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Testimony:

Before the Subcommittee on Readiness, Committee on Armed Services, 
House of Representatives:

United States General Accounting Office:

GAO:

For Release on Delivery Expected at 2 p.m. EST:

Wednesday, March 24, 2004:

Military Prepositioning:

Observations on Army and Marine Corps Programs During Operation Iraqi 
Freedom and Beyond:

Statement of William M. Solis, Director, Defense Management and 
Capabilities:

GAO-04-562T:

GAO Highlights:

Highlights of GAO-04-562T, a testimony before the Subcommittee on 
Readiness, Committee on Armed Services, House of Representatives 

Why GAO Did This Study:

Since the Cold War, the Department of Defense (DOD) has increased its 
reliance on prepositioned stocks of military equipment and supplies, 
primarily because it can no longer plan on having a large forward troop 
presence. Prepositioned stocks are stored on ships and on land in the 
Persian Gulf and other regions around the world. Prepositioning allows 
the military to respond rapidly to conflicts. Ideally, units need only 
to bring troops and a small amount of materiel to the conflict area. 
Once there, troops can draw on prepositioned equipment and supplies, 
and then move quickly into combat. 

Today’s testimony describes (1) the performance and availability of 
Army and Marine Corps prepositioned equipment and supplies to support 
Operation Iraqi Freedom (OIF); (2) current status of the stocks and 
plans to reconstitute them; and (3) key issues facing the military as 
it reshapes these programs to support DOD's force transformation 
efforts.

GAO’s observations are based on ongoing work as well as previous 
reports on equipment accountability, supply distribution, and other 
logistics issues during OIF, plus other past work on spare parts 
shortages and on the readiness of prepositioning programs.

What GAO Found:

The importance of prepositioned stocks was dramatically illustrated 
during OIF. While they faced some challenges, the Army and Marine Corps 
relied heavily on prepositioned combat equipment and supplies to 
decisively defeat the Iraqi military. They both reported that 
prepositioned stocks were a key factor in the success of OIF. 
Prepositioned stocks provided most of the combat equipment used and, 
for the most part, this equipment was in good condition and maintained 
high readiness rates. However, the Army's prepositioned equipment 
included some older models of equipment and shortfalls in support 
equipment such as trucks, spare parts, and other supplies. Moreover, 
the warfighter did not always know what prepositioned stocks were 
available in theater, apparently worsening an already overwhelmed 
supply-and-distribution system. The units were able to overcome these 
challenges; fortunately, the long time available to build up forces 
allowed units to fill many of the shortages and adjust to unfamiliar 
equipment. 

Much of the prepositioned equipment is still being used to support 
continuing operations in Iraq. It will be several years—depending on 
how long Iraqi Freedom operations continue—before these stocks will be 
available to return to prepositioning programs. And, even after they 
become available, much of the equipment will likely require substantial 
maintenance, or may be worn out beyond repair. The Army has estimated 
that it has an unfunded requirement of over $1 billion for 
reconstituting the prepositioned equipment used in OIF. However, since 
most prepositioned equipment is still in Southwest Asia and has not 
been turned back to the Army Materiel Command for reconstitution, most 
of the funding is not required at this time. When the prepositioned 
equipment is no longer needed in theater, decisions will have to be 
made about what equipment can be repaired by combat units, what 
equipment must go to depot, and what equipment must be replaced with 
existing or new equipment to enable the Army to reconstitute the 
prepositioned sets that were downloaded for OIF. 

DOD faces many issues as it rebuilds its prepositioning program and 
makes plans for how such stocks fit into its future. In the near term, 
the Army and Marines must necessarily focus on supporting ongoing OIF 
operations. While waiting to reconstitute its program, the Army also 
has an opportunity to address shortfalls and modernize remaining 
stocks. For the longer term, DOD may need to (1) determine the role of 
prepositioning in light of efforts to transform the military; (2) 
establish sound prepositioning requirements that support joint 
expeditionary forces; and (3) ensure that the program is resourced 
commensurate with its priority and is affordable even as the force is 
transformed. Congress will play a key role in reviewing DOD’s 
assessment of the cost effectiveness of various options to support its 
overall mission, including prepositioning and other alternatives for 
projecting forces quickly.

www.gao.gov/cgi-bin/getrpt?GAO-04-562T.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact William M. Solis at 
(202) 512-8365 or solisw@gao.gov.

