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Funding Priorities, and Risks for Selected Equipment' which was 
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Report to Congressional Requesters:

December 2003:

MILITARY READINESS:

DOD Needs to Reassess Program Strategy, Funding Priorities, and Risks 
for Selected Equipment:

GAO-04-112:

GAO Highlights:

Highlights of GAO-04-112, a report to congressional requesters 

Why GAO Did This Study:

GAO was asked to assess the condition of key equipment items and to 
determine if the services have adequate plans for sustaining, 
modernizing, or replacing them. To address these questions, we 
selected 25 major equipment items, and determined (1) their current 
condition, (2) whether the services have mapped out a program strategy 
for these items, (3) whether current and projected funding is 
consistent with these strategies, and (4) whether these equipment 
items are capable of fulfilling their wartime missions.

What GAO Found:

Many of our assessments of 25 judgmentally selected critical 
equipment items indicated that the problems or issues we identified 
were not severe enough to warrant action by the Department of Defense, 
military services, and/or the Congress within the next 5 years. The 
condition of the items we reviewed varies widely from very poor for 
some of the older equipment items like the Marine Corps CH-46E Sea 
Knight Helicopter to very good for some of the newer equipment items 
like the Army Stryker vehicle. The problems we identified were 
largely due to (1) maintenance problems caused by equipment age and a 
lack of trained and experienced technicians, and (2) spare parts 
shortages.

Although the services have mapped out program strategies for 
sustaining, modernizing, or replacing most of the equipment items we 
reviewed, some gaps exist. In some cases, such as the KC-135 
Stratotanker and the Tomahawk missile, the services have not fully 
developed or validated their plans for the sustainment, 
modernization, or replacement of the items. In other cases, the 
services’ program strategies for sustaining the equipment are 
hampered by problems or delays in the fielding of replacement 
equipment or in the vulnerability of the programs to budget cuts.

For 15 of the 25 equipment items we reviewed, there appears to be a 
disconnect between the funding requested by the Department of Defense 
or projected in the Future Years Defense Program and the services’ 
program strategies to sustain or replace the equipment items. For 
example, we identified fiscal year 2003 unfunded requirements, as 
reported by the services, totaling $372.9 million for four major 
aircraft—the CH-47D helicopter, F-16 fighter aircraft, C-5 transport 
aircraft, and CH-46E transport helicopter.

The 25 equipment items we reviewed appear to be capable of fulfilling 
their wartime missions. While we were unable to obtain sufficient data 
to definitively assess wartime capability because of ongoing 
operations in Iraq, the services, in general, will always ensure 
equipment is ready to go to war, often through surging their 
maintenance operations and overcoming other obstacles. Some of the 
equipment items we reviewed, however, have capability deficiencies 
that could degrade their wartime performance in the near term.

What GAO Recommends:

GAO recommends that the Secretary of Defense reassess program 
strategies and funding priorities for key equipment items to ensure 
that the equipment items are sustained until replacement items are 
fielded. The department should also highlight for the Congress risks 
involved in sustaining these equipment items and steps the department 
is taking to address those risks. In its written comments on a draft 
of this report, the department partially concurred that it needed to 
reassess program strategies and funding priorities, but did not agree 
that it needed to provide the Congress with additional information on 
the potential risks. Because the department did not agree, the report 
includes a Matter for Congressional Consideration suggesting that the 
Congress may wish to require the department to provide this 
information.

www.gao.gov/cgi-bin/getrpt?GAO-04-112.
 
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]

Contents:

Letter: 

Results in Brief: 

Background: 

Overall Condition of Selected Equipment Items Varies Widely: 

Services Have Mapped Out Long-Range Program Strategies for Sustaining 
and Modernizing Most Equipment Items but Some Gaps Exist: 

Requested Funding Does Not Reflect the Services' Long-Range 
Program Strategies: 

Equipment Is Generally Capable of Fulfilling Wartime Missions despite 
Some Limitations: 

Conclusions: 

Recommendations for Executive Action: 

Matter for Congressional Consideration: 

Agency Comments and Our Evaluation: 

Appendixes:

Appendix I: Scope and Methodology: 

Appendix II: Assessments of Selected Equipment Items: 

Appendix III: Comments from the Department of Defense: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Assessment Summary: 

Table 2: Unfunded Requirements for Selected Aircraft Equipment Items, 
Fiscal Year 2003: 

Figures: 

Figure 1: Abrams Tank: 

Figure 2: AH-64A/D Apache Helicopter: 

Figure 3: Stryker: 

Figure 4: CH-47D/F Chinook Helicopter: 

Figure 5: Heavy Expanded Mobility Tactical Truck: 

Figure 6: Patriot Missile: 

Figure 7: Guided Multiple Launch Rocket System: 

Figure 8: F-16 Fighting Falcon Aircraft: 

Figure 9: B-2 Spirit Bomber: 

Figure 10: C-5 Galaxy Transport Aircraft: 

Figure 11: KC-135 Stratotanker Aircraft: 

Figure 12: Conventional Air Launched Cruise Missile: 

Figure 13: Joint Direct Attack Munition: 

Figure 14: DDG-51 Arleigh Burke Class Destroyer: 

Figure 15: FFG-7 Oliver Hazard Perry Class Frigate: 

Figure 16: F/A-18 Hornet/Super Hornet Aircraft: 

Figure 17: EA-6B Prowler Aircraft: 

Figure 18: LPD-4 Amphibious Transport Dock Ship: 

Figure 19: Standard Missile-2 Surface-to-Air Missile: 

Figure 20: Tomahawk Cruise Missile: 

Figure 21: AH-1W Super Cobra Helicopter: 

Figure 22: CH-46E Sea Knight Helicopter: 

Figure 23: Assault Amphibian Vehicle-Personnel: 

Figure 24: Light Armored Vehicle-Command & Control: 

Figure 25: AGM-65E Maverick Missile: 

Abbreviations: 

AAV: Assault Amphibian Vehicle:

AAW: anti-air warfare:

ACC: Air Combat Command:

ASW: anti-submarine warfare:

ATGM: Anti-Tank Guided Missile Vehicle:

CALCM: Conventional Air Launched Cruise Missile:

CBR: Center Barrel Replacement:

CV: Commander Vehicle:

DOD: Department of Defense:

DPICM: Dual Purpose Improved Convention Munition:

EFV: Expeditionary Fighting Vehicle (formerly the AAAV--Advanced 
Amphibious Assault Vehicle):

ERAM: Extended Range Active Missile:

ESV: Engineer Squad Vehicle:

FLE: Fatigue life expenditure:

FSV: Fire Support Vehicle:

FYDP: Future Years Defense Plan:

GMLRS-: Guided Multiple Launch Rocket System:

HEMTT: Heavy Expanded Mobility Tactical Truck:

HME: hull, mechanics, and electrical:

ICAPIII: Improved Capability 3rd Generation:

ICV: Infantry Carrier Vehicle:

JDAM: Joint Direct Attack Munition:

LAR: Light Armored Reconnaissance:

LAV-C2: Light Armored Vehicle-Command & Control:

MC: Mortar Carrier:

MEV: Medical Evacuation:

MGS: Mobile Gun System:

NBCRV: Nuclear Biological and Chemical Reconnaissance Vehicle:

OMB: operation and maintenance:

O&S: Operation and Support:

PAC-3: Patriot Missile:

QDR: Quadrennial Defense Review:

RAM: Rolling Airframe Missile:

RAM/RS: Reliability, Availability and Maintenance/Rebuild to Standard:

RHIB: Ridged Hull Inflatable Boat:

RV: Reconnaissance Vehicle:

SEP: Systems Enhancement Program:

SLEP: Service Life Extension Program:

TACTOM: Tactical Tomahawk:

Letter December 19, 2003:

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

The Honorable John Murtha:
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives:

The Honorable Norm Dicks: 
House of Representatives:

Many of the weapons and support equipment items in the Department of 
Defense's inventory were purchased in the 1970s and 1980s, and are 
likely to reach the end of their expected useful lives in this decade 
unless major modernizations are made. Equipment age as well as delays 
in fielding replacement systems can adversely affect maintenance costs, 
and ultimately, equipment readiness and wartime capabilities. The added 
effects of simultaneous military deployments and recent increases in 
operating tempo place additional stress on equipment that is, in some 
cases, more than 30 years old.

The department is faced with the challenges of both sustaining and 
transforming the current military force structure, including replacing 
aging equipment. The costs associated with meeting these challenges are 
likely to be significant. For example, a 2001 Joint Chiefs of Staff 
analysis of the funding needed to sustain the current force structure 
concluded that a procurement budget of $100 billion to $110 billion 
would be required annually. The President's fiscal year 2004 budget 
request included a total of about $72.7 billion for Defense 
procurement, an amount significantly less than that identified by the 
Joint Chiefs of Staff. In addition, the Congressional Budget Office 
estimated that the investment needed to develop and purchase new 
Defense equipment would likely increase from $137 billion in fiscal 
year 2004 to a peak of about $223 billion in fiscal year 2013 if cost 
risk is considered.[Footnote 1] The impending reconstitution of 
equipment resulting from Operation Iraqi Freedom will also 
require billions of dollars. Competing for these funds for sustainment 
and modernization are the Department of Defense's efforts to transform 
its current force structure into a force that maintains or improves its 
lethality but deploys faster, is lighter, and relies on information 
rather than brute force to defeat its adversary.

You asked us to assess the condition of key equipment items and to 
determine if the services had adequate plans to address identified 
deficiencies. Specifically, you asked that we determine which items 
warranted immediate attention by the department and/or the Congress. 
You also asked us to identify whether the department's procurement 
plans and projected budgets are sufficient to sustain or improve these 
equipment items. To address these objectives, we determined:

* the current condition of key military equipment items;

* whether the services have mapped out a long-range program strategy 
for sustaining, modernizing, or replacing[Footnote 2] these equipment 
items consistent with the current condition and expected service life;

* whether current and projected funding for these equipment items 
through fiscal year 2009 is consistent with the services' program 
strategies for sustaining, modernizing, or replacing the equipment; 
and:

* whether these equipment items are generally capable of fulfilling 
their wartime missions.

As agreed with your offices, we worked with the military services to 
judgmentally select 25 equipment items that are key in terms of meeting 
the strategy outlined in the September 2001 Quadrennial Defense Review. 
We selected approximately two weapons equipment items, two support 
equipment items, and two munitions from the Army, Air Force, Navy, and 
Marine Corps.[Footnote 3] We relied extensively on input from the 
military services and prior GAO work to select equipment items that 
have been in use for a number of years and are critical to supporting 
the services' missions. The 25 equipment items we selected were those 
that the military services agreed were critical to meeting current 
capability requirements and defined as essential to meet the strategy 
laid out under the Quadrennial Defense Review. Our assessments apply 
only to the 25 equipment items we reviewed. Consequently, the results 
of our assessments cannot be projected to the entire inventory of 
Department of Defense equipment.

Our analysis of the condition of these 25 equipment items focused on a 
number of key metrics, including equipment age, performance, and use 
from fiscal year 1998 to fiscal year 2002. To assess condition, we 
obtained data on equipment age and expected service life and other 
specific service performance indicators such as mission capable 
rates,[Footnote 4] utilization rates,[Footnote 5] and various other 
metrics. While we limited our observations and assessments to equipment 
in the active duty inventory, the readiness data and other metrics we 
collected from the military services also includes equipment in the 
guard and reserve forces. Our review of the program strategy for these 
equipment items focused on the extent to which the services have 
developed or updated their plans for the sustainment, modernization, or 
recapitalization of the equipment items to the end of the items' useful 
service lives in order to meet mission requirements. Our review of the 
funding for these equipment items focused on the extent to which the 
services' requests for sustainment, modernization, and 
recapitalization funds in the current and historical defense budgets 
and the projected funding envisioned in the Future Years Defense 
Program reflect their long-range program strategies. The Future Years 
Defense Program reflects the department's official projection of the 
forces and resources needed to support the programs approved by the 
Secretary of Defense for the prior year, current year, biennial 
budget years, and the following four years. According to Department of 
Defense officials, the Future Years Defense Program takes the services' 
priorities into consideration, balancing future investment and risk. 
Our review of the wartime capability of the selected equipment items 
focused on the extent to which each of the equipment items is capable 
of fulfilling its wartime mission. Because of ongoing operations in 
Iraq and our limited access to the deployed units and equipment 
performance indicators during these operations, we were unable to 
obtain sufficient data to definitively assess wartime capability for 
all of the 25 equipment items we reviewed. Therefore, our assessments 
of wartime capability are limited to anecdotal evidence obtained 
primarily through discussions with military service officials, program 
managers, and equipment operators and maintainers. In some cases we 
were able to obtain specific data regarding wartime capability for 
specific equipment items; however, data availability was not consistent 
across all of the military services.

We met with officials from all four of the military services, one 
selected combatant command,[Footnote 6] and several major commands. We 
also visited selected units and maintenance facilities to observe the 
equipment items during operation or under maintenance, and discussed 
condition and wartime capability issues with program managers and 
equipment operators and maintainers.

To determine which equipment items require immediate attention by the 
department, the military services, and/or the Congress, we developed an 
assessment framework based on three criteria: (1) the extent of the 
existence of a problem or issue, (2) the severity of the problem or 
issue, and (3) the estimated time frame within which the problem or 
issue needs to be addressed. To assess the relative ranking of the 
25 equipment items, we used a traffic light approach--red, yellow, or 
green--to indicate the existence, severity, and urgency of the problem 
as follows:

* Red indicates a problem or issue that is severe enough to warrant 
action by the Department of Defense, the military services, and/or the 
Congress within the next 1-3 years;

[See PDF for image]

[End of figure]

* Yellow indicates a problem or issue that is severe enough to warrant 
action by the Department of Defense, the military services and/or the 
Congress within the next 3-5 years; and:

[See PDF for image]

[End of figure]

* Green indicates that we did not identify any specific problems or 
issues at the time of our review, or that any existing problems or 
issues we identified are not of a severe enough nature that we believe 
warrant action by the Department of Defense, the military services and/
or the Congress within the next 5 years.

[See PDF for image]

[End of figure]

While we attempted to obtain consistent metrics for each of the other 
three categories across all four of the military services, data 
availability varied significantly by service and type of equipment. Our 
assessments, therefore, are based on the data available to us from 
multiple sources. Our assessments represent the problems and issues we 
identified at the specific point in time that we conducted our work, 
and can change quickly given current events. Although our assessments 
for each of the four categories--condition, program strategy, funding, 
and wartime capability--are largely qualitative in nature, our analyses 
are based on data and information provided by the military services and 
discussions with military service officials and program managers for 
the individual equipment items. We do not provide color-coded 
assessments for the wartime capability of each equipment item in this 
report because, as previously mentioned, we were unable to obtain 
adequate data to perform a definitive assessment of wartime 
capabilities.

For a complete description of our methodology, see appendix I. 
Appendix II contains our detailed assessments for each of the 
25 equipment items. We performed our review from September 2002 through 
October 2003 in accordance with generally accepted government auditing 
standards.

Results in Brief:

As table 1 indicates, many of our assessments of the condition, program 
strategy, and funding for each of the 25 equipment items we reviewed 
indicate that the problems or issues we identified were not severe 
enough to warrant action by the Department of Defense, military 
services, and/or the Congress within the next 5 years. However, the 
table also indicates that some equipment items have severe enough 
problems related to condition, program strategy, and funding to warrant 
more immediate action by the Department of Defense, the military 
services, and/or the Congress. Specifically, as shown in the table, we 
identified problems and issues related to the Army's CH-47D, the Marine 
Corps' CH-46E, the Air Force's KC-135, and the Navy's EA-6B Prowler, 
Standard Missile-2, and Tomahawk missile that we believe warrant action 
within the next 1 to 3 years. The remaining items, while not yet severe 
enough to warrant immediate action by the Department of Defense, the 
military services, and/or the Congress, showed signs of problems 
related to condition, program strategy, or funding that, if not 
addressed within the next 3 to 5 years, could become severe. While we 
did not definitively assign a color-coded assessment of the wartime 
capability for each of the 25 equipment items, military service 
officials, program managers, operators, and maintainers we met with 
identified a number of concerns that are discussed later.

Table 1: Assessment Summary:

Army: 

Equipment: Abrams Tank; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Yellow. 

Equipment: AH-64 A/D Apache Helicopter; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Equipment: Stryker; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Equipment: CH-47D/F Chinook Helicopter; 
Assessment Area: Condition: Red; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Yellow. 

Equipment: Heavy Expanded Mobility Tactical Truck; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Yellow. 

Equipment: Patriot Missile; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Equipment: Guided Multiple Launch Rocket System; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Air Force: 

Equipment: F-16 Fighting Falcon Aircraft; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Yellow. 

Equipment: B-2 Spirit Bomber; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Equipment: C-5 Galaxy Transport Aircraft; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Yellow. 

Equipment: KC-135 Stratotanker Aircraft; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Red; 
Assessment Area: Funding: Red. 

Equipment: Conventional Air Launched Cruise Missile; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Equipment: Joint Direct Attack Munition; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Navy: 

Equipment: DDG-51Arleigh Burke Class Destroyer; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Yellow. 

Equipment: FFG-7 Oliver Hazard Perry Class Frigate; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Yellow. 

Equipment: F/A-18 Hornet/Super Hornet Aircraft; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Yellow. 

Equipment: EA-6B Prowler Aircraft; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Red. 

Equipment: LPD-4 Amphibious Transport Dock Ship; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Yellow. 

Equipment: Standard Missile-2 Surface-to-Air Missile; 
Assessment Area: Condition: Red; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Red. 

Equipment: Tomahawk Cruise Missile; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Red; 
Assessment Area: Funding: Red. 

Marine Corps: 

Equipment: AH-1W Super Cobra Helicopter; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Equipment: CH-46E Sea Knight Helicopter; 
Assessment Area: Condition: Red; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Red. 

Equipment: Assault Amphibian Vehicle-Personnel; 
Assessment Area: Condition: Yellow; 
Assessment Area: Program Strategy: Yellow; 
Assessment Area: Funding: Yellow. 

