPONSE: The Department partially concurs with this 
recommendation. The DoN is currently reviewing all aircraft inventories 
to determine the optimum quantity required for each type of aircraft. 
Naval Air Systems Command is leading this effort in conducting 
productive ratio (inventory optimization) reviews for all aircraft by 
July 2004.

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense 
develop guidance that: (1) identifies the criteria and methodology for 
analyzing future decisions about which units to decommission and (2) 
establishes requirements for documenting the process used and analysis 
conducted. (Page 20/GAO Draft Report):

DOD RESPONSE: The Department partially concurs with this 
recommendation. DoD Directive 5410.10 currently provides for a DoD 
notification of any significant inactivation or decommissioning. We 
agree that this can be implemented through paragraph 3.2.2 of this 
directive modified to read:  

3.2.2. The written request will contain all pertinent information 
concerning the matter, including the reason for the action; the 
criteria and methodology used in making this force structure decision, 
the number of personnel affected by the action; the total number of 
employees, when appropriate; dollar amounts involved; the estimated 
effect on the local economy, and anticipated Congressional interest, 
including the names of members who will be notified. A draft of any 
proposed press announcement should accompany this request, or a 
statement will be included that no press announcement is contemplated.

The Department will make the appropriate change.

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense 
direct the Secretary of the Navy to analyze future readiness funding 
requirements to support the tactical aviation integration plan and 
include required funding in future budget requests. (Page 20/GAO Draft 
Report):

DOD RESPONSE: The Department partially concurs with this 
recommendation. The DoN is currently developing analytical metrics that 
they expect will provide them a better understanding of how to fund 
readiness accounts to achieve a target readiness level. These metrics 
and modeling techniques are being applied to the flight hour, 
maintenance and training accounts to better support fleet readiness. 
The DoN has implemented the Fleet Response Plan (FRP) with a goal to 
have six carriers deployed within thirty days and two more by ninety 
days. Execution of this plan in FY06 is envisioned to have these 
carriers' target readiness levels of C1.7 (very good) to C3.0 (good). 
The Department supports this effort, and will wait to see how the 
results of the current execution compare to past readiness before 
considering any additional actions. 

[End of section]

Appendix II: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Richard G. Payne (757) 552-8119 George O. Morse (757) 552-8108:

Acknowledgments:

In addition to those named above, Willie J. Cheely, Jr; Kelly 
Baumgartner; W. William Russell, IV; Michael T. Dice; Cheryl A. 
Weissman; Katherine S. Lenane; and Monica L. Wolford also made 
significant contributions to this report.

FOOTNOTES

[1] Hereinafter referred to as the Plan.

[2] Pub. L. No. 108-87, §8141 (2003).

[3] S. Rep. No. 108-46, at 123 (2003).

[4] Marine Corps Unit Deployment program maintains three tactical 
aviation squadrons at Iwakuni Marine Corps Air Station, Japan, to meet 
contingency operations throughout the Western Pacific Theater. 

[5] Personnel tempo measures the frequency of deployments and time away 
from home. Operational tempo measures the intensity of actions for 
military units by tracking the number of days per quarter that the unit 
is deployed.

[6] We did not assess the reliability of the Navy's data generating the 
attrition rates for the F/A-18 aircraft.

[7] U.S. General Accounting Office, Force Structure: Review of B-1 
Process Identifies Opportunity to Improve Future Analysis, GAO-02-846 
(Washington, D.C.: Sept. 6, 2002).

[8] The study team submitted the report to the Commander, 4th Marine 
(Reserve) Air Wing, on December 7, 2002.

[9] The Marine Requirements Oversight Council advises the Commandant of 
the Marine Corps on policy matters related to concepts, force 
structure, and requirements validation.

[10] Congressional Research Service, Navy-Marine Corps Tactical Air 
Integration Plan: Background and Issues for Congress (Washington, D.C., 
Sept. 2003).

[11] U.S. General Accounting Office, Defense Acquisitions: Assessments 
of Major Weapon Programs. GAO-04-248 (Washington, D.C.: Mar. 31, 2004).

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