[End of section]

Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to discuss our work on logistical issues 
related to Operation Iraqi Freedom (OIF), focusing on prepositioned 
stocks. Since the end of the Cold War, the Department of Defense (DOD) 
has increased its reliance on prepositioned reserves of military 
equipment and supplies since it can no longer plan on having a large 
forward troop presence. Prepositioned stocks are stored on ships and on 
land in the Persian Gulf and other regions around the world. 
Prepositioning can speed response times. Ideally, the military needs 
only to bring troops and a small amount of materiel to the area of 
conflict. Once there, troops can draw on prepositioned equipment and 
supplies, and then move rapidly into combat.

My statement today reflects our preliminary observations drawn from 
ongoing work as well as previously published reports. As requested, my 
testimony today will focus on the performance, reconstitution, and 
future of prepositioning programs. Specifically, it describes (1) the 
performance and availability of Army and Marine Corps prepositioned 
equipment and supplies to support OIF; (2) the current status of the 
stocks and plans to reconstitute them; and (3) key issues facing the 
military as it reshapes these programs to support the military's force 
transformation efforts.

Summary:

The importance of prepositioned stocks was dramatically illustrated 
during OIF. While they faced some challenges, the Army and Marine Corps 
relied heavily on prepositioned combat equipment and supplies to 
decisively defeat the Iraqi military. The following summarizes our 
preliminary observations and issues to consider for the future.

* Army and Marine Corps officials reported that prepositioned stocks 
were a key factor in the success of OIF. Prepositioned stocks provided 
a significant amount of the combat equipment used by the Army and the 
Marine Corps. For the most part, the prepositioned combat systems were 
in good condition and reportedly maintained high readiness rates 
throughout the war. However, the Army's prepositioning program had some 
less-than-modern equipment and had shortfalls, such as trucks, spare 
parts, and other items. Moreover, the warfighters did not always know 
what prepositioned sustainment stocks were available in theater, 
apparently worsening an already overwhelmed theater supply-and-
distribution system. While these challenges were not insurmountable to 
the units, they did slow them down. Fortunately, the long time 
available to build up forces allowed U.S. forces to fill many of the 
shortages and adjust to unfamiliar equipment.

* Much of the prepositioned equipment is still being used to support 
continuing operations in Iraq. It will be several years--depending on 
how long Iraqi Freedom operations continue--before these stocks will be 
available to return to prepositioning programs. And, even after these 
stocks become available, much of the equipment will likely require 
substantial maintenance, or it may be worn out beyond repair. The Army 
has estimated that it has an unfunded requirement of over $1 billion 
for reconstituting the prepositioned equipment used in OIF. However, 
since most prepositioned equipment is still in Southwest Asia and has 
not been turned back to the Army Materiel Command for reconstitution, 
most of the funding is not required at this time. When the 
prepositioned equipment is no longer needed in theater, decisions will 
have to be made about what equipment can be repaired by combat units, 
what equipment must go to depot, and what equipment must be replaced 
with existing or new equipment to enable the Army to reconstitute the 
prepositioned sets that were downloaded for OIF. In the interim, both 
the Army and Marines have kept some land-or sea-based prepositioned 
stocks in the Pacific to cover a possible contingency in that region.

* The defense department faces many issues as it rebuilds its 
prepositioning program and makes plans for how such stocks fit into the 
future. In the near term, the Army and the Marine Corps must 
necessarily focus on supporting ongoing operations in OIF. And while it 
may be several years before most prepositioned assets are available to 
fully reconstitute the Army's programs, opportunities exist to address 
shortfalls and selectively modernize the remaining stocks. For the 
longer term, the department may need to rethink its prepositioning 
programs to ensure that they are in sync with overall transformation 
goals and the evolving military strategy. Some changes are already 
underway. For example, the Army and Marine Corps are pursuing sea-
basing ideas--where prepositioning ships could serve as floating 
logistics bases. Importantly, DOD needs to consider affordability. The 
drawdown of Army forces made prepositioning a practical alternative in 
recent years because the service had ample equipment. However, as the 
services' equipment is transformed or recapitalized, it may not be 
practical to buy enough equipment for units to have one set at their 
home station and another set in prepositioning. Consideration of the 
cost of various options will be critical as the department evaluates 
alternatives for transforming its force structure to achieve future 
mission objectives. Congress will have a key role in reviewing the 
department's assessment of the cost-effectiveness of options to support 
DOD's overall mission, including mobility and force projection.