Equipment: Light Armored Vehicle-Command and Control Variant; 
Assessment Area: Condition: Green; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Equipment: AGM-65E Maverick Missile; 
Assessment Area: Condition: [A]; 
Assessment Area: Program Strategy: Green; 
Assessment Area: Funding: Green. 

Source: GAO analysis of military service data.

[A] The Marine Corps does not track trend data such as mission capable 
rates or operational readiness rates for munitions as it does for 
aircraft or other equipment.

[End of table]

Condition:

The condition of the selected equipment items we reviewed varies widely 
from very poor for some of the older equipment items like the Marine 
Corps CH-46E helicopter to very good for some of the newer equipment 
items like the Army Stryker vehicle. The three equipment items for 
which we assessed the current condition as red and in our opinion 
warrants attention within 1 to 3 years are the CH-47D helicopter, the 
Standard Missile-2 munitions, and the CH-46E helicopter. These items 
generally did not meet mission capable or operational readiness goals 
for sustained periods and were either older equipment items and/or had 
high utilization rates. The 11 items for which we assessed the 
condition as yellow also may have failed to meet mission capable or 
operational readiness goals, but to a lesser extent. Left unattended, 
the condition of some of these yellow items may worsen. There were 
various reasons for the degraded condition of these equipment items 
including maintenance problems due to parts or personnel inadequacies. 
Parts inadequacies include parts shortages, unreliable parts, or 
obsolete parts due to the advanced age of the equipment. Equipment 
operators believed a lack of trained and experienced technicians also 
affected equipment items' condition.

Program Strategy:

Although the services have mapped out program strategies for 
sustaining, modernizing, or replacing most of the equipment items we 
reviewed, some gaps exist. In some cases, such as the KC-135 
Stratotanker and the Tomahawk missile, the services have not fully 
developed or validated their plans for the sustainment, modernization, 
or replacement of the equipment items. For example, in the case of the 
KC-135, the Air Force developed a long-term program strategy to 
modernize the aging KC-135 tanker fleet but as we have previously 
reported[Footnote 7] has not demonstrated the urgency of acquiring 
replacement aircraft and has not defined the requirements for the 
number of aircraft needed. In other cases, the services' program 
strategies for sustaining the equipment are hampered by problems or 
delays in the fielding of replacement equipment or in the vulnerability 
of the programs to budget cuts. As a result, the services may incur 
increased costs due to maintenance to sustain aging equipment items in 
the event that the replacement equipment is not fielded as scheduled. 
For example, the planned replacement equipment for the Marine Corps 
CH-46E helicopter (i.e., the MV-22 Osprey) has been delayed by about 
3 years and is not scheduled to be fielded until 2007; as a result, the 
Marine Corps will have to retain more CH-46E helicopters in its 
inventory longer than it had planned. Similarly, procurement of the 
replacement equipment for the Marine Corps' Assault Amphibian Vehicle 
has been delayed. The program strategy for the Assault Amphibian 
Vehicle includes overhauls, but for only 680 of the 1,057 vehicles in 
the inventory.[Footnote 8] Other program strategies which we assessed 
as yellow may need to be validated or updated because the programs are 
highly susceptible to budget cuts as the equipment item's mission 
changes. For example, planned modernization programs for Navy frigates 
are susceptible to budget cuts, according to Navy officials, because 
their future role is uncertain given the development of the Littoral 
Combat ship. In the meantime, the frigates are being used increasingly 
for homeland defense missions, yet their program strategy does not 
reflect that they are being used more often and in different ways.

Funding:

There appears to be a disconnect between the funding requested by the 
Department of Defense or projected in the Future Years Defense Program 
and the services' program strategies to sustain or replace many of the 
equipment items we reviewed. According to Department of Defense 
officials, the Future Years Defense Program strikes a balance between 
future investment and program risk and takes into consideration the 
services' stated requirements as approved by the department. 
Specifically, we assessed the funding for 15 of the 25 equipment items 
we reviewed as either red or yellow because current and projected 
Department of Defense funding is not consistent with the services' 
stated requirements to support their program strategies for these 
equipment items. For example, we identified fiscal year 2003 unfunded 
requirements, as reported by the services, totaling $372.9 million for 
four major aircraft equipment items--the CH-47D helicopter, F-16 
fighter aircraft, C-5 transport aircraft, and CH-46E transport 
helicopter.[Footnote 9] We did not, however, independently verify these 
unfunded requirements. The most significant funding shortfalls occurred 
when parts, equipment upgrades, and maintenance were not fully funded. 
In addition, according to service officials, requests for funds for 
some older equipment items are sometimes reduced on the basis of 
anticipated fielding of replacement equipment items in the near future. 
Gaps in funding also result when fielding of the replacement equipment 
items is delayed and the older equipment must be sustained longer than 
anticipated. Funding for the older equipment items may also be a target 
for funding reductions to support higher service transformation 
priorities, such as new equipment or new technology. Other funding 
shortfalls occur when the services subsequently identify additional 
maintenance requirements that were not planned in the budget request. 
Army officials expressed concerns that operation and maintenance 
funding to sustain these aging equipment items in the future may not be 
sufficient to cover the costs of retaining these items in the inventory 
longer than expected.

Wartime Capability:

Although there were some limited capabilities, according to service 
officials, the equipment items we reviewed are generally capable of 
fulfilling their wartime missions. In general the services will always 
ensure equipment is ready to go to war, often through surges in 
maintenance and overcoming obstacles such as obsolete parts, parts 
availability, and cannibalization of other pieces of equipment. These 
officials pointed out, however, that some of these equipment items have 
capability deficiencies that could degrade their wartime performance in 
the near term. For example, only 26 out of 213 Marine Corps Assault 
Amphibian Vehicles at Camp Lejeune had been provided enhanced 
protective armor kits prior to Operation Iraqi Freedom. According to 
Marine Corps officials at Camp Lejeune, lack of the enhanced protective 
armor left the vehicles vulnerable to the large caliber ammunition used 
by the Iraqi forces. Similarly, according to Navy officials, there is 
an impending negative impact on the Navy's wartime capabilities without 
an increase in the number of available Navy EA-6B Prowler aircraft with 
upgraded capabilities. Only one of the equipment items we reviewed, the 
Marine Corps CH-46E helicopter, could not accomplish its intended 
mission because of significant degradation in its lift capacity. Marine 
Corps officials stated, however, that they were generally satisfied 
with the CH-46E performance in Operation Iraqi Freedom despite its 
lift limitations.

We are recommending that the Secretary of Defense, in conjunction with 
the Secretaries of the military services, reassess the program 
strategies for the sustainment, modernization, and recapitalization of 
key legacy equipment items, and reconcile funding requests for these 
equipment items to ensure that the equipment will be adequately 
sustained until replacement equipment items can be fielded. In 
reconciling these program strategies to funding requests, the Secretary 
of Defense should highlight for the Congress the risks involved in 
sustaining key legacy equipment items if adequate funding support is 
not requested and the steps the department is taking to address those 
risks. As part of this process, the Secretary of Defense should 
identify the key equipment items that, because of impaired conditions 
and their importance to meeting the department's military strategy, 
should be given the highest priority for sustainment, recapitalization, 
or replacement. To strengthen congressional oversight of the 
department's major equipment programs, we are also suggesting that the 
Congress may wish to consider having the Secretary of Defense provide 
an annual report, in conjunction with the department's annual budget 
submissions, on the condition, program strategy, and funding for major 
equipment items.

In written comments on a draft of this report, the Department of 
Defense partially concurred with our recommendation that it should 
reassess the program strategies for equipment modernization and 
recapitalization, and reconcile those strategies to the services' 
funding requests. However, the department did not concur with our other 
two recommendations that it should (1) highlight for the Congress the 
risks involved in sustaining key equipment items if adequate funding 
support is not requested and the steps the department is taking to 
address those risks, and (2) identify the equipment items that should 
be given the highest priority for sustainment, recapitalization, 
modernization, or replacement. Specifically, the department stated that 
its current budget processes and its annual budget submission to the 
Congress are already designed to identify, at the corporate Department 
of Defense level, the department's highest funding priorities. While we 
recognize that the budget process is designed to identify the 
department's highest funding priorities, the budget information 
presented to the Congress does not identify the trade-offs and risks 
associated with the department's budgeting decisions. Therefore, we 
continue to believe that the Congress needs to be better informed of 
specific equipment condition deficiencies, the long-range strategies 
and required funding to address those deficiencies, and the risks 
associated with not adequately funding specific equipment modernization 
and recapitalization requirements. This report, for example, 
specifically identifies significant equipment condition deficiencies 
that were not adequately reflected in the department's budget 
documents, and a lack of specific program strategies and funding plans 
to address those deficiencies.

The department also noted in its written comments that our report 
identifies the CH-47D, CH-46E, KC-135, E/A-6B, Standard Missile-2, and 
the Tomahawk Missile as equipment items with problems and issues that 
warrant action within the next 1 to 3 years. The department stated that 
it will continue to reassess these equipment items as it goes through 
its resource allocation process. Lastly, the department provided 
technical comments related to our assessments of specific equipment 
items in appendix II. We reviewed and incorporated these technical 
comments, as appropriate.

The department's comments and our evaluation are on pages 23-25 of this 
report.

Background:

The September 2001 Quadrennial Defense Review (QDR) outlined a strategy 
to sustain and transform the military force structure that has been in 
place since the mid-1990s.[Footnote 10] In this review, the Department 
of Defense (DOD) committed to selectively recapitalize older equipment 
items to meet near-term challenges and to provide near-term readiness. 
DOD recognized that the older equipment items critical to DOD's ability 
to defeat current threats must be sustained as transformation occurs. 
DOD also recognizes that recapitalization of all elements of U.S. 
forces since the end of the Cold War has been delayed for too 
long.[Footnote 11] DOD procured few replacement equipment items as the 
force aged throughout the 1990s, but it recognizes that the force 
structure will eventually become operationally and technologically 
obsolete without a significant increase in resources that are devoted 
to the recapitalization of weapons systems.

The annual Future Years Defense Plan (FYDP) contains DOD's plans for 
future programs and priorities. It presents DOD estimates of future 
funding needs based on specific programs. Through the FYDP, DOD 
projects costs for each element of those programs through a period of 
either 5 or 6 years on the basis of proposals made by each of the 
military services and the policy choices made by the current 
administration. The 2003 FYDP extends from fiscal year 2003 to fiscal 
year 2007, and the 2004 FYDP extends from fiscal year 2004 to fiscal 
year 2009. Congress has expressed concerns that the military 
modernization budget and funding levels envisioned in the FYDP appear 
to be inadequate to replace aging equipment and incorporate cutting-
edge technologies into the force at the pace required by the QDR and 
its underlying military strategy.

Overall Condition of Selected Equipment Items Varies Widely:

As shown in table 1, of the 25 equipment items we reviewed, we assessed 
the current condition of 3 of these equipment items as red, 11 as 
yellow, and 10 as green. We were not able to obtain adequate data to 
assess the condition for the Marine Corps Maverick Missile because the 
Marine Corps does not track readiness trend data, such as mission 
capable or operational readiness rates, for munitions as they do for 
aircraft or other equipment.

Rotary wing lift helicopters, specifically the CH-46E and the CH-47D 
helicopters, had the lowest condition rating among the equipment items 
we reviewed, followed by fixed wing aircraft. Although we assessed the 
condition as green for several equipment items such as the Army's 
Abrams tank and the Heavy Expanded Mobility Tactical Truck, and the 
Marine Corps Light Armored Vehicle-Command and Control Variant, we 
identified various problems and issues that could potentially worsen 
the condition of some equipment items in the near future if not 
attended to. Specifically, for the Abrams tank, and similarly for the 
Heavy Expanded Mobility Tactical Truck, Army officials cited supply and 
maintenance challenges at the unit level such as repair parts 
shortages, inadequate test equipment, and lack of trained technicians 
that could impact the tank's condition in the near future. While the 
Marine Corps has a Light Armored Vehicle-Command and Control Variant 
upgrade program under way, Marine Corps officials caution that any 
delays in the upgrade program could affect future readiness. According 
to service officials and prior GAO reports, the services are currently 
able to alleviate the effects of these problems, in many cases, through 
increased maintenance hours and cannibalization of parts from other 
equipment.[Footnote 12]

The military services use a number of metrics to measure equipment 
condition. Examples include mission capable rates for aircraft, 
operational readiness rates for equipment other than aircraft,[Footnote 
13] average age, and utilization rates (e.g., flying hours). The 
equipment items we assessed as red did not meet mission capable or 
operational readiness goals for sustained periods, were older equipment 
items, and/or had high utilization rates. For example, 10 of 16 
equipment items for which readiness data were available did not meet 
mission capable or operational readiness goals for extended periods 
from fiscal year 1998 through fiscal year 2002. The average age of 21 
of the equipment items ranged from about 1 year to 43 years.[Footnote 
14]

Some equipment items for which we assessed the condition as yellow 
also failed to meet mission capable or operational readiness goals and 
were more than 10 years old. However, offsetting factors, such as how 
frequently the equipment items did not meet readiness goals or by 
what percentage they missed the goals, indicated less severe and urgent 
problems than items we assessed as red. Other equipment items may have 
had high mission capable rates, but because of overall age and related 
corrosion problems, we assessed these equipment items as yellow to 
highlight the fact that these items could potentially present problems 
if not attended to within the next 3-5 years.

The equipment items for which we assessed the condition as green 
generally met mission capable and operational readiness goals. While 
three of these equipment items--the Army Heavy Expanded Mobility 
Tactical Truck, the Air Force F-16, and the Marine Corps Light Armored 
Vehicle-Command and Control Variant--did not meet mission capable or 
operational readiness goals, we assessed the condition as green because 
the condition problems identified were less severe than the items we 
assessed as red or yellow. For example, an equipment item may have been 
slightly below the goal but only for non-deployed units, or the fleet-
wide goals may have been met for the equipment item overall, although 
the specific model we reviewed did not meet the goals. In addition, 
although the rates for an equipment item may be slightly below its 
goal, it may be able to meet operational requirements. We also 
considered any upgrades that were underway at the time of our review 
that would extend the service life of the equipment.

Maintenance problems were most often cited by the Army and Marine Corps 
officials we met with as the cause for equipment condition deficiencies 
for the equipment items we reviewed. Equipment operators and 
maintainers that we met with believed equipment degradation was the 
result of maintenance problems in one of two categories--parts or 
personnel. The parts problems include availability of parts or 
logistics and supply system problems. Availability problems occur when 
there are parts shortages, unreliable parts, or obsolete parts due to 
the advanced age of the equipment items. Logistics and supply system 
problems occur when it takes a long time to order parts or the unit 
requesting the parts has a low priority. In June, July, and August of 
2003, we issued six reports highlighting deficiencies in DOD's and the 
services' management of critical spare parts.[Footnote 15] We also 
issued a report on problems DOD and the services are having dealing 
with corrosion for military equipment and that they had not taken 
advantage of opportunities to mitigate the impact of corrosion on 
equipment.[Footnote 16] Maintenance problems due to personnel include 
(1) lack of trained and experienced technicians and (2) increases in 
maintenance man-hours required to repair some of these aging equipment 
items. We reported in April 2003, for example, that DOD has not 
adequately positioned or trained its civilian workforce at its 
industrial activities to meet future requirements.[Footnote 17] 
Consequently, the Department may continue to have difficulty 
maintaining adequate skills at its depots to meet maintenance 
requirements.

Services Have Mapped Out Long-Range Program Strategies for Sustaining 
and Modernizing Most Equipment Items but Some Gaps Exist:

In most cases, the services have developed long-range program 
strategies for sustaining and modernizing the 25 equipment items that 
we reviewed. However, some gaps exist because the services either have 
not validated their plans for the sustainment, modernization, or 
replacement of the equipment items, or the services' program strategies 
for sustaining the equipment are hampered by problems or delays in the 
fielding of replacement equipment or in the vulnerability of the 
programs to budget cuts.

The two equipment items for which we assessed the program strategy as 
red are the KC-135 Stratotanker and the Tomahawk Cruise Missile 
because, although the services may have developed long-range program 
strategies for these equipment items, they have not validated or 
updated their plans for sustaining, modernizing, or replacing these 
items. In the case of the KC-135 Stratotanker, the Air Force has 
embarked on a controversial, expensive program to replace the tanker 
fleet, but as we have reported,[Footnote 18] it has not demonstrated 
the urgency of acquiring replacement aircraft and it has not defined 
the requirements for the number of aircraft that will be needed. 
Similarly, for the Tomahawk missile, the Navy has not identified how 
many of these missiles it will need in the future, thereby 
significantly delaying the acquisition process.

We assessed the program strategy for eight of the services' program 
strategies as yellow, some of them because they will be affected by 
delays in the fielding of equipment to replace the items in our review. 
According to service officials, as the delivery of new replacement 
equipment items is delayed, the services must continue using the older 
equipment items to meet mission requirements. Consequently, the 
services may incur increased costs due to maintenance that was not 
programmed for equipment retained in inventory beyond the estimated 
service life. For example, the planned replacement equipment for the 
Marine Corps CH-46E helicopter (i.e., the MV-22 Osprey) has been 
delayed by about 3 years and is not scheduled to be fielded until 2007. 
DOD has also reportedly cut the number of replacement aircraft it plans 
to purchase by about 8 to 10 over the next few years, thus the Marine 
Corps will have to retain more CH-46E helicopters in its inventory. 
Program management officials have requested additional funds to repair 
airframe cracks, replace seats, and move to light-weight armor to 
reduce aircraft weight, engine overhauls, and avionics upgrades to keep 
the aircraft safe and reliable until fielding of the replacement 
equipment. According to Marine Corps officials, the CH-46E program 
strategy has also been hampered by the 5-year rule,[Footnote 19] which 
limits installation of new modifications other than safety 
modifications into the aircraft unless 5 years of service are left on 
the aircraft. Procurement of the replacement equipment for the Marine 
Corps' Assault Amphibian Vehicle has also been delayed (by 2 years), 
and it is not scheduled for full fielding until 2012. The program 
strategy for the Assault Amphibian Vehicle includes upgrades, but for 
only 680 of the 1,057 vehicles in the inventory.[Footnote 20]

We also assessed the program strategy for some equipment items as 
yellow if they were vulnerable to budget cuts. For example, according 
to Navy officials, the Navy frigates' modernization program is 
susceptible to budget cuts because the frigates' future role is 
uncertain as the Littoral Combat ship is developed. In addition, the 
program strategy for the frigates is questionable because of the 
uncertainty about the role frigates will play. Specifically, Navy 
frigates are increasingly used for homeland defense missions, and their 
program strategy has not been updated to reflect that they will be used 
more often and in different ways. The Army's CH-47D helicopter is also 
vulnerable to budget cuts. The Army plans to upgrade 279 CH-47D 
helicopters to F models under its recapitalization program; the upgrade 
includes a purchase of CH-47F model helicopters planned in fiscal year 
2004. The fiscal year 2004 budget for this purchase has already been 
reduced. Program managers had also planned to purchase 16 engines, but 
funding was transferred to requests for higher priority programs.