In responding to your request, we conducted work that included 
officials from Headquarters, U.S. Army and U.S. Marine Corps, 
Washington, D.C.; Army Field Support Command, Rock Island, Illinois; 
Combat Equipment Group-Afloat, Goose Creek, South Carolina; and Blount 
Island Command, Jacksonville, Florida. At these locations, we 
interviewed officials familiar with prepositioning issues during OIF as 
well as plans for the future. We reviewed and obtained relevant 
documentation and performed analyses of reconstitution and options for 
the future. We also reviewed after-action reports on OIF and Operation 
Desert Storm. We obtained service estimates for funding prepositioned 
stocks requirements, but we did not validate these estimates. In 
addition, we drew on the preliminary results of our ongoing reviews of 
OIF lessons learned and OIF reconstitution and on our recent reports on 
OIF supply and distribution issues, Stryker deployment, and Army spare 
parts shortages. We also relied on our 2001 report on Army war reserve 
spare parts shortages, 1998 report on prepositioning in the Army and 
the Air Force, and early 1990s reports on Operation Desert 
Storm.[Footnote 1] We performed our work in March 2004 in accordance 
with generally accepted government auditing standards.

Background:

The basic purpose of prepositioning is to allow DOD to field combat-
ready forces in days rather than in the weeks it would take if the 
forces and all necessary equipment and supplies had to be brought from 
the United States. However, the stocks must be (1) available in 
sufficient quantities to meet the needs of deploying forces and (2) in 
good condition. For prepositioning programs, these factors define 
"readiness." If on-hand stocks are not what is needed--or are in poor 
condition--the purpose of prepositioning may be defeated because the 
unit will lose valuable time obtaining or repairing equipment and 
supplies. U.S forces had months to build up for OIF, so speed was not 
imperative. Prepositioning sites became reception and staging areas 
during the months leading up to the war, and afforded the military the 
necessary time and access in Kuwait to build up its forces for the 
later offensive operations of OIF.

Prepositioning programs grew in importance to U.S. military strategy 
after the end of the Cold War, particularly for the Army. Recognizing 
that it would have fewer forward-stationed ground forces--and to 
support the two-war strategy of the day--the Army used equipment made 
available from its drawdown to field new sets of combat equipment 
ashore in the Persian Gulf and in Korea. It also began an afloat 
program in the 1990s, using large ships to keep equipment and supplies 
available to support operations around the world. The Marine Corps has 
had a prepositioned capability since the 1980s. Its three Marine 
Expeditionary Forces are each assigned a squadron of ships packed with 
equipment and supplies--the Marines view this equipment as their "go-
to-war" gear. Both the services also have retained some stocks in 
Europe, although the Army stocks have steadily declined since the end 
of the Cold War.[Footnote 2] Today, the Army has sites in the 
Netherlands, Luxembourg, and Italy, while the Marine Corps retains 
stocks in Norway. Figure 1 shows the location of Army and Marine Corps 
prepositioned equipment prior to OIF.

Figure 1: Location of Army and Marine Prepositioned Equipment Prior to 
OIF:

[See PDF for image]

[End of figure]

Prepositioning is an important part of DOD's overall strategic mobility 
calculus. The U.S. military can deliver equipment and supplies in three 
ways: by air, by sea, or by prepositioning. Each part of this triad has 
its own advantages and disadvantages. Airlift is fast, but it is 
expensive to use and impractical for moving all of the material needed 
for a large-scale deployment. Although ships can carry large loads, 
they are relatively slow. Prepositioning lessens the strain on 
expensive airlift and reduces the reliance on relatively slow sealift 
deliveries. However, prepositioning requires the military to maintain 
equipment that essentially duplicates what the unit has at home 
station. Moreover, if the prepositioned equipment stocks are 
incomplete, the unit may have to bring along so much additional 
equipment that using it could still strain lift, especially scarce 
airlift in the early days of a conflict.

Prepositioned Equipment Performed Well in OIF, Despite Shortfalls and 
Other Logistical Challenges:

The Army and Marine Corps reported that their prepositioned equipment 
performed well during OIF but that some problems emerged. We reviewed 
lessons-learned reports and talked to Army and Marine Corps officials 
who managed or used the equipment. We heard general consensus that 
major combat equipment was generally in good condition when drawn and 
that it performed well during the conflict. However, Army officials 
said that some equipment was out-of-date and some critical items like 
trucks were in short supply and parts and other supplies were sometimes 
not available. The officials agreed that, overall, OIF demonstrated 
that prepositioned stocks could successfully support major combat 
operations.