We assessed the program strategy for the remaining 15 equipment items 
as green because the services have developed long-range program 
strategies for sustaining, modernizing, or replacing these items 
consistent with their estimated remaining service life. For example, 
the Army has developed program strategies for all tracked and wheeled 
vehicles in our sample. Likewise, the Air Force has developed program 
strategies for most fixed wing aircraft in our sample throughout the 
FYDP. In the case of munitions, with the exception of the Navy Tomahawk 
Cruise Missile and Standard Missile-2, the services have developed 
program strategies for sustaining and modernizing the current missile 
inventory in our sample.

Requested Funding Does Not Reflect the Services' Long-Range 
Program Strategies:

In many cases, the funding DOD has requested or is projecting for 
future years in the FYDP for the equipment items we reviewed does not 
reflect the military services' long-range program strategies for 
equipment sustainment, modernization, or recapitalization. According 
to service officials, the services submit their budgets to DOD and the 
Department has the authority to increase or decrease the service 
budgets based upon the perceived highest priority needs. According to 
DOD officials, for future years' funding, the FYDP strikes a balance 
between future investment and program risk, taking into consideration 
the services' stated requirements as approved by DOD. As shown in table 
1, we assessed the funding for 15 of the 25 equipment items as red or 
yellow because the department's requested funding did not adequately 
reflect its long-range program strategies for modernization, 
maintenance, and spare parts.[Footnote 21] For example, as shown in 
table 2, we identified fiscal year 2003 unfunded requirements totaling 
$372.9 million for four major aircraft equipment items we reviewed.

Table 2: Unfunded Requirements for Selected Aircraft Equipment Items, 
Fiscal Year 2003:

Dollars in millions: 

CH-47D Transport Helicopter; $316.0.

F-16 Fighter Aircraft; 13.5.

C-5 Transport Aircraft; 39.4.

CH-46E Transport Helicopter; 4.0.

Total: $372.9.

Source: GAO analysis.

[End of table]

The most significant funding shortfalls occurred when parts, equipment 
upgrades, and maintenance were not fully funded or when replacement 
equipment items were not fielded as scheduled. The equipment items for 
which we assessed the funding as yellow had funding shortfalls of a 
lesser extent than the red items. Although we assessed the funding as 
green for the remaining nine equipment items, program managers raised 
concerns about the availability of operation and maintenance funds in 
future years, and stated that insufficient operation and maintenance 
funds could potentially result in more severe condition problems and 
increased future maintenance costs.

According to service officials, funding shortfalls occurred when parts, 
equipment upgrades, or maintenance were not fully funded or funds were 
reduced to support higher priority service needs. As we have previously 
reported, DOD increases or decreases funds appropriated by Congress as 
funding priorities change.[Footnote 22] Other shortfalls occur when 
units subsequently identify maintenance requirements that were not 
programmed into the original budget requests. In addition, when 
replacement equipment items are not fielded as scheduled, the services 
must continue to maintain these aging equipment items for longer than 
anticipated. Equipment items considered legacy systems[Footnote 23] 
such as the Marine Corps CH-46E helicopter may not receive funding on 
the basis of anticipated fielding of replacement equipment in the near 
future. The gaps between funding for legacy systems (which are heavily 
used and critical to the services' mission) and funding for future 
replacement equipment result when fielding of the new equipment has 
been delayed and budgets have been reduced for maintenance of legacy 
systems. Funding for these legacy systems may also be a target for 
funding reductions to support higher service priority items.

According to the program managers for some of the equipment items we 
reviewed (including the Army Abrams tank, Heavy Expanded Mobility 
Tactical Truck, and Navy EA-6B Prowler), as the services retain aging 
equipment in their inventories longer than expected, maintenance 
requirements increase, thus increasing operation and maintenance costs. 
Program managers raised concerns about the availability of sufficient 
operation and maintenance funding to sustain these aging equipment 
items in the future. Also, program managers stated that present 
sustainment funds (i.e., operation and maintenance funds) may only 
cover a small percentage of the equipment's requirements, and they 
frequently rely on procurement funds to subsidize equipment 
improvements common to multiple equipment items.[Footnote 24] However, 
once production of the equipment item has been completed and 
procurement funds are no longer available for use, program managers 
must compete with the rest of the service for limited operation and 
maintenance funds. Program managers expressed concerns that operation 
and maintenance funds are not currently available to fund equipment 
improvements and noted operation and maintenance funds may not be 
available in the future.

Equipment Is Generally Capable of Fulfilling Wartime Missions despite 
Some Limitations:

Based on our analysis of equipment condition, the performance of the 
equipment items in recent military conflicts, and discussions with 
service officials, program managers, and equipment operators and 
maintainers, we found that most of the equipment items we reviewed are 
capable of fulfilling their wartime missions despite some limitations. 
In general, the services will always ensure equipment is ready to go to 
war, often through surges in maintenance and overcoming obstacles such 
as obsolete parts, parts availability, and cannibalization of other 
pieces of equipment. Some of these equipment items (such as the Marine 
Corps CH-46E helicopter and all Air Force aircraft except the B-2) were 
used in Operation Desert Storm and have been used in other diverse 
operations such as those in Kosovo and Afghanistan. With the exception 
of the Army Stryker and GMLRS, all of the equipment items we reviewed 
were used recently in Operation Iraqi Freedom.

The services, in general, ensure that equipment is ready for deployment 
by surging maintenance operations when necessary. Only one equipment 
item, the Marine Corps CH-46E helicopter, could not accomplish its 
intended wartime mission due to lift limitations. However, Marine Corps 
officials stated that they were generally satisfied that the CH-46E met 
its mission in Operation Iraqi Freedom despite these limitations. Of 
the remaining equipment items we reviewed, including all Air Force 
fixed-wing aircraft, all tracked and wheeled vehicles, and most 
munitions, service officials believe that most of these items are 
capable of fulfilling their wartime missions.

According to service officials and program managers, while final 
Operation Iraqi Freedom after action reports were not available at the 
time of our review, initial reports and preliminary observations have 
generally been favorable for the equipment items we reviewed. However, 
these officials identified a number of specific concerns for some of 
these equipment items that limit their wartime capabilities to varying 
degrees. For example, only 26 out of 213 Marine Corps Assault Amphibian 
Vehicles at Camp Lejeune had been provided enhanced protective armor 
kits prior to Operation Iraqi Freedom. According to Marine Corps 
officials at Camp Lejeune, lack of the enhanced protective armor left 
the vehicles vulnerable to the large caliber ammunition used by the 
Iraqi forces. According to Navy officials, warfighting capabilities of 
the Navy EA-6B Prowler aircraft will be degraded if their capabilities 
are not upgraded and the outer wing panels are not replaced. Fleet 
commanders expressed concerns about potentially deploying some ships we 
reviewed with only one of three weapons systems capable of being used. 
However, program managers stated that plans were in place to reduce the 
vulnerability of these ships by fielding two compensating weapons 
systems.

Conclusions:

Although the military services are generally able to maintain military 
equipment to meet wartime requirements, the ability to do so over the 
next several years is questionable especially for legacy equipment 
items. Because program strategies have not been validated or updated 
and funding requests do not reflect the services' long-range program 
strategies, maintaining this current equipment while transforming to a 
new force structure as well as funding current military operations in 
Iraq and elsewhere will be a major challenge for the department and the 
services. We do not believe, however, that the funding gaps we 
identified are necessarily an indication that the department needs 
additional funding. Rather, we believe that the funding gaps are an 
indication that funding priorities need to be more clearly linked to 
capability needs and to long-range program strategies.

The military services will always need to meet mission requirements and 
to keep their equipment ready to fulfill their wartime missions. 
However, this state of constant readiness comes at a cost. The 
equipment items we reviewed appear to have generally fulfilled wartime 
missions, but often through increased maintenance for deployed 
equipment and other extraordinary efforts to overcome obstacles such as 
obsolete parts, parts availability, and cannibalization of other pieces 
of equipment. The reported metrics may not accurately reflect the time 
needed to sustain and maintain equipment to fulfill wartime missions. 
Substantial equipment upgrades or overhauls may be required to sustain 
older equipment items until replacement equipment items arrive.

Recommendations for Executive Action:

While our review was limited to 25 equipment items and represents a 
snapshot at a particular point in time, the department should reassess 
its current processes for reviewing the condition, program strategy, 
and funding for key legacy equipment items. Specifically we recommend 
that the Secretary of Defense, in conjunction with the Secretaries of 
the Army, Air Force, and the Navy, reassess the program strategies for 
equipment modernization and recapitalization, and reconcile those 
strategies with the services' funding requests to ensure that key 
legacy equipment, especially those items needed to meet the strategy 
outlined in the September 2001 Quadrennial Defense Review, are 
sustained until replacement equipment items can be fielded. In 
reconciling these program strategies to funding requests, the Secretary 
of Defense should highlight for the Congress, in conjunction with the 
department's fiscal year 2005 budget submissions, the risks involved in 
sustaining key equipment items if adequate funding support is not 
requested and the steps the department is taking to address those 
risks. As part of this process the department should identify the key 
equipment items that, because of impaired conditions and their 
importance to meeting the department's military strategy, should be 
given the highest priority for sustainment, recapitalization, 
modernization, or replacement.

Matter for Congressional Consideration:

If the Congress wants a better understanding of the condition of major 
equipment items, the department's strategy to maintain or recapitalize 
these equipment items, and the associated funding requirements for 
certain key military equipment needed to meet the strategy outlined in 
the QDR, the Congress may wish to consider having the Secretary of 
Defense provide an annual report, in conjunction with its annual budget 
submissions, on (1) the extent to which key legacy equipment items, 
particularly those that are in a degraded condition, are being funded 
and sustained until replacement equipment items can be fielded; (2) the 
risks involved in sustaining key equipment items if adequate funding 
support is not requested; and (3) the steps the department is taking to 
address those risks.

Agency Comments and Our Evaluation:

In written comments on a draft of this report, the Department of 
Defense partially concurred with our recommendation that it should 
reassess the program strategies for equipment modernization and 
recapitalization, and reconcile those strategies to the services' 
funding requests. However, the department did not concur with our other 
two recommendations that it should (1) highlight for the Congress the 
risks involved in sustaining key equipment items if adequate funding 
support is not requested and the steps the department is taking to 
address those risks, and (2) identify the equipment items that should 
be given the highest priority for sustainment, recapitalization, 
modernization, or replacement. The department's written comments are 
reprinted in their entirety in appendix III.

In partially concurring with our first recommendation that it should 
reassess the program strategies for equipment modernization and 
recapitalization, and reconcile those strategies to the services' 
funding requests, the department agreed that, while the overall 
strategy outlined in the September 2001 Quadrennial Defense Review may 
be unchanged, events over time may dictate changes in individual 
program strategies, that requires an order to meet the most current 
threat. The department stated, however, that through its past Planning, 
Programming, and Budgeting System and the more current Planning, 
Programming, Budgeting, and Execution processes, the department had and 
continues to have an annual procedure to reassess program strategies to 
ensure equipment maintenance, modernization, and recapitalization 
funding supports the most recent Defense strategy. While we acknowledge 
that these budget processes may provide a corporate, department-level 
review of what is needed to accomplish the national defense mission, 
the department's budget and the information it provides to the Congress 
do not clearly identify the funding priorities for individual equipment 
items. For example, although the funding to sustain the department's 
major equipment items is included in its Operation and Maintenance 
budget accounts, these budget accounts do not specifically identify 
funding for individual equipment items. We continue to believe that the 
department, in conjunction with the military services, needs to develop 
a more comprehensive and transparent approach for assessing the 
condition of key legacy equipment items, developing program strategies 
to address critical equipment condition deficiencies, and prioritizing 
the required funding.

The department did not concur with our second recommendation that, in 
reconciling the program strategies to funding requests, it should 
highlight for the Congress, in conjunction with its fiscal year 2005 
budget submissions, the risks involved in sustaining key equipment 
items if adequate funding support is not requested and the steps the 
department is taking to address those risks. Specifically, the 
department stated that its budget processes and the annual Defense 
budget provide the Congress a balanced program with all requirements 
"adequately" funded and that the unfunded requirements identified by 
the program managers or the services may not be validated at the 
department level. While we agree that the department's budget may 
identify its highest funding priorities at the department wide level, 
it does not provide the Congress with an assessment of equipment 
condition deficiencies, unfunded requirements identified by the 
services, and the potential risks associated with not fully funding the 
services' program strategies. In this report, we identify a number of 
examples of equipment condition deficiencies and inconsistencies 
between the program strategies and the funding requests to address 
those deficiencies that were not fully addressed in the department's 
budget documents. We believe that the Congress, in its oversight of the 
department's major equipment programs, needs to be better informed of 
specific equipment condition deficiencies, the long-range strategies 
and required funding to address those deficiencies, and the risks 
associated with not adequately funding specific equipment modernization 
and recapitalization requirements.

The department also did not concur with our recommendation that it 
should identify for the Congress the key equipment items that, because 
of impaired condition and their importance to meeting the department's 
military strategies, should be given the highest priority for 
sustainment, recapitalization, modernization, or replacement. In its 
comments, the department stated that, in developing the annual Defense 
budget, it has already allocated resources according to its highest 
priorities. The department further stated that key items that are vital 
to accomplishing the department's mission are allocated funding in 
order to meet the requirements of the most current Defense strategy, 
and that there is no need to restate these priorities with a list. 
Similar to our rebuttal to the department's response to our second 
recommendation as discussed above, we do not believe that the 
department's annual budget provides the Congress with sufficient 
information on the most severe equipment condition deficiencies and the 
funding priorities for addressing those deficiencies. We believe that a 
separate analysis, in conjunction with the department's budget 
submissions, that highlights the most critical equipment condition 
deficiencies, the planned program strategies for addressing those 
deficiencies, and the related funding priorities is needed to provide 
the Congress with the information it needs to make informed budget 
decisions.

The department also noted in its written comments that our report 
identifies the CH-47D, CH-46E, KC-135, EA-6B, Standard Missile-2, and 
the Tomahawk missile as equipment items with problems and issues that 
warrant action within the next 1 to 3 years. The department stated that 
it would continue to reassess these equipment items as it goes through 
its resource allocation process.

Lastly, the department provided technical comments concerning our 
assessments of specific equipment items in appendix II, including the 
KC-135 Stratotanker, Assault Amphibian Vehicle, MV-22, Tomahawk Cruise 
Missile, and the CH-46E Sea Knight Helicopter. We reviewed and 
incorporated these technical comments, as appropriate. The revisions 
that we made based on these technical comments did not change our 
assessments for the individual equipment items. In some cases, the data 
and information the department provided in its technical comments 
resulted from program and funding decisions that were made subsequent 
to our review.

:

We are sending copies of this report to the Secretary of Defense; the 
Secretaries of the Army, the Navy, and the Air Force; the Commandant of 
the Marine Corps; and other interested 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 [Hyperlink, http://
www.gao.gov.] h [Hyperlink, http://www.gao.gov/] ttp://www.gao.gov.

Please contact me on (202) 512-8365 if you or your staffs have any 
questions concerning this report. Major contributors to this report are 
included in appendix IV.

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

Signed by William M. Solis: 

[End of section]

Appendixes: 

Appendix I: Scope and Methodology:

To determine the level of attention required by the Department of 
Defense, the military services, and/or the Congress for each of the 
25 equipment items we reviewed, we performed an independent evaluation 
of the (1) equipments' current condition; (2) services' program 
strategies for the sustainment, modernization, or replacement of the 
equipment items; (3) current and projected funding levels for the 
equipment items in relation to the services' program strategies; and 
(4) equipments' wartime capabilities. Based on our evaluation of the 
condition, program strategy, and funding for each of the 25 equipment 
items, we used a traffic light approach--red, yellow, or green--to 
indicate the severity and urgency of problems or issues. We established 
the following criteria to assess the severity and urgency of the 
problems.

* Red indicates a problem or issue that is severe enough to warrant 
action by DOD, the military services, and/or the Congress within the 
next 1-3 years. We selected this time frame of 1-3 years because it 
represents the time frame for which DOD is currently preparing annual 
budgets.

[See PDF for image]

[End of figure]

* Yellow indicates a problem or issue that is severe enough to warrant 
action by DOD, the military services, and/or the Congress within the 
next 3-5 years. We selected this time frame of 3-5 years because it 
represents the near-term segment of DOD's Future Years Defense Plan.

[See PDF for image]

[End of figure]

* Green indicates that we did not identify any specific problems or 
issues at the time of our review, or that any existing problems or 
issues we identified are not of a severe enough nature that we believe 
warrant action by DOD, the military services, and/or the Congress 
within the next 5 years. We selected this time frame of 5 years because 
it represents the longer-term segment of DOD's Future Years Defense 
Plan.

[See PDF for image]

[End of figure]

We also reviewed the wartime capability of the selected equipment 
items, focusing on the extent to which each equipment item is capable 
of fulfilling its wartime mission. Because of ongoing operations in 
Iraq and our limited access to the deployed units and related equipment 
performance data, we were unable to obtain sufficient data to 
definitively assess the wartime capability for each of the 25 equipment 
items we reviewed, as we did for each of the other three assessment 
areas.