Most of the issues we heard were with the Army's program. Marine Corps 
officials reported few shortfalls in their prepositioned stocks or 
mismatches with unit equipment. This is likely due to two key 
differences between the services. First, the Marines view prepositioned 
stocks as their "go-to-war" gear and give the stocks a very high 
priority for fill and modernization. Second, the units that will use 
the prepositioned stocks are assigned in advance and the Marine Corps 
told us that the combat units feel a sense of "ownership" in the 
equipment. This manifests itself in important ways. For example, the 
Marines have periodic conferences with all involved parties to work out 
exactly what their ships will carry and what the units will need to 
bring with them to the fight. Such an effort to tailor the 
prepositioned equipment increases familiarity, allows for prewar 
planning, and thus minimizes surprises or last-minute adjustments. The 
Marines also train with their gear periodically. By contrast, the Army 
does not designate the sets for any particular unit and provides little 
training with the equipment, especially with the afloat stocks.

Prepositioned Combat Equipment Performed Well:

Personnel who used and managed the equipment agreed that the tanks, 
infantry fighting vehicles, and howitzers were in good condition when 
they were drawn from the prepositioned stocks; moreover, the equipment 
generally stayed operational throughout the fight. For example, the 
Third Infantry Division after-action report said that new systems and 
older systems proved to be very valuable and the tanks and Bradleys 
were both lethal and survivable. Additionally, according to Army 
Materiel Command documents, combat personnel reported that their 
equipment, in many cases, worked better than what they had at home 
station. Moreover, operational readiness data we reviewed showed that 
major combat equipment stayed operational, even in heavy combat across 
hundreds of miles. In fact, officials from both services agreed that 
OIF validated the prepositioning concept and showed that it can 
successfully support major combat operations. Moreover, the U.S. 
Central Command, in an internal lessons-learned effort, concluded that 
prepositioned stocks "proved their worth and were critical in 
successfully executing OIF.":

Some Prepositioned Equipment Was Out-of-Date or Did Not Match Unit 
Needs:

Some of the Army's prepositioned equipment was outdated or did not 
match what the units were used to at home station. At times, this 
required the units to "train down" to older and less-capable equipment 
or bring their own equipment from home. Examples include:

* Bradleys--The prepositioned stocks contained some older Bradley 
Fighting Vehicles that had not received upgrades installed since 
Operation Desert Storm. Such improvements included items like laser 
range finders, Global Positioning System navigation, thermal viewers, 
battlefield identification systems, and others. In addition, division 
personnel brought their own "Linebacker" Bradleys instead of using the 
outdated prepositioned stocks that would have required the crew to get 
out of the vehicle to fire.

* M113 Personnel Carriers--The prepositioned stocks contained many 
older model M113A2 vehicles. This model has difficulty keeping up with 
Abrams tanks and requires more repairs than the newer model M113A3, 
which the units had at home station.

* Trucks--The prepositioned stocks included 1960s-vintage model trucks 
that had manual transmissions and were more difficult to repair. Most 
units now use newer models that have automatic transmissions. The 
effect of this was that soldiers had to learn to drive stick shifts 
when they could have been performing other tasks needed to prepare for 
war; in addition, maintenance personnel were unfamiliar with fixing 
manual transmissions.

* Tank Recovery Vehicle--The prepositioned stocks contained M-88A1 
recovery vehicles. These vehicles have long been known to lack 
sufficient power, speed, and reliability. We reported similar issues 
after Operation Desert Storm.[Footnote 3] According to data collected 
by the Army Materiel Command, these vehicles broke down frequently, 
generally could not keep up with the fast-paced operations, and did not 
have the needed capabilities even when they were in operation.

None of these problems, however, were insurmountable. The U.S. forces 
had months to prepare for OIF, and plenty of time to adjust to the 
equipment they had available. Additionally, the U.S. forces faced an 
adversary whose military proved much less capable than U.S. forces.

Army Faced Spare Parts Shortfalls and Theater Distribution Issues:

Our preliminary work also identified shortfalls in available spare 
parts and major problems with the theater distribution system, which 
were influenced by shortages of trucks and material handling equipment. 
Prior to OIF, the Army had significant shortages in its prepositioned 
stocks, especially in spare parts. This is a long-standing problem. We 
reported in 2001 that the status of the Army's prepositioned stocks and 
war reserves was of strategic concern because of shortages in spare 
parts.[Footnote 4] At that time the Army had on hand about 35 percent 
of its stated requirements of prepositioned spare parts and had about a 
$1-billion shortfall in required spare parts for war reserves.

Table 1 shows the percentage of authorized parts that were available in 
March 2001 in the prepositioned stocks that were later used in OIF. 
These stocks represent a 15-day supply of spare and repair parts for 
brigade units (Prescribed Load List) and for the forward support 
battalion that backs up the brigade unit stocks (Authorized Stockage 
List). While the goal for these stocks was to be filled to 100 percent, 
according to Army officials the Army has not had sufficient funds to 
fill out the stocks. In March 2002, the Army staff directed that 
immediate measures be taken to fix the shortages and provided $25 
million to support this effort. The requirements for needed spare and 
repair parts were to be filled to the extent possible by taking stocks 
from the peacetime inventory or, if unavailable there, from new 
procurement.

Table 1: Status of Army Unit Spare Parts Available in Afloat and 
Selected Land-Based Prepositioned Sets in March 2001[A]:

Location: Afloat; 
Unit type: Brigade set; 
Type of spare parts: Authorized Stockage List; 
Percent fill of authorization: 63.

Location: Afloat; 
Unit type: Brigade set; 
Type of spare parts: Prescribed Load List; 
Percent fill of authorization: 60.

Location: Afloat; 
Unit type: Corps Support; 
Type of spare parts: Authorized Stockage List; 
Percent fill of authorization: 0.

Location: Afloat; 
Unit type: Corps Support; 
Type of spare parts: Prescribed Load List; 
Percent fill of authorization: 30.

Location: Afloat; 
Unit type: Theater Support 1; 
Type of spare parts: Authorized Stockage List; 
Percent fill of authorization: 18.

Location: Afloat; 
Unit type: Theater Support 1; 
Type of spare parts: Prescribed Load List; 
Percent fill of authorization: 15.

Location: Afloat; 
Unit type: Theater Support 2; 
Type of spare parts: Authorized Stockage List; 
Percent fill of authorization: 0.

Location: Afloat; 
Unit type: Theater Support 2; 
Type of spare parts: Prescribed Load List; 
Percent fill of authorization: 6.

Location: Qatar; 
Unit type: Brigade set; 
Type of spare parts: Authorized Stockage List; 
Percent fill of authorization: 13.

Location: Qatar; 
Unit type: Brigade set; 
Type of spare parts: Prescribed Load List; 
Percent fill of authorization: 19.

Location: Qatar; 
Unit type: Division base; 
Type of spare parts: Authorized Stockage List; 
Percent fill of authorization: 0.

Location: Qatar; 
Unit type: Division base; 
Type of spare parts: Prescribed Load List; 
Percent fill of authorization: 0. 

Source: Army Materiel Command.

[A] Information is provided for prepositioned sets later used in OIF 
that were managed by the Army Materiel Command. Army Central Command 
managed the Kuwait set.

[End of table]

By the time the war started in March of 2003, the fill rate had been 
substantially improved but significant shortages remained. The 
warfighter still lacked critical, high-value replacement parts like 
engines and transmissions. These items were not available in the supply 
system and could not be acquired in time. Shortages in spare and repair 
parts have been a systemic problem in the Army over the past few years. 
Our recent reports on Army spares discussed this issue[Footnote 5] and, 
as previously noted, our 2001 report highlighted problems specifically 
with prepositioned spares. According to Army officials, the fill rates 
for prepositioned spare parts--especially high-value spares--were 
purposely kept down because of systemwide shortfalls. The Army's plan 
to mitigate this known risk was to have the units using the 
prepositioned sets to bring their own high-value spare parts in 
addition to obtaining spare parts from non-deploying units.

Nonetheless, according to the Third Infantry Division OIF after-action 
report, spare parts shortages were a problem and there were also other 
shortfalls. In fact, basic loads of food and water, fuel, construction 
materials, and ammunition were also insufficient to meet the unit 
sustainment requirements.

The combatant commander had built up the OIF force over a period of 
months, departing from doctrinal plans to have receiving units in 
theater to receive the stocks. When it came time to bring in the backup 
supplies, over 3,000 containers were download from the sustainment 
ships, which contained the required classes of supply--food, fuel, and 
spare parts, among others. The theater supply-and-distribution system 
became overwhelmed. The situation was worsened by the inability to 
track assets available in theater, which meant that the warfighter did 
not know what was available. The Third Infantry Division OIF after-
action report noted that some items were flown in from Europe or Fort 
Stewart because they were not available on the local market. Taken 
together, all these factors contributed to a situation that one Army 
after-action report bluntly described as "chaos.":

Our recent report on logistics activities in OIF described a theater 
distribution capability that was insufficient and ineffective in 
managing and transporting the large amount of supplies and equipment 
during OIF.[Footnote 6] For example, the distribution of supplies to 
forward units was delayed because adequate transportation assets, such 
as cargo trucks and materiel handling equipment, were not available 
within the theater of operations. The distribution of supplies was also 
delayed because cargo arriving in shipping containers and pallets had 
to be separated and repackaged several times for delivery to multiple 
units in different locations. In addition, DOD's lack of an effective 
process for prioritizing cargo for delivery precluded the effective use 
of scarce theater transportation assets. Finally, one of the major 
causes of distribution problems during OIF was that most Army and 
Marine Corps logistics personnel and equipment did not deploy to the 
theater until after combat troops arrived, and in fact, most Army 
personnel did not arrive until after major combat operations were 
underway.