To select the 25 equipment items we reviewed, we worked with the 
military services and your offices to judgmentally select approximately 
two weapons equipment items, two support equipment items, and 
two munitions items from the equipment inventories of each of the 
four military services--Army, Air Force, Navy, and Marine Corps. We 
relied extensively on input from the military services and prior GAO 
work to select equipment items that have been in use for a number 
of years and are critical to supporting the services' mission. We based 
our final selections on the equipment items that the military services 
believed were most critical to their missions. The 25 equipment items 
we selected for review include 7 Army equipment items, 6 Air Force 
equipment items, 7 Navy equipment items, and 5 Marine Corps equipment 
items. Our assessments apply only to the 25 equipment items we 
reviewed, and the results of our assessments cannot be projected to the 
entire inventory of DOD equipment.

To assess equipment condition, we obtained and analyzed data on 
equipment age, expected service life, and the services' equipment 
condition and performance indicators such as mission capable rates, 
operational readiness rates, utilization rates, failure rates, 
cannibalization rates, and depot maintenance data for each of the 
equipment items we reviewed. The specific data that we obtained and 
analyzed for each equipment item varied depending on the type of 
equipment and the extent to which the data were available. The scope of 
our data collection for each of the equipment items included both the 
active and reserve forces. We also met with the services' program 
managers and other cognizant officials from each of the four military 
services for each of the 25 equipment items. In addition, we visited 
selected units and maintenance facilities to observe the equipment 
during operation or during maintenance and to discuss equipment 
condition and wartime capability issues with equipment operators and 
maintainers. Our observations and assessments were limited to equipment 
in the active duty inventory.

To assess the program strategy for these equipment items, we reviewed 
the services' plans for future sustainment, modernization, 
recapitalization, or replacement of the equipment items in order to 
meet the services' mission and force structure requirements. We met 
with the services' program managers and other military service 
officials to discuss and assess the extent to which the services have a 
strategy or roadmap for each of the 25 equipment items, and whether the 
program strategy is adequately reflected in DOD's current budget or the 
Future Years Defense Plan.

To assess equipment funding, we obtained and analyzed data on 
historical, current, and future years' budget requests for each of the 
25 equipment items we reviewed. We also reviewed the services' budget 
requests, appropriations, and obligations for fiscal year 1998 through 
fiscal year 2003 to determine how the funds that had been requested and 
appropriated for each of the equipment items were used. In addition, we 
reviewed the Future Years Defense Program for fiscal year 2003 to 
fiscal year 2007 and for fiscal year 2004 to fiscal year 2008 to 
determine if the projected funding levels were consistent with the 
services' program strategies for sustainment, modernization, 
recapitalization, or replacement of the selected equipment items. We 
also met with the services' program managers for each of the 
25 equipment items to identify budget shortfalls and unfunded 
requirements. We did not independently validate the services' 
requirements. We were unable, however, to obtain specific information 
from the Office of the Secretary of Defense or the Joint Staff on the 
long-term program strategies and funding priorities for these equipment 
items because officials in these offices considered this information to 
be internal DOD data and would not make it available to us.

To review the wartime capability of each equipment item, we discussed 
with military service officials, program managers, and equipment 
operators and maintainers the capabilities of the equipment items to 
fulfill their wartime missions and the equipments' performance in 
recent military operations. Because of ongoing operations in Iraq and 
our limited access to the deployed units and related equipment 
performance data, we were unable to collect sufficient data to 
definitively assess wartime capability or to assign a color-coded 
assessment as we did with the other three assessment areas. We also 
reviewed related Defense reports, such as after action reports and 
lessons learned reports, from recent military operations to identify 
issues or concerns regarding the equipments' wartime capabilities.

We performed our work at relevant military major commands, selected 
units and maintenance facilities, and one selected defense combatant 
command. Our access to specific combatant commands and military units 
was somewhat limited due to their involvement in Operation Iraqi 
Freedom. The specific military activities that we visited or obtained 
information from include the following:

* U.S. Army, Headquarters, Washington, D.C.;

* U.S. Army, Office of the Assistant Secretary of the Army for 
Acquisitions, Logistics, and Technology, Washington, D.C.;

* U.S. Army Forces Command Headquarters, Atlanta, Ga.;

* U.S. Army, 1st Calvary Division, 118th Corps, Ft. Hood, Tx.;

* U.S. Army, Aviation and Missile Command, Redstone Arsenal, Precision 
Fire and Missile Project Office, Huntsville, Al.;

* U.S. Army, Tank and Armament Automotive Command, Warren, Mi.;

* U.S. Army, Cost and Economic Analysis Center, Pentagon, 
Washington, D.C.;

* U.S. Army, Pacific, Ft. Shafter, Hawaii; and:

* U.S. Army, 25th Infantry Division (Light), Schofield Barracks, 
Hawaii;

* U.S. Air Force, Headquarters, Plans and Programs Division, 
Washington, D.C.;

* U.S. Air Force, Combat Forces Division, and Global Mobility Division, 
Washington, D.C.;

* U.S. Air Force, Munitions Missile and Space Plans and Policy 
Division, Washington, D.C.;

* U.S. Air Force, Air Logistics Center, Robins Air Force Base, Ga.;

* U.S. Air Force, Air Combat Command, Directorate of Requirements and 
Plans, Aircraft Division, and the Installation and Logistics Division, 
Langley Air Force Base, Va.;

* U.S. Air Force, Pacific, Hickam Air Force Base, Hawaii;

* U.S. Navy, Naval Surface Forces, Atlantic Fleet, Norfolk Naval Base, 
Va.;

* U.S. Navy, Naval Air Force, Atlantic Fleet, Norfolk Naval Base, Va.;

* U.S. Navy, Naval Weapons Station Yorktown, Va.;

* U.S. Navy, Naval Surface Forces, Pacific Fleet, Pearl Harbor, Hawaii;

* U.S. Navy, Naval Surface Forces, Pacific Fleet, Naval Amphibious 
Base, Coronado, Calif.;

* U.S. Navy, Naval Air Forces, Naval Air Station North Island, 
Coronado, Calif.;

* U.S. Navy, Naval Weapons Station Seal Beach, Calif.;

* U.S. Navy, Electronic Attack Wing, U.S. Pacific Fleet, Naval Air 
Station Whidbey Island, Wash.;

* U.S. Navy, Naval Sea Systems Command, Washington Navy Yard, 
Washington, D.C.;

* U.S. Navy, Naval Air Systems Command, Naval Air Station 
Patuxent River, Md.;

* U.S. Navy, Naval Air Depot, Naval Air Station North Island, Calif.; 
and:

* U.S. Navy, Avondale Shipyard, Avondale, La.;

* U.S. Marine Corps, Systems Command, Quantico, Va.;

* U.S. Marine Corps, Aviation Weapons Branch, Pentagon, Washington, 
D.C.;

* U.S. Marine Corps, Tank Automotive and Armaments Command, 
Warren, Mich.;

* U.S. Marine Corps, I Marine Expeditionary Force, Camp Pendleton, 
Calif.;

* U.S. Marine Corps, II Marine Expeditionary Force, Camp Lejeune, N.C.;

* U.S. Marine Corps, Naval Research Lab, Washington, D.C.;

* U.S. Marine Corps, AAAV Technology Center, Woodbridge, Va.; and:

* U.S. Marine Corps, Marine Forces Pacific, Camp Smith, Hawaii.

We also obtained and reviewed relevant documents and reports from DOD 
and the Congressional Budget Office, and relied on related prior GAO 
reports. We performed our review from September 2002 through October 
2003 in accordance with generally accepted government auditing 
standards.

[End of section]

Appendix II: Assessments of Selected Equipment Items:

For the 25 equipment items, each assessment provides a snapshot in time 
of the status of the equipment item at the time of our review. The 
profile presents a general description of the equipment item. Each 
assessment area contains a highlighted area indicating the level of 
DOD, military service, and/or congressional attention each equipment 
item needs, in our opinion, based on our observations of each equipment 
item, discussions with service officials, and reviews of service-
provided metrics.

Army:

Abrams Tank:

First delivered in the early 1980s, the Abrams is the Army's main 
battle tank and destroys enemy forces using enhanced mobility and 
firepower. Variants of the Abrams include the M1, M1A1, and M1A2. The 
M1 has a 105mm main gun; the M1A1 and M1A2 have a 120 mm gun, combined 
with a powerful turbine engine and special armor. There are 5,848 tanks 
in the inventory, and the estimated average age is 14 years. The M1 
variant will be phased out by 2015. The M1 and M1A2 variant are being 
upgraded to the M1A2 Systems Enhancement Program (SEP) by July 2004.

Figure 1: Abrams Tank:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the Abrams Tank as green because it 
consistently met its mission capable goal of 90 percent from fiscal 
year 1998 through fiscal year 2002. Although the Abrams met its mission 
capable goal, supply and maintenance operations at the unit-level are a 
challenge because of repair parts shortages, unreliable components, 
inadequate test equipment, and lack of trained technicians. There are 
concerns that the future condition of the Abrams could deteriorate in 
the next 5 years due to insufficient sustainment funds. The lack of 
funds could result in an increase of aging tanks and maintenance 
requirements.

Program Strategy: 

We assessed the program strategy for the Abrams as green because the 
Army has developed a long-term strategy for upgrading and phasing 
out certain variants of aging tanks in its inventory. The Army's 
Recapitalization Program selectively implements new technology 
upgrades to reduce operations and support cost. Additionally, the Army 
is phasing out the M1A2 from its inventory by 2009, and procuring 588 
M1A2 SEPS. The SEP enhances the digital command and control 
capabilities of the tank. The Army also developed a program for 
improving the Abrams M1A2 electronics called the Continuous Electronic 
Evolution Program, which is part of the SEP. The first phase of this 
program has been approved and funded. According to an Army official, 
the next phase is expected to start in approximately 5 years.

Funding: 

We assessed the funding for the Abrams as yellow because current and 
projected funding is not consistent with the Army's stated requirements 
to sustain and modernize the Abrams tank inventory. The Army reduced 
the recapitalization budget by more than 50 percent for the M1A2 SEP, 
thereby decreasing the number of upgrades from 1,174 to 588. Unfunded 
requirements for the Abrams tank include the vehicle integrated defense 
systems, safety and environmental fixes, and an improved driver's 
viewer system. Without adequate funding, obsolescence may become a 
major issue once tank production ends and procurement funds are no 
longer available to subsidize tank requirements. Procurement funding 
for the M1A2 SEP will be completed by 2003 and deliveries completed by 
2004. According to an Army official, the Abrams procurement funding 
provides approximately 75 percent to 80 percent of the tank 
requirements due to commonality among the systems.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the Abrams, a detailed pre-war assessment 
prepared by the program manager's office indicated that the tank is not 
ready or able to sustain a long-term war. During Operation Iraqi 
Freedom, the Abrams tank was able to successfully maneuver, provide 
firepower, and protect the crew. Losses were attributed to mechanical 
breakdown and cannibalization. The detailed assessment by the program 
manager's office, however, indicated that limited funding, war reserve 
spare part shortages, and supply availability could impact the tank's 
ability to sustain a long-term war.

AH-64A/D Apache Helicopter:

The Apache is a multi-mission aircraft designed to perform rear, close, 
deep operations and precision strikes, armed reconnaissance and 
security during day, night, and adverse weather conditions. There 
are approximately 728 Apache helicopters in the Army's inventory--418 
AH-64A models and 310 AH-64D models. The fleet average age is about 
12 years.

Figure 2: AH-64A/D Apache Helicopter:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the Apache as yellow because the Apache 
AH-64D model failed to meet the mission capable goal of 75 percent 
approximately 50 percent of the time, from fiscal year 1999 through 
fiscal year 2002; however, according to officials, the Apache mission 
capable rates have consistently exceeded the 75 percent goal in 
calendar year 2003. Aviation safety restrictions were cited as the 
reason why the Apache failed to meet mission capable goals. A safety 
restriction pertains to any defect or hazardous condition that can 
cause personal injury, death, or damage to the aircraft, components, or 
repair parts for which a medium to high safety risk has been 
determined. These restrictions included problems with the (1) aircraft 
Teflon bushings, (2) transmission, (3) main rotor blade attaching pins, 
(4) generator power cables, and (5) the removal, maintenance and 
inspection of the Auxiliary Power Unit Takeoff Clutch. The Army's 
Recapitalization Program includes modifications that are intended to 
address these safety restrictions.

Program Strategy: 

We assessed the program strategy for the Apache as green because the 
Army has developed a long-term program strategy to sustain and upgrade 
the aging Apache fleet. The Army's Recapitalization Program addresses 
costs, reliability, and safety problems, fleet groundings, aging 
aircraft, and obsolescence. The Army plans to remanufacture 501 AH-64A 
helicopters to the AH-64D configuration. The goal is to reduce the 
fleet average age to 10 years by 2010, increase the unscheduled mean 
time between removal by 20 percent for selected components, and 
generate a 20 percent return on investment for the top 10 cost drivers. 
The Army is on-schedule for fielding the Apache AH-64D.

Funding: 

We assessed the funding for the Apache as green because current and 
projected funding is consistent with the Army's stated requirements for 
sustaining and upgrading the Apache fleet. The Apache program is fully 
funded through fiscal year 2005 at a total cost of $6.7 billion. The 
funding supports remanufacturing and upgrading 501 Apache AH-64A to the 
newer Longbow Apache AH-64D aircraft, as well as funding other 
reliability and safety issues. The Army has expended $3.6 billion to 
convert 284 A models to D models from fiscal year 1996 through fiscal 
year 2001. The other $3.1 billion supports upgrading the remaining 217 
A models to address reliability and safety issues, procuring Detection 
Systems, and procuring Internal Auxiliary Fuel System/Ammo Flat Pack 
for the Apache fleet. The Army has not made a decision to fund 
modifications needed in fiscal year 2005 through fiscal year 2012, 
which is estimated to cost approximately $3.4 billion:

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the Apache, Army officials did not identify any 
specific concerns. These officials indicated that the Apache 
successfully fulfilled its wartime missions in Afghanistan and 
Operation Iraqi Freedom. In Operation Iraqi Freedom, the AH-64D 
conducted combat operations for both close combat and standoff 
engagements. Every mission assigned was flown and accomplished with the 
Apache AH-64D. The Longbow performance has been enhanced by targeting 
and weapon systems upgrades that have improved the Longbow performance 
over the AH-64A.

Stryker:

The Stryker is a highly deployable-wheeled armored vehicle that employs 
10 variations--the Infantry Carrier Vehicle (ICV), Mortar Carrier (MC), 
Reconnaissance Vehicle (RV), Commander Vehicle (CV), Medical Evacuation 
Vehicle (MEV), Engineer Squad Vehicle (ESV), Anti-Tank Guided Missile 
Vehicle (ATGM), and Fire Support Vehicle (FSV), the Mobile Gun System 
(MGS), and the Nuclear Biological and Chemical Reconnaissance Vehicle 
(NBCRV). There are 600 Stryker vehicles in the Army's inventory, and 
the average age is less than 2 years. The Army plans to procure a total 
of 2,121 Stryker vehicles through fiscal year 2008.

Figure 3: Stryker:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the Stryker as green because it has 
successfully achieved the fully mission capable goal of 95 percent, 
based on a 3-month average from April 2003 through July 2003. The 
Congress mandated that the Army compare the operational effectiveness 
and cost of an infantry carrier variant of the Stryker and a medium 
Army armored vehicle. The Army compared the cost and operational 
effectiveness of the Stryker infantry carrier against a medium armored 
vehicle. The Army selected the M113A3, and the comparison shows the 
Stryker infantry carrier vehicle is more survivable and provides better 
overall performance and mobility when employed in combat operations 
than the M113A3.

Program Strategy: 

We assessed the program strategy for the Stryker as green because the 
Army developed a long-term program strategy for procuring a total of 
2,121 vehicles through fiscal year 2008, which will satisfy the total 
requirement. Of the 600 currently in the inventory, 449 are at 2 
brigades--a 3rd brigade of the 2nd Infantry Division and the 1st 
brigade of the 25th Infantry Division, both of which are located at 
Fort Lewis, Washington. The other 151 are at fielding sites, training 
centers, and the Army Test and Evaluation Center. The remaining 1,521 
will be procured through fiscal year 2007 with expected deliveries 
through fiscal year 2008. The next brigade scheduled to receive the 
Stryker is the 172nd Infantry Brigade at Forts Richardson and 
Wainwright, Alaska. The remaining Stryker Brigades Combat Teams to be 
equipped with the Stryker are the 2nd Cavalry Regiment, Fort Polk, 
Louisiana; 2nd Brigade, 25th Infantry Division, Schofield Barracks, 
Hawaii; and 56th Brigade of the 28th Infantry Division, Pennsylvania 
Army National Guard.

Funding: 

We assessed the funding for the Stryker as green because current and 
projected funding is consistent with the Army's stated requirements to 
sustain the Stryker program. The program is fully funded to field the 
six Stryker brigade combat teams. Approximately $4.1 billion has been 
allocated for all six combat teams through fiscal year 2009. The 
Secretary of Defense has authorized the procurement of the first three 
brigades, but the fourth brigade cannot be procured until the Secretary 
of Defense solidify to Congress that the results of the Operational 
Evaluation mandated by Congress indicated that the design for the 
interim brigade combat team is operationally effective and 
operationally suitable. The evaluation was completed in May 2003 and 
results are being finalized.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the Stryker, the Army did not identify any 
specific concerns regarding the system being able to meet its wartime 
mission. The Stryker has not yet been used in any conflict situation. 
In May 2003, GAO reported that the Army Test and Evaluation Command 
concluded that the Stryker provided more advantages than the M113A3 in 
force protection, support for dismounted assault, and close fight and 
mobility, and was more survivable against ballistic and non-ballistic 
threats.

CH-47D/F Chinook Helicopter:

The CH-47 helicopter is a twin-engine, tandem rotor helicopter designed 
for transportation of cargo, troops, and weapons. The Army inventory 
consists of 426 CH-47D models and 2 CH-47F models. The CH-47F Improved 
Cargo Helicopter is a remanufactured version of the CH-47D and includes 
a new digital cockpit and a modified airframe to reduce vibration. The 
overall average age of the CH-47 is 14 years old. The Army plans to 
convert 76 D model aircraft to the F model between fiscal years 2005 
and fiscal year 2009.

Figure 4: CH-47D/F Chinook Helicopter:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the Chinook as red because it consistently 
failed to meet the Army's mission capable goal of 75 percent from 
fiscal year 1998 to fiscal year 2002. Actual mission capable rates 
ranged from 61 percent to 69 percent. Army officials attributed the 
failure to meet the 75 percent mission capable goal to aging equipment, 
supply shortages, and inexperienced technicians. Maintaining aircraft 
has become increasingly difficult with the CH-47D failing to meet the 
non-mission capable maintenance goal of 15 percent, increasing from 
27 percent in fiscal year 1998 to 31 percent in fiscal year 2002.

Program Strategy: 

We assessed the program strategy for the Chinook as yellow because the 
Army has developed a long-term strategy for upgrading and replacing the 
Chinook, but the strategy is not consistent with the Army's funding 
priorities. There has been a delay in the plan to upgrade 279 D models 
to F models between fiscal year 2003 and fiscal year 2017 under the 
Army's Recapitalization Program, reducing the number of CH-47F 
helicopters planned in the fiscal year 2004 budget by five due to 
unexpected funding constraints. These budgetary constraints also 
delayed the Army's plans to purchase 16 engines because funding was 
transferred to support other non-recurring requirements. Readiness may 
be adversely affected if these engines are not procured because unit 
requisitions for these engines will not be filled and aircraft will not 
be fully mission capable.

Funding: 

We assessed the funding for the Chinook as yellow because current and 
projected funding is not consistent with the Army's requirements for 
sustaining and upgrading the Chinook helicopter. At present, the Army 
has identified unfunded requirements totaling $316 million, with 
$77 million needed to procure the five CH-47Fs and the 16 engines for 
which the funds had been previously diverted. The remaining 
$239 million would support other improvements including common avionics 
system, rotor heads, crashworthy crew seats, and engine modifications. 
The Army will resolve some or all of these requirements with projected 
funding of $3 billion to support the CH-47 program through fiscal year 
2017.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the Chinook, Army officials indicated that it 
successfully fulfilled its wartime mission for Operation Iraqi Freedom 
despite current condition problems. These officials stated that the 
deployed units were able to overcome these condition problems because 
the deployed aircraft were provided a higher priority than non-deployed 
aircraft for spare parts. As a result, the estimated mission capable 
rates for deployed aircraft increased to about 86 percent during the 
operation.

Heavy Expanded Mobility Tactical Truck (HEMTT):

The HEMTT provides transport capabilities for re-supply of combat 
vehicles and weapon systems. The HEMTT's five basic configurations 
include the cargo truck, the load handling system, wrecker, tanker, and 
tractor. The HEMTT entered into the Army's inventory in 1982. The 
current inventory totals about 12,500 and the average age is 13 years.

Figure 5: Heavy Expanded Mobility Tactical Truck:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the HEMTT as green because mission capable 
rates have been close to the Army's 90 percent goal, averaging 
89 percent between fiscal year 1998 and fiscal year 2002. Moreover, the 
overall supply availability rates have exceeded the 85 percent goal 
from May 2002 to October 2002, averaging between 96 percent and 
99 percent, respectively. In some instances, however, meeting the 
operational goals has been continually challenging because of aging 
equipment, heavy equipment usage, and the lack of trained mechanics. 
The lack of trained mechanics may also impact the Army's future ability 
to meet the specified mission capable goals. In addition, a detailed 
pre-war assessment by the program manager's office indicated that 
concerns regarding shortages of spare parts would significantly degrade 
the HEMTT readiness rates.

Program Strategy: 

We assessed the program strategy for the HEMTT as green because the 
Army has developed a long-term program strategy for sustaining and 
modernizing the HEMTT inventory. The Army's plans include procuring 
1,485 new tankers and wreckers through fiscal year 2007, which will 
satisfy the Army's stated requirement. The Army also plans to rebuild 
some of the existing vehicles through the HEMTT Extended Service 
Program. This program, scheduled to be complete in fiscal year 2012, 
will insert technology advancements and will provide continuous 
improvements to the vehicle. Although there has been a reduction in the 
Army's budget for the Extended Service Program, the plan is to continue 
rebuilding trucks in smaller quantities and at a slower pace. The 
Army's Forces Command has implemented a Vehicle Readiness Enhancement 
Program that serves as an interim maintenance program for the HEMTT 
awaiting induction into the Extended Service Program.

Funding: 

We assessed the funding for the HEMTT as yellow because current and 
projected funding is not consistent with the Army's stated requirements 
to sustain and modernize the HEMTT inventory. Specifically, the Army 
has unfunded requirements of $10.5 million as of fiscal year 2003, of 
which $3.9 million is for spare parts and $6.6 million is for war 
reserves. In addition, the Army reduced the Recapitalization Program by 
$329 million. The Army had planned to upgrade 2,783 vehicles currently 
in the inventory; however, 1,365 will not be upgraded as a result of 
the reductions in the Recapitalization Program. Consequently, according 
to Army officials, maintenance and operating and support costs will 
likely increase.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the HEMTT, Army officials indicated that it has 
successfully fulfilled its wartime requirements during recent combat 
operations. Based on the program manager's preliminary observations, 
the HEMTT performed successfully during Operation Iraqi Freedom. A 
detailed pre-war assessment by the program manager's office indicated 
that the HEMTT was ready for war, but could experience sustainment 
problems due to a shortage of war reserve spare parts. The program 
manager's office is currently assessing the condition of the active and 
war reserve equipment used in Operation Iraqi Freedom.

Patriot Missile (PAC-3):

The PAC-3 missile is considered a major upgrade to the Patriot system. 
Sixteen PAC-3 missiles can be loaded on a launcher versus four PAC-2 
missiles. The Army plans to buy 2,200 PAC-3 missiles. The Army had a 
current inventory of 88 PAC-3 missiles as of July 2003. The average age 
of the PAC-3 missile is less than 1 year.

Figure 6: Patriot Missile:

[See PDF for image]

[End of figure]

Condition:

:

We assessed the condition of the PAC-3 missile as green because 
approximately 89 percent of the missiles in the inventory were ready 
for use as of July 2003. Specifically, of the 88 PAC-3 missiles 
currently in the inventory, 78 were ready for use and 10 were not. In 
addition, the Army has not experienced any chronic or persistent 
problems during production. The PAC-3 missile completed operational 
testing and was approved for full production of 208 missiles in 2003 
and 2004.

Program Strategy: 

We assessed the program strategy for the PAC-3 missile as green because 
the Army has developed a long-term strategy for sustaining the PAC-3 
inventory, including procurement of 2,200 missiles that will satisfy 
the total requirement. The Army plans to purchase 1,159 PAC-3 missiles 
through fiscal year 2009. The remaining 1,041 missiles will be procured 
after fiscal year 2009. During the low-rate initial production, the 
Army procured 164 PAC-3 missiles from 1998 to 2002 at $1.7 billion. The 
Army has completed the low-rate initial production and has been granted 
approval for full production of 208 PAC-3 missiles beginning in fiscal 
year 2003, at a total estimated cost of $714 million.

Funding: 

We assessed the funding for the PAC-3 missile as green primarily 
because current and projected funding is consistent with the Army's 
stated requirements to sustain the PAC-3 inventory. The program 
manager's office has not identified any funding shortfalls for the 
missile. Funding has been approved for the production of 1,159 PAC-3 
missiles through fiscal year 2009 at an average production rate of 
nearly 100 missiles per year. The total production cost of the 1,159 
PAC-3 missiles equates to $4.3 billion. The remaining 1,041 missiles 
will be procured after fiscal year 2009.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the PAC-3 missile, Army officials indicated that 
it successfully fulfilled its wartime mission during Operation Iraqi 
Freedom, successfully hitting enemy targets within two missile shots. 
The PAC-3 has also completed the operational testing phase and has been 
approved for full production.

Guided Multiple Launch Rocket System (GMLRS):

The Guided Multiple Launch Rocket System Dual Purpose Improved 
Convention Munition (GMLRS-DPICM) is an essential component of the 
Army's transformation. It upgrades the M26 series MLRS rocket and is 
expected to serve as the baseline for all future Objective Force rocket 
munitions. The Army plans to procure a total of 140,004 GMLRS rockets. 
There are currently no GMLRS rockets in inventory, but it was approved 
in March 2003 to enter low rate initial production to produce 
108 missiles.

Figure 7: Guided Multiple Launch Rocket System:

[See PDF for image]

[End of figure]

Condition:

:

We assessed the condition of the GMLRS as green because the system has 
demonstrated acceptable performance during the System Development and 
Demonstration Phase, and was approved to enter low rate initial 
production in March 2003.

Program Strategy: 

We assessed the program strategy for the GMLRS as green because the 
Army has developed a long-term program strategy for sustaining the 
GMLRS inventory, including procurement of a total of 140,004 missiles 
that will satisfy the total requirement. Of this total, the Army plans 
to procure 18,582 missiles by fiscal year 2009. The remaining 121,422 
will be procured after fiscal year 2009. The Army approved low rate 
initial production for a total of 1,920 missiles through fiscal year 
2005. The initial operational capability date is scheduled for 2nd 
quarter fiscal year 2006. The Army has also preplanned a product 
improvement to the GMLRS-DPICM called the GMLRS--Unitary. This 
improvement is in the concept development phase and is scheduled to 
begin a spiral System Development and Demonstration. The Army has not 
decided how many of the 1,920 initial production rockets will include 
the guided unitary upgrade.

Funding: 

We assessed the funding for the GMLRS as green because current and 
projected funding is consistent with the Army's stated requirements to 
sustain the GMLRS Munitions program. The GMLRS program is fully funded 
and properly phased for rapid acquisition. The Army plans to purchase a 
total of 140,004 GMLRS rockets for $11.7 billion. Of the 140,004 GMLRS 
rockets, the Army plans to procure 18,582 through fiscal year 2009 for 
$1.7 billion. The remaining 121,422 rockets will cost the Army 
approximately $10 billion. In March 2003, the system met all modified 
low rate initial production criteria to enter the first phase to 
produce 108 rockets for $36.6 million. Phases II and III will procure 
the remaining 1,812 rockets during fiscal year 2004 (786 rockets) and 
fiscal year 2005 (1,026 rockets) for $220.4 million.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the GMLRS, Army officials did not identify any 
specific capability concerns. The GMLRS-DPICM is expected to achieve 
greater range and precision accuracy. The upgraded improvement will 
reduce the number of rockets required to defeat targets out to 60 
kilometers or greater, and reduce collateral damage. It is also 
expected to reduce hazardous duds to less than 1 percent.

Air Force:

F-16 Fighting Falcon Aircraft:

The F-16 is a compact, multi-role fighter with air-to-air combat and 
air-to-surface attack capabilities. The first operational F-16A was 
delivered in January 1979. The Air Force currently has 1,381 F-16 
aircraft in its inventory, and the average age is about 15 years. The 
F-16B is a two-seat, tandem cockpit aircraft. The F-16C and D models 
are the counterparts to the F-16A/B, and incorporate the latest 
technology. Active units and many reserve units have converted to the 
F-16C/D. The Air Force plans to replace the F-16 with the F-35 Joint 
Strike Fighter beginning in 2012.

Figure 8: F-16 Fighting Falcon Aircraft:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the F-16 as green because mission capable 
rates have been near the current goal of 83 percent with mission 
capable rates for all of the Air Force's Air Combat Command (ACC) F-16s 
ranging from 75 percent to 79 percent during the past 5 years. Although 
these rates are below the goal, officials said they were sufficient to 
provide flying hours for pilot training, and to meet operational 
requirements. In fiscal year 2002, the planned utilization rate, (i.e., 
the average number of sorties per aircraft per month) for ACC aircraft 
was 17.5 sorties per month, and the actual utilization was 17.7 
sorties. Although the average age of the F-16 is about 15 years, there 
are no material deficiencies that would limit its effectiveness and 
reliability. Known and potential structural problems associated with 
aging and accumulated flying hours are being addressed through ongoing 
depot maintenance programs.

Program Strategy: 

We assessed the program strategy for the F-16 as green because the 
Air Force has developed a long-term program strategy for sustaining and 
replacing the F-16 inventory. The program should ensure that the 
aircraft remains a viable and capable weapons system throughout the 
FYDP. Subsequently, the Air Force intends to begin replacing the F-16 
with the Joint Strike Fighter (F-35), which is already in development.

Funding: 

We assessed the funding for the F-16 as yellow because current and 
projected funding is not consistent with the Air Force's stated 
requirements to sustain and replace the F-16 inventory. There are 
potential shortfalls in the funding for depot maintenance programs and 
modifications during the next 3-5 years. Although funding has been 
programmed for this work, unexpected increases in depot labor rates 
have been significant, and additional funding may be required to 
complete the work. For fiscal year 2004, the Air Force included 
$13.5 million for the F-16 in its Unfunded Priority List.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the F-16, the aircraft has successfully 
fulfilled its recent wartime missions. F-16 fighters were deployed to 
the Persian Gulf in 1991 in support of Operation Desert Storm, and flew 
more sorties than any other aircraft. The F-16 has also been a major 
player in peacekeeping operations including the Balkans since 1993. 
Since the terrorist attack in September 2001, F-16s comprised the bulk 
of the fighter force protecting the skies over the United States in 
Operation Noble Eagle. More recently, F-16s played a major role in 
Afghanistan in Operation Enduring Freedom, and have performed well in 
combat in Operation Iraqi Freedom, in which the F-16 once again 
provided precision-guided strike capabilities and suppression of enemy 
air defenses. During Operation Iraqi Freedom, the Air Force deployed 
over 130 F-16s that contributed significantly to the approximately 
8,800 sorties flown by Air Force fighter aircraft.

B-2 Spirit Bomber:

The B-2 is a multi-role heavy bomber with stealth characteristics, 
capable of employing nuclear and conventional weapons. The aircraft was 
produced in limited numbers to provide a low observable (i.e., stealth) 
capability to complement the B-1 and B-52 bombers. Its unique stealth 
capability enables the aircraft to penetrate air defenses. The Air 
Force currently has 21 B-2 aircraft in its inventory, and the average 
age is about 9 years. The first B-2 was deployed in December 1993, and 
currently all B-2s in the inventory are configured with an enhanced 
terrain-following capability and the ability to deliver the Joint 
Direct Attack Munition and the Joint Stand Off Weapon.

Figure 9: B-2 Spirit Bomber:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the B-2 as yellow because the B-2 did not 
meet its mission capable goal of 50 percent. Officials said that the 
aircraft itself is in good condition, but it is the maintainability of 
its stealth characteristics that is driving the low mission capable 
rates. Officials pointed out that despite low mission capable rates the 
B-2 has been able to meet requirements for combat readiness training 
and wartime missions. For example, four B-2 aircraft were deployed and 
used during Operation Iraqi Freedom, and maintained a mission capable 
rate of 85 percent. Mission capable rates have improved slightly, and 
officials said that recent innovations in low observable maintenance 
technology and planned modifications are expected to foster additional 
improvement.

Program Strategy: 

We assessed the program strategy for the B-2 as green because the Air 
Force has developed a long-term program strategy for sustaining the 
B-2 inventory. Program plans appear to ensure the viability of this 
system through the Future Years Defense Plan. Procurement of this 
aircraft is complete. The Air Force plans to maintain and improve its 
capabilities, ensuring that the B-2 remains the primary platform in 
long-range combat aviation.

Funding: 

We assessed the funding for the B-2 as green because current and 
projected funding is consistent with the Air Force's stated 
requirements to sustain the B-2 inventory. The programmed funding 
should allow execution of the program strategy to sustain, maintain, 
and modify the system through the Future Years Defense Plan. The B-2 is 
of special interest to the Congress, which requires an annual report on 
this system, including a schedule of funding requirements through the 
Future Years Defense Plan. No items specific to the B-2 were included 
in the Air Force's fiscal year 2004 Unfunded Priority List.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the B-2, the aircraft has successfully fulfilled 
its wartime missions despite current condition weaknesses. The Air 
Force demonstrated the aircraft's long-range strike capability by 
launching missions from the United States, striking targets in 
Afghanistan, and returning to the States. More recently, the Air Force 
deployed four B-2 aircraft to support Operation Iraqi Freedom, where 
they contributed to the 505 sorties flown by bombers during the 
conflict. The B-2 Annual Report to the Congress states that the B-2 
program plan will ensure that the B-2 remains the primary platform in 
long-range combat aviation.

C-5 Galaxy Transport Aircraft:

The C-5 Galaxy is the largest of the Air Force's air transport 
aircraft, and one of the world's largest aircraft. It can carry large 
cargo items over intercontinental ranges at jet speeds and can take off 
and land in relatively short distances. It provides a unique capability 
in that it is the only aircraft that can carry certain Army weapon 
systems, main battle tanks, infantry vehicles, or helicopters. The C-5 
can carry any piece of army combat equipment, including a 74-ton mobile 
bridge. With aerial refueling, the aircraft's range is limited only by 
crew endurance. The first C-5A was delivered in 1969. The Air Force 
currently has 126 C-5 aircraft in its inventory, and the average age is 
about 26 years.

Figure 10: C-5 Galaxy Transport Aircraft:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the C-5 as yellow because it consistently 
failed to meet its mission capable goal of 75 percent; however, mission 
capable rates have been steadily improving and, in April 2003, active 
duty C-5s exceeded the goal for the first time. Program officials 
pointed out that, although the total fleet has never achieved the 
75 percent goal, there has been considerable improvement over time, 
with the rate rising from about 42 percent in 1971 to about 71 percent 
in 2003. The Air Force Scientific Advisory Board has estimated that 
80 percent of the airframe structural service life remains. 
Furthermore, Air Force officials said that the two major modification 
programs planned, the avionics modernization program and reliability 
enhancement and re-engining program, should significantly improve 
mission capable rates.