Continuing Support of Operations Will Likely Delay Reconstitution:

Forces are being rotated to relieve personnel in theater. Instead of 
bringing their own equipment, these troops are continuing to use 
prepositioned stocks. Thus, it may be several years--depending on how 
long the Iraqi operations continue--before these stocks can be 
reconstituted.

The Marine Corps used two of its three prepositioned squadrons (11 of 
16 ships) to support OIF. As the Marines withdrew, they repaired some 
equipment in theater but sent much of it back to their maintenance 
facility in Blount Island, Florida. By late 2003, the Marine Corps had 
one of the two squadrons reconstituted through an abbreviated 
maintenance cycle, and sent back to sea.[Footnote 7] However, to 
support ongoing operations in Iraq, the Marine Corps sent equipment for 
one squadron back to Iraq, where it is expected to remain for all or 
most of 2004. The Marine Corps is currently performing maintenance on 
the second squadron of equipment that was used during OIF, and this 
work is scheduled to be completed in 2005.

Most of the equipment that the Army used for OIF is still in use or is 
being held in theater in the event it may be needed in the future. The 
Army used nearly all of its prepositioned ship stocks and its ashore 
stocks in Kuwait and Qatar, as well as drawing some stocks from Europe. 
In total, this included more than 10,000 pieces of rolling stock, 
670,000 repair parts, 3,000 containers, and thousands of additional 
pieces of other equipment. According to Army officials, the Army is 
repairing this equipment in theater and reissuing it piece-by-piece to 
support ongoing operations. Thus far, the Army has reissued more than 
11,000 pieces of equipment, and it envisions that it will have to issue 
more of its remaining equipment to support future operations. Thus, it 
may be 2006 or later before this equipment becomes available to be 
reconstituted to refill the prepositioned stocks. Officials also told 
us that, after having been in use for years in harsh desert conditions, 
much of the equipment would likely require substantial maintenance and 
some will be worn out beyond repair. Figure 2 shows OIF trucks needing 
repair.

Figure 2: Some Trucks Used in OIF that Need Repair:

[See PDF for image]

[End of figure]

Both the Army and the Marine Corps have retained prepositioned stocks 
in the Pacific to cover a possible contingency in that region. While 
the Marine Corps used two of its three squadrons in OIF, it left the 
other squadron afloat near Guam. The Army used most of its ship stocks 
for OIF, but it still has a brigade set available in Korea and one 
combat ship is on station to support a potential conflict in Korea, 
although it is only partially filled. Both the Army and the Marine 
Corps used stocks from Europe to support OIF. The current status of the 
services' prepositioned sets is discussed in table 2.

Table 2: Current Status of Selected Prepositioning Programs (as of 
March 2004):

Army; 
Location: Kuwait and Qatar; 
Status: The equipment and supplies from these locations are still in 
use to support continuing operations in Iraq.

Army; 
Location: Korea; 
Status: This brigade set of equipment is currently filled to 
approximately 90 percent.

Army; 
Location: Afloat; 
Status: Equipment and supplies from 10 of 11 ships were downloaded to 
support OIF and most of this equipment remains in Iraq or Kuwait. One 
combat ship has been partially filled to support two Army battalions. 
One ammunition ship remains on station and another is in its 
maintenance cycle. The Army is also working to reconstitute equipment 
for a support ship and another combat ship, but it is unclear how much 
equipment will be available to source these requirements.

Army; 
Location: Europe; 
Status: Stocks in Luxembourg, the Netherlands, and Italy have been 
depleted to support ongoing operations.

Marines; 
Location: Afloat (Guam); 
Status: This 6-ship squadron was not used in OIF and has almost its 
full complement of stocks.

Marines; 
Location: Afloat (Mediterranean); 
Status: One ship has been downloaded in support of OIF and another has 
been partially downloaded. This squadron's equipment is currently 
filled to about half of its requirement and will complete its normal 
maintenance cycle in 2005.

Marines; 
Location: Afloat (Diego Garcia); 
Status: This squadron's equipment was used during the first phase of 
OIF, was repaired to combat condition but not to normal standards, and 
has been downloaded for reuse in Iraq.