Program Strategy: 

We assessed the program strategy for the C-5 as green because the Air 
Force has developed a long-term program strategy for sustaining and 
modernizing the aging C-5 inventory. The Air Force has planned a 
two-phase modernization program through the future years defense 
program that is expected to increase the aircraft's mission capability 
and reliability. The Air Force plans to modernize the C-5 to improve 
aircraft reliability and maintainability, maintain structural and 
system integrity, reduce costs, and increase operational capability. 
Air Force officials stated that the C-5 is expected to continue in 
service until about 2040 and that, with the planned modifications, the 
aircraft could last until then. As an effort to meet strategic airlift 
requirements, the Air Force has contracted to buy 180 C-17s, will 
retire 14 C-5s by fiscal year 2005, and may retire additional aircraft 
as more C-17s are acquired.

Funding: 

We assessed the funding for the C-5 as yellow because current and 
projected funding is not consistent with the Air Force's stated 
requirements to sustain and modernize the aging C-5 inventory. 
According to officials, the program lost production funding because of 
problems during the early stage of the program. Currently 49 aircraft 
are funded for the avionics program through the Future Years Defense 
Plan. For fiscal year 2004, the Air Force included $39.4 million in its 
Unfunded Priority List to restore the program to its prior timeline.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the C-5, Air Force officials indicated that the 
aircraft has successfully fulfilled its recent wartime missions. The 
Air Force has not noted any factors or capability concerns that would 
prevent the C-5 from effectively performing its wartime mission.

KC-135 Stratotanker Aircraft:

The KC-135 is one of the oldest airframes in the Air Force's inventory, 
and represents 90 percent of the tanker fleet. Its primary mission is 
air refueling, and it supports Air Force, Navy, Marine Corps, and 
allied aircraft. The first KC-135 was delivered in June 1957. The 
original A models have been re-engined, modified, and designated as E, 
R, or T models. The E models are located in the Air Force Reserve and 
Air National Guard. The total inventory of the KC-135 aircraft is 543, 
and the average age is about 43 years.

Figure 11: KC-135 Stratotanker Aircraft:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the KC-135 as yellow because it maintained 
mission capable rates at or near the 85 percent goal despite the 
aircraft's age and potential corrosion of its structural components. 
Although the aircraft is about 43 years old, average flying hours are 
slightly over a third of its expected life of 39,000 hours, and an Air 
Force study projected the KC-135 would last until about 2040. All 
KC-135s were subjected to an aggressive corrosion preventive program 
and underwent significant modifications, including replacement of the 
cockpit. Nevertheless, citing increases in the work needed during 
periodic depot maintenance, costs, and risk of the entire fleet being 
grounded, the Air Force decided to accelerate recapitalization from 
2013 to about 2006.

Program Strategy: 

We assessed the program strategy for the KC-135 as red because the Air 
Force has developed a long-term program strategy to modernize the aging 
KC-135 tanker fleet, but it has not demonstrated the urgency of 
acquiring replacement aircraft and has not defined the requirements for 
the number of aircraft that will be needed. As we stated in testimony 
before the House Committee on Armed Services, Subcommittee on 
Projection Forces, the department does not have a current, validated 
study on which to base the size and composition of either the current 
fleet or a future aerial refueling force.[Footnote 25] The Air Force 
has a large fleet of KC-135s (about 543), which were flown about 300 
hours annually between 1995 and September 2001. Since then utilization 
is about 435 hours per year. Furthermore, the Air Force has a shortage 
of aircrews to fly the aircraft it has. In Operation Iraqi Freedom, a 
relatively small part of the fleet was used to support the conflict 
(149 aircraft). Without a definitive analysis, it is difficult to 
determine if recapitalization is needed and what alternatives might 
best satisfy the requirement.

Funding: 

We assessed the funding of the KC-135 as red because current and future 
funding is not consistent with the Air Force stated requirements to 
sustain and modernize the KC-135 tanker fleet. The Air Force has not 
addressed recapitalization funding in the current defense budget or in 
the Future Years Defense Plan. The Air Force plans to begin acquiring 
new aircraft almost immediately, but does not want to divert funding 
from other programs to pay for them. The Air Force proposed a unique 
leasing arrangement with Boeing that will provide new tankers as early 
as 2006. There remains controversy over the lease terms, aircraft 
pricing, and how the Air Force will pay for the lease.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the KC-135, Air Force officials indicated that 
the aircraft has successfully fulfilled its recent wartime missions 
despite current condition problems. The KC-135 comprised 149 of the 182 
tanker aircraft the Air Force used during Operation Iraqi Freedom, and 
those aircraft flew almost 6,200 sorties and offloaded over 376 million 
pounds of fuel. The KC-135 maintained a mission capable rate above the 
current goal of 85 percent during Operation Iraqi Freedom.

Conventional Air Launched Cruise Missile (CALCM):

The CALCM is an accurate long-range standoff weapon with an adverse 
weather, day/night, and air-to-surface capability. It employs a global 
positioning system coupled with an inertial navigation system. It was 
developed to improve the effectiveness of the B-52 bombers and became 
operational in January 1991. Since initial deployment, an upgraded 
avionics package, including a larger conventional payload and a multi-
channel global positioning system receiver, has been added on all of 
the missiles. The CALCM total inventory is about 478, and the average 
age is about 15 years.

Figure 12: Conventional Air Launched Cruise Missile:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the CALCM as green because the CALCM has 
demonstrated high reliability. The Air Force has not noted any chronic 
factors or problems that limit the effectiveness or reliability of the 
missile. However, according to officials, the diagnostics test 
equipment needs to be upgraded because it is old and was designed to 
support less sophisticated missiles. Currently, the Air Force uses the 
same test equipment for both the conventional and nuclear weapons.

:

Program Strategy: 

We assessed the program strategy for the CALCM as green because the Air 
Force has a long-term program strategy for sustaining and modernizing 
its current inventory of cruise missiles. The Air Force does not have 
any future plans to convert or purchase any additional nuclear 
missiles. The Joint Chief of Staff must authorize the use of the 
conventional weapons and approve the program in order to procure 
additional missiles. As the inventory is depleted, the conventional 
weapon will be replaced with other systems with similar capabilities, 
such as the Joint Air-to-Surface Standoff Missile, which is currently 
under development. The Joint Air-to-Surface Standoff Missile will not 
be a one-for-one replacement for the conventional missile.

Funding: 

We assessed the funding for the CALCM as green because current and 
projected funding is consistent with the Air Force stated requirements 
to sustain and modernize its cruise missile inventory. Procurement of 
the cruise missile is complete, and no funding has been provided for 
research and development or procurement in the fiscal year 2003 budget.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the CALCM, Air Force officials indicated that it 
successfully fulfilled its recent wartime missions. These officials 
indicated that the cruise missile played a significant role in the 
initial strikes during Operation Iraqi Freedom. During Operation Iraqi 
Freedom, 153 missiles were expended, and the version that is designed 
to penetrate hard targets was first employed.

Joint Direct Attack Munition (JDAM):

The Joint Direct Attack Munition is a guidance tail kit that converts 
existing unguided bombs into accurate, all-weather "smart" munitions. 
This is a joint Air Force and Navy program to upgrade the existing 
inventory of 2,000 and 1,000-pound general-purpose bombs by integrating 
them with a guidance kit consisting of a global positioning system-
aided inertial navigation system. In its most accurate mode, the system 
will provide a weapon circular error probable of 13 meters or less. The 
JDAM first entered the inventory in 1998. The total projected inventory 
of the JDAM is about 92,679, and the current average age is less than 
5 years. Future upgrades will provide a 3-meter precision and improved 
anti-jamming capability.

Figure 13: Joint Direct Attack Munition:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the JDAM as green because it consistently 
met its reliability goal of 95 percent. The munitions are used as they 
become available; therefore, no maintenance is involved. Although the 
Air Force does not monitor the condition of munitions, they keep track 
of each component of the guidance kit, which is tracked for 
serviceability. The kit is under a 20-year warranty. The munitions are 
purchased serviceable and are tested before used by the operational 
units. In addition to high reliability, the JDAM can be purchased at a 
low cost and are being delivered more than three times as fast as 
planned.

Program Strategy: 

We assessed the program strategy for the JDAM as green because the Air 
Force has a long-term program strategy for sustaining and maintaining 
its production of the munitions. The Joint Direct Attack Munition 
requirements are driven by assessments of war readiness and training 
requirements. Currently, Boeing is in full production and is increasing 
its production to about 2,800 per month for the Air Force and Navy, an 
increase from approximately 700-900 a month. The second production line 
is up and running.

Funding: 

We assessed the funding for the JDAM as green because current and 
projected funding is consistent with the Air Force's stated 
requirements to sustain and maintain production of the munitions. The 
President's fiscal year 2003 budget provided funding for the 
procurement of the system through the future years defense plan. Air 
Force officials stated that the munitions have all the funding it 
needs; however, it is limited by the production capability of its 
contractor, Boeing.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the JDAM, Air Force officials indicated that it 
has successfully fulfilled its recent wartime missions. The weapon 
system played a role in operations in Kosovo, Afghanistan, and Iraq. 
According to the Air Force, the weapon has operationally proven to be 
more accurate, reliable, and effective than predicted. The Air Force 
has not noted any factors or capability concerns that would prevent the 
Joint Direct Attack Munitions from effectively fulfilling its wartime 
mission.

Navy:

DDG-51 Arleigh Burke Class Destroyer:

Navy Destroyers are multi-mission combatants that operate offensively 
and defensively, independently, or as part of carrier battle groups, 
surface action groups, and in support of Marine amphibious task forces. 
This is a 62-ship construction program, with 39 in the fleet as of 
2003. The average age of the ships is 5.8 years, with the Arleigh Burke 
(DDG-51) coming into service in 1991. The follow-on program is the 
DD(X), with initial construction funding in 2005 and delivery beginning 
2011.

Figure 14: DDG-51 Arleigh Burke Class Destroyer:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the DDG-51 as yellow because work 
programmed for scheduled maintenance periods is often not accomplished. 
Because of budget limitations for each ship's dry-dock period and a 
Navy effort to level port workloads and provide stability in the 
industrial base, maintenance items are often cut from the planned work 
package during dry-dock periods. Those items are then deferred to the 
next scheduled docking or accomplished as possible in the ship's 
continuous maintenance phase. Deferring maintenance affects corrosion 
issues, particularly the ship's hull. Engineering and combat systems 
have priority for resources with desirable, though not necessarily 
essential, crew quality of life improvements deferred to a later time. 
The Navy balances risk between available resources and deferring 
maintenance to make the most cost-effective decision and ensure ships 
deploy without or with minimal safety or combat system deficiencies.

Program Strategy: 

We assessed the program strategy for the DDG-51 as yellow because the 
Navy has developed a long-term program strategy for sustaining and 
upgrading the DDG-51 fleet; however, budget cuts in the Navy's 
shipbuilding program affect upgrades to the warfighting systems and may 
lead to potential problems in the industrial base when transitioning 
from DDG to DD(X) ships. Navy officials noted that these budget cuts 
prevent them from buying the latest available technologies. These 
technologies are usually in warfighting systems, such as command and 
control and system integration areas. Management of the transition 
period from DDG to DD(X) shipbuilding between 2005 and 2008 will be key 
to avoid problems from major fluctuations in the workload and workforce 
requirements.

Funding: 

We assessed the funding for the DDG-51 as yellow because current 
and projected funding is not consistent with the Navy's statement 
requirements to sustain and upgrade the DDG-51 fleet. Lack of multiyear 
budget authority creates budget inefficiencies because the Navy is 
required to spend supplemental and 1-year funds within the year in 
which it is appropriated. The Navy attempts to reduce ship maintenance 
costs by leveling the maintenance workload for ship contractors, which 
provides the Navy and contractors greater flexibility and 
predictability. The lack of multiyear budgeting and the need to spend 
supplemental and 1-year funds in the current year limits that effort. 
Ports are not equipped or manned to accomplish the volume of work 
required in the time-span necessary to execute 1-year appropriations. 
In some cases, differences between the Navy estimate of scheduled 
maintenance costs and the contractor bid to do the work requires cuts 
to the ship's planned work package, further contributing to the 
deferred maintenance backlog.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the DDG-51, Navy officials raised a number of 
capability concerns. Specifically, these officials indicated that the 
DDG-51 has successfully fulfilled its recent wartime mission, but with 
some limitations such as communications shortfalls and force protection 
issues. Although the DDG-51 class is the newest ship in the fleet with 
the most up to date technologies, fleet officers said there is 
insufficient bandwidth for communications during operations. Navy 
officials cited effective management of available communications assets 
rather than the amount of available bandwidth as the more immediate 
challenge. In the current threat environment, force protection issues 
remain unresolved. The use of the Ridged Hull Inflatable Boat (RHIB) 
during operations at sea without on-board crew-served weapons and 
hardening protection concerns commanders. The small caliber of sailors' 
personal and crew-served weapons limits their effectiveness against the 
immediate and close-in threat from small boat attack.

FFG-7 Oliver Hazard Perry Class Frigate:

Navy FFG-7 Frigates are surface combatants with anti-submarine warfare 
(ASW) and anti-air warfare (AAW) capabilities. Frigates conduct escort 
for amphibious expeditionary forces, protection of shipping, maritime 
interdiction, and homeland defense missions. There are 32 FFGs in the 
fleet, with 30 programmed for modernization. The average age of the 
fleet is 19 years. The FFGs are expected to remain in the fleet until 
2020.

Figure 15: FFG-7 Oliver Hazard Perry Class Frigate:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the FFG-7 as yellow because work 
programmed for scheduled maintenance periods is often not accomplished. 
Because of budget limitations for each ship's dry-dock period and a 
Navy effort to level port workloads and provide stability in the 
industrial base, maintenance items are often cut from the planned work 
package during dry-dock periods. These items are then deferred to the 
next scheduled docking or accomplished as possible in the ship's 
continuous maintenance phase. Deferring maintenance affects corrosion 
issues, particularly the ship's hull. Engineering and combat systems 
have priority for resources with desirable, though not necessarily 
essential, crew quality of life improvements deferred to a later time. 
The Navy balances risk between available resources and deferring 
maintenance to make the most cost-effective decision and ensure ships 
deploy without or with minimal safety or combat system deficiencies. 
There is the additional burden of maintaining older systems on the 
frigates.

Program Strategy: 

We assessed the program strategy for the FFG-7 as yellow because the 
Navy has developed a long-term program strategy for sustaining and 
modernizing the FFG-7 fleet; however, the program is susceptible to 
budget cuts. The modernization program is essential to ensure the 
frigates' continued viability. There is also uncertainty about the role 
frigates will play as the Littoral Combat Ship is developed.

Funding: 

We assessed the funding for the FFG-7 as yellow because current and 
projected funding is not consistent with the Navy's stated requirements 
to sustain and modernize the FFG-7 fleet. Uncertainty about 
modernization program funding and budget inefficiencies created by the 
lack of multiyear budget authority and the requirement to spend 
supplemental and 1-year funds when they are appropriated. The Navy 
attempts to reduce ship maintenance costs by leveling the maintenance 
workload for ship contractors, which provides the Navy and contractors 
greater flexibility and predictability. The lack of multiyear budget 
authority and the need to spend supplemental and 1-year funds in the 
current year in which they are appropriated limits that effort. Ports 
are not equipped or manned to accomplish the volume of work required in 
the time span necessary to execute 1-year appropriations. In some 
cases, differences between the Navy estimate of scheduled maintenance 
costs and the contractor bid to do the work requires cuts to the ship's 
planned work package, further contributing to the deferred maintenance 
backlog.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the FFG-7, Navy officials identified a number of 
capability concerns including communications shortfalls and potential 
vulnerabilities to air warfare. The frigate's ability to operate in a 
battle group environment is limited by insufficient bandwidth and lack 
of command circuits for communications requirements. The Navy shut down 
the frigate's missile launcher because of excessive maintenance costs. 
Ship commanders in the fleet expressed concern about potentially 
deploying with only one of three compensating systems for anti-air 
warfare missions, the on-board 76-mm rapid-fire gun (CWIS-1B, Close-In 
Weapons System). Officials in the program manager's office stated 
fielding plans were in place for the other two systems, the MK53 Decoy 
Launch System, called NULKA, and the Rolling Airframe Missile (RAM). 
These systems will help mitigate the frigate's vulnerability after 
shutting down the missile launcher. The frigate's value to surface 
groups operating independently of carriers is as a helicopter platform.

F/A-18 Hornet/Super Hornet Aircraft:

The F/A-18 is an all-weather fighter and attack aircraft expected to 
fly in the fleet to 2030. There are six models in the current inventory 
of 875: A, 178; B, 30; C, 405; D, 143; E, 55; and F, 64. Average age 
in years is: A, 16.4; B, 18.0; C, 10.6; D, 10.1; E, 1.7; and F, 1.5. 
The Navy plans to eventually replace the F/A-18 with the Joint Strike 
Fighter.

Figure 16: F/A-18 Hornet/Super Hornet Aircraft:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the F/A-18 as yellow because it 
consistently failed to meet mission capable and fully mission capable 
goals of 75 percent and 58 percent, respectively. Squadrons that are 
deployed or are training for deployment generally exceed these goals. 
Maintaining the aircraft is increasingly difficult because of personnel 
shortfalls, increased flying requirements, and lack of ground support 
equipment. Navy depot personnel indicated that the availability of 
spare parts remains the largest issue in repairing and returning 
aircraft to the fleet.

Program Strategy: 

We assessed the program strategy for the F/A-18 as yellow because the 
Navy has developed a long-term program strategy for sustaining and 
maintaining the F/A-18 fleet; however, it lacks a common baseline 
capability for all aircraft. Navy officials stated managing the 
configuration of the various versions of the aircraft is challenging. 
Each version of the aircraft has different repair parts, unique on-
board equipment, and specially trained maintainers and pilots. To 
increase the service life of the aircraft, the Navy initiated the 
Center Barrel Replacement (CBR) program. CBR replaces those parts of 
the F/A-18 fuselage that have the greatest stress placed on them from 
landing on aircraft carriers. The Navy is also initiating a Navy/Marine 
Tactical Air Integration program that combines low flying-hour / low 
carrier-landing aircraft for carrier use and high flying-hour / high 
carrier-landing aircraft for shore basing. If CBR is adequately funded 
and the Tactical Air Integration initiative proceeds, the F/A-18 will 
remain a viable system into the future.

Funding: 

We assessed the funding for the F/A-18 as yellow because current and 
projected funding is not consistent with the Navy's stated requirements 
to sustain and maintain the F/A-18 fleet. The Navy intends to fly the 
F/A-18A-D models until 2020 and the E/F models to at least 2030. 
Funding for ground support equipment for the A-D models was eliminated, 
leaving operators and program managers to find resources elsewhere. 
Program dollars are often drawn back, pushing modernization to the 
out years. This is a problem for the CBR program that is $72 million 
short in the current Future Years Defense Plan. Navy personnel state 
that the CBR program must be fully funded to meet the number of 
aircraft required to support the Tactical Air Integration initiative 
and standards in the new Fleet Response Plan.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the F/A-18, Navy officials indicated that the 
aircraft has successfully fulfilled its wartime missions despite 
current condition problems. The A-D models, along with the E/F models 
coming into the inventory, provide a multi-capable aircraft for the 
many roles the war fighting commanders require. These multi-role 
capabilities were demonstrated during Operation Iraqi Freedom with the 
F/A-18 performing air, ground attack, and refueling missions. Navy 
officials stated that they will do whatever is necessary to accomplish 
the mission, but raised concerns that maintenance costs are increasing 
due to current conditions problems. Specifically these officials stated 
that increased maintenance man hours per aircraft sortie, increased 
cannibalization rates, and decreased readiness rates are creating more 
stress on the aircraft and the personnel who fly and maintain them.

EA-6B Prowler Aircraft:

The EA-6B is an integrated electronic warfare aircraft system combining 
long-range, all-weather capabilities with advanced electronic 
countermeasures. Its primary mission is to support strike aircraft and 
ground troops by jamming enemy radar, data links, and communications. 
The current inventory is 121 with an average age of 20.7 years. The 
follow-on aircraft is the E/A-18G Growler Airborne Electronic Attack 
aircraft, a variant of the F/A-18 E/F.

Figure 17: EA-6B Prowler Aircraft:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the EA-6B as yellow because it 
consistently failed to meet the mission capable goal of 73 percent. 
However, squadrons training for deployment or those that are deployed 
generally exceed this goal. Fatigue life expenditure (FLE), the 
predictable rate of wear and deterioration of wing center sections and 
outside wing panels, is a critical problem and has caused aircraft to 
be temporarily grounded or placed under flying restrictions to mitigate 
risk to the aircraft. Wing center sections are that part of the plane 
where the wings and fuselage attach. Outer wing panels are that part of 
the wing that fold up when the plane is onboard carriers. The Navy is 
aggressively managing the problem and has programs in place to replace 
these items in the near term.

Program Strategy: 

We assessed the program strategy for the EA-6B as yellow because the 
Navy has developed a long-term program strategy for upgrading the EA-6B 
fleet; however, aircraft capability requirements may not be met in the 
future. The Improved Capability 3rd Generation (ICAPIII) upgrade is a 
significant technology leap in jamming capabilities over the current 
second-generation capability. ICAPIII will counter threats through 2015 
and provides an advanced jamming capability, accurate target location, 
and full circle coverage. By 2007, 30 percent of the fleet will be 
ICAPIII equipped. The Navy plans for the follow-on EA-18G Growler to 
join the fleet between 2008 and 2012. The Navy purchase plan calls for 
90 aircraft with over two-thirds (65 aircraft) procured by 2009.

Funding: 

We assessed the funding for the EA-6B as red because current and 
projected funding is not consistent with the Navy's stated requirements 
to sustain and upgrade the EA-6B fleet. The Navy relies upon additional 
congressional appropriations rather than requesting funds to meet 
program requirements. In fiscal year 2003, the Congress appropriated an 
additional 17 percent ($40 million) over DOD's request for the EA-6B. 
The Navy is not funding modernization programs to the stated 
requirements. The Navy's requirement for the ICAPIII electronic attack 
upgrade is 42 systems, although the Navy is only funding 35 systems. 
According to the program manager, funding for replacing the EA-6B's 
outside wing panels is still uncertain.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the EA-6B, Navy officials indicated that the 
aircraft has successfully fulfilled its wartime missions with some 
limitations. Potential funding shortfalls and capability limitations 
may affect the aircraft's ability to perform its mission. Only 98 out 
of 108 aircraft in the Navy's EA-6B inventory are available to the 
fleet. Current EA-6B capabilities can meet the threat, although without 
an increase in the number of ICAPIII capable aircraft, the Navy may not 
be able to meet future threats. According to Navy officials, there is 
an impending severe impact on warfighting capabilities if the Navy does 
not receive fiscal year 2003 procurement funding for outside wing 
panels as requested. Specifically, the combination of the expected wear 
and tear on the panels and the normal aircraft attrition rate could 
reduce the total EA-6B inventory by 16 in 2005.

LPD-4 Amphibious Transport Dock Ship:

The LPD-4 ships are warships that embark, transport, and land elements 
of a Marine landing force and its equipment. There are currently 11 in 
the inventory with an average age of 35 years. These ships are expected 
to remain in the fleet until 2014. The San Antonio-class LPD-17 (12-
ship construction program, LPD-17 through LPD-28) will eventually 
replace the LPD-4.

Figure 18: LPD-4 Amphibious Transport Dock Ship:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the LPD-4 as yellow because work 
programmed for scheduled maintenance periods is often not accomplished. 
Because of budget limitations for each ship's dry-dock period and a 
Navy effort to level port workloads and provide stability in the 
industrial base, maintenance items are often cut from the planned work 
package during dry-dock periods. These items are then deferred to the 
next scheduled docking or accomplished as possible in the ship's 
continuous maintenance phase. Deferring maintenance increases 
corrosion problems, particularly for the ship's hull. There are 
consistent problems with the engagement system for on-board weapons and 
the hull, mechanics, and electrical (HME) systems associated with the 
ship's combat support system. The age of the LPD-4 fleet directly 
contributes to the deteriorating condition of the ships, particularly 
the hydraulic systems. The Navy balances risk between available 
resources and deferring maintenance to make the most cost-effective 
decision and ensure ships deploy without or with minimal safety or 
combat system deficiencies.

Program Strategy: 

We assessed the program strategy for the LPD-4 as green because the 
Navy has developed a long-term program strategy to sustain and replace 
amphibious dock ships and improve support to Marine amphibious forces. 
The Extended Sustainment Program was initiated because of delay in 
delivery of the new LPD-17 class ships. The program will extend the 
service life of 6 of 11 ships for an average of 7.3 years to the 2009-
2014 time frame. The program consists of 37 prioritized work items 
endorsed by the Navy. The follow-on LPD-17 ship construction program 
incorporates innovative design and total ownership cost initiatives; 
however, no modernization or upgrades are planned in the construction 
timeline from 1999 to 2013.

Funding: 

We assessed the funding for the LPD-4 as yellow because current and 
projected funding is not consistent with the Navy's stated requirements 
to sustain and replace amphibious dock ships. The age and 
decommissioning schedule for the ships means funding priorities are 
placed elsewhere. The Navy is seeking cost savings through efforts to 
level the industrial base in ports and provide predictability and 
management flexibility for programmed maintenance work. A significant 
limitation in that effort is the inability to use multiyear budgeting 
and the need to spend supplemental and 1-year funds in the year of 
appropriation. Ports are often not equipped and manned to accomplish 
the volume of work required in the time-span necessary to execute 1-
year budgets.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the LPD-4, Navy officials did not identify any 
specific capability concerns. These officials indicated that the LPD-4 
fulfilled its recent wartime missions of transporting and moving 
Marines and their equipment ashore.

Standard Missile-2 Surface-to-Air Missile:

The Standard Missile-2 (SM-2) is a medium to long-range, shipboard 
surface-to-air missile with the primary mission of fleet area air 
defense and ship self-defense, and a secondary mission of anti-surface 
ship warfare. The Navy is currently procuring only the Block IIIB 
version of this missile. While the actual number in the inventory is 
classified, the Navy plans to procure 825 Block IIIB missiles between 
fiscal years 1997 and 2007. Currently, 88 percent of the inventory is 
older than 9 years. A qualitative evaluation program adjusted the 
initial 10-year service life out to 15 years.

Figure 19: Standard Missile-2 Surface-to-Air Missile:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the Standard Missile-2 as red because it 
failed to meet the asset readiness goal of 87 percent and only 2 of 5 
variants achieved the goal in fiscal year 2002. The asset readiness 
goal is the missile equivalent of mission capable goals. The percent of 
non-ready for issue missiles (currently at 23 percent of the inventory) 
will increase because of funding shortfalls.

Program Strategy: 

We assessed the program strategy for the Standard Missile-2 as yellow 
because the Navy has developed a long-term program strategy for 
upgrading the Standard Missile-2 inventory; however, the Navy's 
strategy mitigates risk with complementary systems as the SM-2 
inventory draws down and upgrades to counter known threats are cut from 
the budget. In 2002, the Navy cancelled production of the most capable 
variant at the time, the SM-2 Block IVA. Currently, the most capable 
missile is the SM-2 Block IIIB, which is the only variant in 
production. This missile will be the main anti-air warfare weapon on 
board Navy ships into the next decade. Improved Block IIIB missiles 
will be available in 2004. The SM-6 Extended Range Active Missile 
(ERAM) is programmed for initial production in 2008 and will be 
available to the fleet in 2010.

Funding: 

We assessed the funding for the Standard Missile-2 as red because 
current and projected funding is not consistent with the Navy's stated 
requirements to upgrade the Standard Missile-2 inventory. There is a 
$72.6 million shortfall for maintenance and a shortfall of 
approximately $60 million for procurement in the current Future Years 
Defense Plan.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the Standard Missile-2, Navy officials indicated 
that it successfully fulfilled its recent wartime missions but with 
some limitations. Block IIIB and improved Block IIIB missiles 
successfully counter the threats they were designed to counter. 
However, the most capable variant in the current inventory cannot 
handle the more sophisticated known air threats. The Navy lost a 
capability to intercept extended range and ballistic missiles when 
development of the Block IVA variant was cancelled. The improved Block 
IIIB missiles will mitigate some risk until the SM-6 ERAM is deployed 
in 2010. Further, Navy officials stated that the Navy accepts an 
element of risk until the SM-6 is deployed because the threat is 
limited in both the number of missiles and the scenarios where those 
missiles would be employed. Officials also described the Navy's anti-
air warfare capability as one of complementary systems and not 
singularly dependent on the SM-2 missile. The Navy successfully 
increased the deployment of these missiles to the fleet for the recent 
operations in Afghanistan and Iraq, but the growing shortage of ready-
for-issue missiles in future years could severely limit the Navy's 
ability to meet future requirements.

Tomahawk Cruise Missile:

The Tomahawk Cruise Missile is a long-range, subsonic cruise missile 
used for land attack warfare, and is launched from surface ships and 
submarines. The current inventory is 1,474 missiles, with an average 
age of 11.88 years and a 30-year service life. During Operation Iraqi 
Freedom, 788 Tomahawk's were expended. The follow-on Tactical Tomahawk 
(TACTOM) is scheduled to enter the inventory in 2005.

Figure 20: Tomahawk Cruise Missile:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the Tomahawk Cruise Missile as green 
because it consistently met asset readiness goals in recent years. The 
asset readiness goal is classified.

Program Strategy: 

We assessed the program strategy for the Tomahawk Cruise Missile as red 
because the Navy has developed a long-term program strategy for 
upgrading the Tomahawk Cruise Missile inventory; however, the future 
inventory level will not be determined until funding questions are 
resolved. During Operation Iraqi Freedom, 789 Tomahawks were expended 
with a remaining inventory of 1,474. The replenishment missiles are all 
programmed to be the new Tactical Tomahawk missile. Even when funding 
is appropriated and executed this fiscal year, the first available date 
for new missiles entering the inventory will be late 2005-
2006.[Footnote 26] A remanufacturing program planned for 2002-2004 is 
upgrading the capabilities of older missiles. There are 249 missiles 
remaining to be upgraded.

Funding: 

We assessed the funding for the Tomahawk Cruise Missile as red because 
current and projected funding is not consistent with the Navy's stated 
requirements to replenish the inventory and new production is 
unresolved. Inventory replenishment funding was authorized by the 
Congress and, at the time of our review, was in conference to resolve 
differences between the two bills.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability for the Tomahawk Cruise Missile, Navy officials 
indicated that it has successfully fulfilled its wartime missions 
during recent operations in Afghanistan and Iraq. Improved Tomahawks 
came into the inventory in 1993 and provided enhanced accuracy on 
targets. The newest variant, the Tactical Tomahawk (TACTOM), is 
scheduled to come into the inventory in 2005 and improves the missile 
with an upgraded guidance system and in-flight re-programming 
capability. This upgrade program is also expected to lower the 
missile's production unit and life-cycle support costs.

Marine Corps:

AH-1W Super Cobra Helicopter:

The AH-1W Super Cobra provides en route escort and protection of troop 
assault helicopters, landing zone preparation immediately prior to the 
arrival of assault helicopters, landing zone fire suppression during 
the assault phase, and fire support during ground escort operations. 
There are 193 aircraft in the inventory with an average age of 
12.6 years.

Figure 21: AH-1W Super Cobra Helicopter:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the AH-1W as yellow because it 
consistently failed to meet its mission capable goals from fiscal year 
1998 to fiscal year 2002. Although Camp Pendleton and Camp Lejeune 
AH-1W maintainers cited insufficient spare parts and cannibalization as 
problems, overall, operators were always positive in their comments 
about the condition of the AH-1W. Condition concerns will be remedied 
in the near term by the AH-1W upgrade program that is proceeding as 
scheduled with an October 1, 2003, anticipated start date.

Program Strategy: 

We assessed the program strategy for the AH-1W as green because the 
Marine Corps has developed a long-term program strategy for upgrading 
the AH-1W helicopter to the AH-1Z, achieving 85 percent commonality 
with the UH-1Y helicopter fleet. Estimated savings of $3 billion in 
operation and maintenance costs over the next 30 years have been 
reported. Additionally, the upgrade program will enhance the 
helicopter's speed, maneuverability, fuel capacity, ammunition 
capacity, and targeting systems.

Funding: 

We assessed the funding for the AH-1W as green because current and 
projected funding is consistent with the Marine Corps' stated 
requirements to sustain and upgrade the AH-1W fleet. Although we 
assessed funding as green, Marine Corps officials at Camp Pendleton 
cited the need for additional funding for spare parts and noted that 
cost overruns have occurred in recent years for the AH-1W upgrade 
program.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the AH-1W, Marine Corps officials indicated that 
it successfully fulfilled its recent wartime missions but with some 
limitations. Specifically, prior to Operation Iraqi Freedom, Marine 
Corps operators at Camp Pendleton stated that the AH-1W's ammunition 
and fuel capacity was insufficient for some operations, such as 
Afghanistan. The AH-1Z upgrade program, however, will address these 
concerns.

CH-46E Sea Knight Helicopter:

The Sea Knight helicopter provides all weather, day/night, night-vision 
capable assault transport of combat troops, supplies and equipment 
during amphibious and subsequent operations ashore. There are 226 
aircraft in the inventory. The CH-46E is more than 30 years old. The 
MV-22 Osprey is the planned replacement aircraft for the CH-46E.

Figure 22: CH-46E Sea Knight Helicopter:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the CH-46E as red because it consistently 
failed to meet mission capable goals between fiscal year 1998 and 
fiscal year 2002. The operational mean time between failures decreased 
from 1.295 hours to 0.62 hours during the course of our review. Marine 
Corps officials cited concern over the aircrafts age and the 
uncertainty about the fielding of the MV-22 to replace the Sea Knight. 
Marine Corps officials called the current maintenance programs critical 
to meeting condition requirements.

Program Strategy: 

We assessed the program strategy for the CH-46E as yellow because the 
Marine Corps has developed a long-term program strategy to sustain and 
replace the CH-46E fleet. The sustainment strategy, dated August 19, 
2003, outlines the service's plans to sustain the CH-46E until 
retirement in 2015 or longer. However, according to press reports, DOD 
has decided to reduce the purchase of replacement systems by about 8 to 
10 aircraft over the next few years. If DOD buys fewer replacement 
systems, the service will have to adjust the sustainment strategy to 
retain additional CH-46E aircraft in its inventory longer.

Funding: 

We assessed the funding for the CH-46E as red because current and 
projected funding is not consistent with the Marine Corps' stated 
requirements to sustain and replace the CH-46E fleet. Marine Corps 
officials asserted continued funding for maintaining the CH-46E is 
essential. The fiscal year 2004 budget request included a request for 
funding of safety improvement kits, long-range communications upgrade, 
aft transmission overhaul, and lightweight armor. The Navy lists CH-46E 
safety improvement kits as a $4 million unfunded requirement.[Footnote 
27]

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the CH-46E, Marine Corps raised a number of 
specific capability concerns. Specifically, these officials stated that 
the intended mission cannot be adequately accomplished due to lack of 
payload. The CH-46E has lost 1,622 pounds of lift since its fielding 
over 35 years ago due to increased weight and can only carry a 12-troop 
payload on a standard day. More recently, Marine Corps officials rated 
the performance of the CH-46E during Operation Iraqi Freedom as 
satisfactory despite these lift limitations.

Assault Amphibian Vehicle-Personnel (AAV):

The AAV is an armored, fully-tracked landing vehicle that carries 
troops in water operations from ship to shore through rough water and 
surf zone, or to inland objectives ashore. There are 1,057 vehicles in 
the inventory. The Marine Corps plans to replace the AAV with the 
Expeditionary Fighting Vehicle (formerly the AAAV--Advanced Amphibious 
Assault Vehicle).

Figure 23: Assault Amphibian Vehicle-Personnel:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the AAV as yellow because of its age and 
the fact that the Marine Corps plans to upgrade only 680 of the 1,057 
AAVs currently in the inventory.[Footnote 28] Furthermore, the planned 
upgrade program will only restore the vehicle to its original operating 
condition rather than upgrading it to perform beyond its original 
operating condition. We could not base our assessment of the condition 
on readiness rates in relation to the readiness rate goals because the 
Marine Corps did not provide sufficient trend data. Marine Corps 
officials at Pacific Command stated that the heavy usage of the AAV 
during Operation Iraqi Freedom and the long fielding schedule of the 
replacement vehicle present significant maintenance challenges. 
However, we assessed the condition yellow instead of red based on 
favorable comments about the current condition of the AAV from 
operators and maintainers.