Marines; 
Location: Norway; 
Status: Stocks in Norway were used to support OIF. Currently, the 
stocks have approximately two-thirds of the authorized equipment. 

Source: U.S. Army and U.S. Marine Corps data.

[End of table]

Army and Marine Corps maintenance officials told us that it is 
difficult to reliably estimate the costs of reconstituting the 
equipment because so much of it is still in use. As a result, the 
reconstitution timeline is unclear. Based on past experience, it is 
reasonable to expect that the harsh desert environment in the Persian 
Gulf region will exact a heavy toll on the equipment. For example, we 
reported in 1993 that equipment returned from Operation Desert Storm 
was in much worse shape than expected because of exposure for lengthy 
periods to harsh desert conditions. The Army has estimated that the 
cost for reconstituting its prepositioned equipment assets is about 
$1.7 billion for depot maintenance, unit level maintenance, and 
procurement of required parts and supplies. A request for about $700 
million was included in the fiscal year 2004 Global War on Terrorism 
supplemental budget, leaving a projected shortfall of about $1 billion. 
Army Materiel Command officials said they have thus far received only a 
small part of the amount funded in the 2004 supplemental for 
reconstitution of the prepositioned equipment, but they noted that not 
much equipment has been available. Additionally, continuing operations 
in Iraq have been consuming much of the Army's supplemental funding 
intended for reconstitution. Since much of the equipment is still in 
Southwest Asia, it is unclear how much reconstitution funding for its 
prepositioned equipment the Army can use in fiscal year 2005. But it is 
clear that there is a significant bill that will have to be paid for 
reconstitution of Army prepositioned stocks at some point in the 
future, if the Army intends to reconfigure the afloat and land-based 
prepositioned sets that have been used in OIF.

Issues Facing the Prepositioning Program:

The defense department faces many issues as it rebuilds its 
prepositioning program and makes plans for how such stocks fit into the 
transformed military. In the near term, the Army and the Marine Corps 
must focus on supporting current operations and reconstituting their 
prepositioning sets. Moreover, we believe that the Army may be able to 
take some actions to address the shortfalls and other problems it 
experienced during OIF. In the long term, however, DOD faces 
fundamental issues as it plans the future of its prepositioning 
programs.

Near-Term Issues:

As it reconstitutes its program, the Army would likely benefit from 
addressing the issues brought to light during OIF, giving priority to 
actions that would address long-standing problems, mitigate near-term 
risk, and shore up readiness in key parts of its prepositioning 
program. These include:

* ensuring that it has adequate equipment and spare parts and 
sustainment supplies in its prepositioning programs, giving priority to 
afloat and Korea stocks;

* selectively modernizing equipment so that it will match unit 
equipment and better meet operational needs; and:

* planning and conducting training to practice drawing and using 
prepositioned stocks, especially afloat stocks.

Based on some contrasts in the experiences between the Army and the 
Marine Corps with their prepositioned equipment and supplies in OIF, 
some officials we spoke to agree that establishing a closer 
relationship between operational units and the prepositioned stocks 
they would be expected to use in a contingency is critical to wartime 
success. The Marines practice with their stocks and the Army could 
benefit from training on how to unload, prepare, and support 
prepositioned stocks, particularly afloat stocks. While the Army has 
had some exercises using its land-based equipment in Kuwait and Korea, 
it has not recently conducted a training exercise to practice unloading 
its afloat assets. According to Army officials, such exercises have 
been scheduled over the past few years, but were cancelled due to lack 
of funding.

Long-term Issues:

The long-term issues transcend the Army and Marines, and demand a 
coordinated effort by the department. In our view, three main areas 
should guide the effort.

* Determine the role of prepositioning in light of the efforts to 
transform the military. Perhaps it is time for DOD to go back to the 
drawing board and ask: what is the military trying to achieve with 
these stocks and how do they fit into future operational plans? If, as 
indicated in Desert Storm and OIF, prepositioning is to continue to 
play an important part in meeting future military commitments, priority 
is needed for prepositioning as a part of transformation planning in 
the future.

* Establish sound prepositioning requirements that support joint 
expeditionary forces. If DOD decides that prepositioning is to continue 
to play an important role in supporting future combat operations, 
establishing sound requirements that are fully integrated is critical. 
The department is beginning to rethink what capabilities could be 
needed. For example, the Army and Marines are pursuing sea-basing 
ideas--where prepositioning ships could serve as offshore logistics 
bases. Such ideas seem to have merit, but are still in the conceptual 
phases, and it is not clear to what extent the concepts are being 
approached to maximize potential for joint operations. In our view, 
options will be needed to find ways to cost-effectively integrate 
prepositioning requirements into the transforming DOD force structure 
requirements. For example, Rand recently published a report suggesting 
that the military consider prepositioning support equipment to help the 
Stryker brigade meet deployment timelines.[Footnote 8] Such support 
equipment constitutes much of the weight and volume of the brigade, but 
a relatively small part of the costs compared to the combat systems. 
Such an option may be needed, since our recent report revealed that the 
Army would likely be unable to meet its deployment timelines for the 
Stryker brigade.[Footnote 9]

* Ensure that the program is resourced commensurate with its priority, 
and is affordable even as the force is transformed. In our view, DOD 
must consider affordability. In the past, the drawdown of Army forces 
made prepositioning a practical alternative because it made extra 
equipment available. However, as the services' equipment is transformed 
and recapitalized, it may not be practical to buy enough equipment for 
units at home station and for prepositioning. Prepositioned stocks are 
intended to reduce response times and enable forces to meet the demands 
of the full spectrum of military operations. Once the future role of 
prepositioning is determined, and program requirements are set, it will 
be important to give the program proper funding priority. Congress will 
have a key role in reviewing the department's assessment of the cost 
effectiveness of options to support DOD's overall mission, including 
prepositioning and other alternatives for projecting forces quickly to 
the far reaches of the globe.

Mr. Chairman, I hope this information is useful to Congress as it 
considers DOD's plans and funding requests for reconstituting its 
prepositioned stocks as well as integrating prepositioning into the 
department's transformation of its military forces.

This concludes my prepared statement. I would be happy to answer any 
questions that you or the Members of the Subcommittee may have.

Contacts and Acknowledgments:

For questions about this statement, please contact William M. Solis at 
(202) 512-8365 (e-mail address: Solisw@gao.gov), Julia Denman at (202) 
512-4290 (e-mail address: denmanj@gao.gov), or John Pendleton at (404) 
679-1816 (e-mail address: pendletonj@gao.gov). Additional individuals 
making key contributions included Nancy Benco, Robert Malpass, Tinh 
Nguyen, and Tanisha Stewart.

FOOTNOTES

[1] U.S. General Accounting Office, Defense Logistics: Preliminary 
Observations on the Effectiveness of Logistics Activities during 
Operation Iraqi Freedom, GAO-04-305R (Washington, D.C.: Dec. 18, 2003); 
Military Transformation: Realistic Deployment Timelines Needed for Army 
Stryker Brigades, GAO-03-801 (Washington, D.C.: June 30, 2003); 
Defense Inventory: The Army Needs a Plan to Overcome Critical Spare 
Parts Shortages, GAO-03-705 (Washington, D.C.: June 27, 2003); Defense 
Inventory: Army War Reserve Spare Parts Requirements Are Uncertain, 
GAO-01-425 (Washington, D.C.: May 10, 2001); Military Prepositioning: 
Army and Air Force Programs Need to Be Reassessed, GAO/NSIAD-99-6 
(Washington, D.C.: Nov. 16, 1998); Operation Desert Shield/Storm: 
Impact of Defense Cooperation Account Funding on Future Maintenance 
Budgets, GAO/NSIAD-93-179 (Washington, D.C.: June 10, 1993); and 
Operation Desert Storm: Early Performance Assessment of Bradley and 
Abrams, GAO/NSIAD-92-94 (Washington, D.C.: Jan. 10, 1992).

[2] U.S. General Accounting Office, Army War Reserves: DOD Could Save 
Millions by Aligning Resources with the Reduced European Mission, GAO/
NSIAD-97-158 (Washington, D.C.: Jul. 11, 1997).

[3] GAO/NSIAD-92-94.

[4] GAO-01-425.

[5] GAO-03-705.

[6] GAO-04-305R.

[7] Marine Corps officials told us that they focused on getting 
equipment repaired to a mission-capable status, but did not return the 
equipment to the high standard to which it is normally maintained. 

[8] Eric Pelty, John M. Halliday, and Aimee Bower, Speed and Power: 
Toward an Expeditionary Army (Santa Monica, Calif.: Rand Arroyo Center, 
2003). 

[9] U.S. General Accounting Office, Army Stryker Brigades: Assessment 
of External Logistics Support Should Be Documented for the 
Congressionally Mandated Review of the Army's Operational Evaluation 
Plan, GAO-03-484R (Washington, D.C.: Mar. 28, 2003).