Program Strategy: 

We assessed the program strategy for the AAV as yellow because the 
Marine Corps has developed a long-term program strategy for overhauling 
the AAV; however, the program only restores the vehicle to its original 
operating condition and does not upgrade the vehicles beyond original 
condition. The Marine Corps initiated a Reliability, Availability and 
Maintenance/Rebuild to Standard (RAM/RS) upgrade program in 1998 to 
restore capabilities and lengthen the expected service life of the AAV 
to sustain the vehicles until the replacement system, the Expeditionary 
Fighting Vehicle (formerly the Advanced Amphibious Assault Vehicle), 
can be fielded. The RAM/RS is expected to extend the AAV service life 
an additional 10 years.[Footnote 29] These vehicles will be needed 
until the replacement vehicles can be fielded in 2012. However, the 
procurement of the replacement vehicles has reportedly already been 
delayed by 2 years.

Funding: 

We assessed the funding for the AAV as yellow because current and 
projected funding is not consistent with the Marine Corps' requirements 
to upgrade the AAV inventory. Requested funding rose from $13.5 million 
in fiscal year 1998 to $84.5 million in fiscal year 1999 as the Marines 
initiated the RAM/RS program. The requested funding level declined to 
$66.2 million by fiscal year 2002. The Marine Corps identified a 
$48.9 million unfunded program in the fiscal year 2004 budget request 
to extend RAM/RS to more vehicles. Marine Corps officials are concerned 
reconstitution of the vehicles from Operation Iraqi Freedom will not 
include funding for vehicles returning from Operation Iraqi Freedom for 
the RAM/RS program.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the AAV, Marine Corps officials indicated that it 
has successfully fulfilled its wartime missions but with some 
limitations. While these officials cited the AAV as integral to ground 
operations during Operation Iraqi Freedom, they noted specific stresses 
placed on the vehicles. For example, AAVs deployed to Operation Iraqi 
Freedom traveled, on average, over 1,000 miles each, a majority of 
those miles under combat conditions. Those conditions added about 
5 years worth of miles and wear and tear to the vehicles over a 6-to 8-
week period. In addition, prior to Operation Iraqi Freedom, Marine 
Corps officials at Camp Lejeune highlighted problems they encountered 
with obtaining enhanced armor kits to protect the vehicles from the .50 
caliber ammunition that was used by Iraqi forces. At the time of our 
review, only 26 of 213 AAVs at Camp Lejeune had been provided the 
enhanced armor kits. Marine Corps officials at Camp Lejeune believed 
the lack of kits was due to insufficient funding.

Light Armored Vehicle-Command & Control (LAV-C2):

The LAV-C2 variant is a mobile command station providing field 
commanders with the communication resources to command and control 
Light Armored Reconnaissance (LAR) units. It is an all-terrain, all-
weather vehicle with night capabilities and can be made fully 
amphibious within three minutes. There are 50 vehicles in the inventory 
with an average age of 14 years.

Figure 24: Light Armored Vehicle-Command & Control:

[See PDF for image]

[End of figure]

Condition: 

We assessed the condition of the LAV-C2 as green because the Marine 
Corps has initiated a fleet-wide Service Life Extension Program (SLEP) 
to extend the service life of the vehicle from 20 years to 27 years. 
The LAV-C2 SLEP includes enhancements to communications capabilities. 
Marine Corps officials cautioned that any delays in SLEP could affect 
future readiness. While we assessed the condition as green, we noted 
the operational readiness rate for the command and control variant was 
90.5 percent, below the 100 percent goal but higher than the 
operational readiness rate of 85 percent for the entire fleet.

Program Strategy: 

We assessed the program strategy for the LAV-C2 as green because the 
Marine Corps has developed a long-term program strategy for upgrading 
the LAV-C2 inventory. The program funded in the current FYDP will 
enhance communications capabilities and power systems and may afford 
commonality with Unit Operation Center and helicopter systems. The 
Marines Corps intend for the upgraded LAV-C2 to provide a prototype to 
establish baseline requirements for future capabilities and a successor 
acquisition strategy. Marine Corps officials stated the C2 upgrade 
program needs to be supported at all levels.

Funding: 

We assessed the funding for the LAV-C2 as green because current and 
projected funding is consistent with Marine Corps stated requirements 
to upgrade the LAV-C2 inventory. Marine Corps officials have requested 
$72.2 million in the current FYDP to support major LAV-C2 technology 
upgrades. Marine Corps officials at Pacific Command recommended 
increased funding for procurement of additional vehicles, citing the 
current inventory deficiency as critical.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the LAV-C2, Marine Corps officials indicated that 
it has successfully fulfilled its recent wartime missions. Marine Corps 
reports regarding the operations in Afghanistan cited LAVs in general 
as the most capable and dependable mobility platform despite the fact 
that the number of available C-17 transport aircraft limited the 
deployment of the vehicles. Initial reports from Operation Iraqi 
Freedom also indicate that the LAV-C2 performed successfully.

AGM-65E Maverick Missile:

The Maverick missile is a precision-guided, air-to-ground missile 
configured primarily for the anti-tank and anti-ship roles. It is 
launched from a variety of fixed-wing aircraft and helicopters and 
there are laser and infrared-guided variants. The Maverick missile was 
first fielded in 1985.

Figure 25: AGM-65E Maverick Missile:

[See PDF for image]

[End of figure]

Condition:

N/A:

We assessed the condition of the Maverick missile as not applicable 
because the Marine Corps does not track readiness data such as mission 
capable or operational readiness rates for munitions as they do for 
aircraft or other equipment.

Program Strategy: 

We assessed the program strategy for the Maverick missile as green 
because the Marine Corps has developed a long-term program strategy for 
replacing the Maverick missile with more capable missiles. Maverick 
missile procurement ended in 1992 and the infrared variant will no 
longer be used in 2003. According to Marine Forces Pacific Command 
officials, a joint common missile is being developed and scheduled for 
initial operational capability in 2008. The new missile will be a 
successor to the Maverick, Hellfire, and TOW missiles. Marine Corps 
officials stated a joint reactive precision-guided munition for both 
fixed-and rotary-winged aircraft as a potential successor to Maverick 
and Hellfire missiles will be submitted to the Joint Requirements 
Oversight Committee for evaluation in fiscal year 2003.

Funding: 

We assessed the funding for the Maverick missile as green because 
current and projected funding is consistent with the Marine Corps' 
stated requirements to replace the Maverick missile inventory. Since 
fiscal year 1998, the Marine Corps limited funding for the Maverick to 
the operation and maintenance accounts.

Wartime Capability:

While we did not have sufficient data to definitively assess the 
wartime capability of the Maverick missile, Marine Corps officials 
indicated that it has successfully fulfilled its recent wartime 
missions but with some limitations. Specifically, these officials 
stated that the Maverick missile lacks an all-weather capability. 
Marine Corps officials cited increased risks due to sensor limitations 
of the laser variant that restricts the missile's use to low threat 
environments. Although the Maverick fulfilled its wartime mission 
during Operation Iraqi Freedom, Marine Corps officials stressed that 
its success was due to the fact that this was the optimal environment 
for the Maverick--desert environment and a lack of low cloud cover. In 
any other type of environment, however, the Maverick's use is limited.

[End of section]

Appendix III: Comments from the Department of Defense:

OFFICE OF THE UNDER SECRETARY OF DEFENSE:

3000 DEFENSE PENTAGON WASHINGTON, DC 20301-3000:

ACQUISITION, TECHNOLOGY AND LOGISTICS:

NOV 21 2003:

William M. Solis:

Director, Defense Capabilities and Management 
U.S. General Accounting office:

441 G Street, N.W. Washington, DC 20548:

Dear Mr. Solis:

This is the Department of Defense's (DoD) response to the GAO Draft 
Report, GAO-04-112, "MILITARY READINESS: DoD Needs to Reassess Program 
Strategy, Funding Priorities, and Risks for Selected Equipment" dated 
October 16, 2003 (GAO Code 350273).

The DoD partially concurs with one recommendation, and nonconcurs with 
two recommendations. Specific comments on each recommendation are 
attached. Comments regarding the assessments made in the appendices are 
also provided in the attachment.

My action officer for this review is Mr. Stan Azebu, (703) 697-1786, 
stan.azebu @osd.mil.

We appreciate the opportunity to comment on the draft report.

Sincerely,

Signed by: 

Nancy L. Spruill: 
Director, Acquisition Resources and Analysis:

Attachment: As Stated:

GAO DRAFT REPORT - DATED OCTOBER 16, 2003 GAO CODE 350273/GAO-04-112:

"MILITARY READINESS: DoD Needs to Reassess Program Strategy, Funding 
Priorities, and Risks for Selected Equipment":

DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense, in 
conjunction with the Secretaries of the Army, Navy, and Air Force, 
reassess the program strategies for equipment modernization and 
recapitalization, and reconcile those strategies with the Services' 
funding requests to ensure that key legacy equipment, especially those 
items needed to meet the strategy outlined in the September 2001 
Quadrennial Defense Review, are sustained until replacement equipment 
items can be fielded. (pgs. 22-23/GAO Draft Report):

DOD RESPONSE: Partially concur. Through the past Planning, Programming, 
and Budgeting System (PPBS) and the more current Planning, Programming, 
Budgeting and Execution (PPBE) processes, the Department had and 
continues to have an annual procedure to reassess program strategies to 
ensure equipment maintenance, modernization, and recapitalization 
funding supports the most recent Defense strategy. The PPBS/PPBE 
process ensures that, at the corporate Department of Defense level, the 
Future Years Defense Program developed each year balances operational, 
recapitalization/modernization, maintenance, manning, and facilities 
requirements in order to accomplish the national defense mission. While 
the overall strategy outlined in the September 2001 Quadrennial Defense 
Review may be unchanged, events over time may dictate changes in 
individual program priorities. This makes an annual reassessment a 
requirement in order to meet the most current threat.

RECOMMENDATION 2: In reconciling these program strategies to funding 
requests, the GAO recommended that the Secretary of Defense highlight 
for the Congress, in conjunction with the Department's Fiscal Year 2005 
budget submissions, the risks involved in sustaining key equipment 
items if adequate funding support is not requested and the steps the 
Department is taking to address those risks. (p. 23/GAO Draft Report):

DOD RESPONSE: Nonconcur. The annual Defense Budget represents a 
balanced program, within the resources available, as a result of the 
process described in the DoD response to Recommendation l. The draft 
report refers to instances where "...projected Department of Defense 
funding is not consistent with the services' stated requirements to 
support their program strategies..." It is important to note that a 
program manager's requirement is not always a valid requirement at the 
Service level. Likewise, a Service requirement may not be validated at 
the DoD level. If the requirement is validated, it is resolved at 
either the Service or OSD level before the next budget is submitted. 
The PPBE process results in a balanced program designed to accomplish 
the defense mission within the resources allocated. Therefore, the 
budget will request resources at an appropriate level for all 
programs, and all key equipment items will be funded within available 
resources.

RECOMMENDATION 3: As part of this process, the GAO recommended that the 
Department identify the key equipment items that, because of impaired 
conditions and their importance to meeting the Department's military 
strategies, should be given the highest priority for sustainment, 
recapitalization, modernization, or replacement. (p. 23/GAO Draft 
Report):

DOD RESPONSE: Nonconcur. DoD, in developing the annual Defense Budget, 
has already allocated resources according to its highest priorities. 
Key equipment items that are vital to accomplishing the Department's 
mission are allocated funding in order to meet the requirements of the 
most current defense strategy. There is no need to restate these 
priorities with a list. The budget documentation provides justification 
for the funding requests. If key equipment is impaired, that is part of 
the justification.

DRAFT LETTER TO REPRESENTATIVES SKELTON, MURTHA, AND DICKS: Page 6 
identifies the CH-47D, CH-46E, KC-135, EA-6B, Standard Missile-2, and 
the Tomahawk Missile as systems with problems and issues that warrant 
action within the next 1 to 3 years.

DOD RESPONSE: Within available resources, the Department has funded 
these programs at levels considered appropriate, given current and 
projected mission requirements. The Department will continue to 
reassess as we go through the resource allocation process.

DEPARTMENT OF DEFENSE COMMENTS ON SPECIFIC SERVICE FINDINGS:

Air Force - KC-135:

Appendix II, Page 51, "Program Strategy" GAO Report states: "The Air 
Force has embarked on a controversial, expensive program to replace the 
tanker fleet, but has not demonstrated the urgency of acquiring 
replacement aircraft, and has not defined the requirements for the 
number of aircraft that will be needed. Neither has the Air Force 
analyzed alternatives, such as retiring without replacing the E models 
that appear to be the center of its concerns.

Air Force Response: The GAO report does not reflect the latest 
information produced by the Air Force. The KC-135E Business Case 
Analysis (BCA), which came out in May of 2003, details the problems 
with the E-models and why it is imperative that the AF begin replacing 
this 43 year-old weapon system. The USAF realized that, historically, 
based on the projected 2004 rates, the annual KC-135 depot price per 
aircraft grew by 18% compounded annually since 1991, and fleet 
availability decreased by 1% per year. The combination of increasing 
costs and decreasing availability in the future compels the USAF to act 
now to balance cost, capability, risk, and recapitalization of the KC-
135 fleet.

The TRS-05 (which is classified) does indeed give guidance regarding 
how many tankers are needed to support projected operations, this 
number is a range but it is based on historical data and forecast 
requirements.

GAO Report states: "The Air Force has a large fleet of KC-135s (about 
545), which were flown about 300 hours annually between 1995 and 
September 2001. Since then utilization is about 435 hours per year, and 
has a shortage of aircrews to fly the aircraft it has. In Operation 
Iraqi Freedom, a relatively small part of the fleet was used to support 
the conflict (149 aircraft).":

Air Force Response: The study states that only 149 aircraft were 
required for Iraqi Freedom. They do not take into account the large 
number of aircraft committed to other requirements; Homeland Defense, 
Afghanistan, AEF, Airbridge etc.

Appendix II, Page 51, "Funding" . GAO Report States: "The Air Force has 
not addressed recapitalization funding in the current budget or in the 
Future Years Defense Plan. The Air Force plans to begin acquiring new 
aircraft almost immediately, but doesn't want to divert funding from 
other programs to pay for them. The Air Force proposed a unique leasing 
arrangement with Boeing that will provide new tankers as early as 2006. 
There remains controversy over the lease terms, aircraft pricing, and 
how the lease will be paid for.

Air Force Response: Funding for tanker recapitalization was included in 
the FY03 APOM; originally, funding would only have delivered one 
aircraft by the end of FY09. The lease proposal utilizes the previously 
identified procurement funding and rearranges other Air Force programs 
to deliver 60 aircraft in the same timeframe. The KC-767A proposal is 
only the first step in a comprehensive, long-term tanker 
recapitalization plan that is currently under revision.

Marine Corps - Assault Amphibian Vehicle:

Appendix II Page 74, "Condition". The GAO Report states: "We assessed 
the condition of the AAV as yellow because of its age and the fact that 
the Marine Corps plans to upgrade only 680 of the 1,057 AAVs currently 
in the inventory. Furthermore, the planned upgrade program will only 
restore the vehicle to its original operating condition rather than 
upgrading it to perform beyond its original operating condition.":

Marine Corps Comments: The Reliability, Availability, Maintainability / 
Rebuild-to-Standard (RAM/RS) program is intended to restore the vehicle 
to original specifications and addresses three of the top five cost 
drivers associated with supporting the aging fleet of vehicles. 
Initially the office of the Program Manager for Assault Amphibious 
Vehicle Systems (PM AAVS) planned to upgrade only 680 vehicles out of 
the 1,057 vehicle Approved Acquisition Objective (AAO). However, the 
Marine Requirements Oversight Council recommended that the RAM/RS 
production remain open beyond the planned completion of FY2003 based 
upon RAM/RS performance in Operation Iraqi Freedom (OIF) and OIF 
reconstitution decisions. PM AAVS now plans to upgrade a total of 1,007 
vehicles to RAM/RS configuration assuming funding is provided.

As a result of the wear and tear from OIF, short-term readiness 
challenges exist. It is expected that readiness will gradually improve 
over the coming months and should greatly improve once fielding of RAM/
RS vehicles above the initial 680 resumes in October 2004. 
Additionally, PM AAVS has an $11M/year Modification Kits line that 
addresses vehicle modifications to meet emergent requirements and 
potentially addresses readiness issues.

Appendix II Page 74, "Program Strategy". The GAO Report states: The 
Marine Corps initiated a RAM/RS upgrade program in 1998 to restore 
capabilities and lengthen the expected service life of the AAV to 
sustain the vehicles until the replacement system, the Expeditionary 
Fighting Vehicle, can be fielded. The RAM/RS is expected to extend the 
AAV service life an additional 10 years. These vehicles will be needed 
until the replacement vehicles can be fielded in 2012. However, the 
procurement of the replacement vehicles has already been delayed by 2 
years.":

Marine Corps Comments: The RAM/RS program is intended to address top 
fleet cost drivers for the AAV and to restore the vehicle to its 
original specifications. The RAM/RS program is expected to extend the 
service life an additional 20 years to the exit date of 2018, which 
coincides with EFV Full Operational Capability (FOC). The program 
strategy for support to the AAV Family of Vehicles (FOV) also includes 
utilizing the funding in the Mod Kit line to address emerging 
requirements with engineering changes and modifications. Additionally, 
PM AAVS is exploring potential capability improvements to the AAV in 
the event Marine Corps decisions result in an extension of the vehicle 
service life.

Appendix II, Page 74, "Funding". The GAO Report states, "We assessed 
the funding for the AAV as yellow because current and projected funding 
is not consistent with the Marine Corps' stated requirements to upgrade 
the AAV inventory.":

Marine Corps Comments: It is not clear what is meant by "the Marine 
Corps' stated requirement to upgrade the AAV inventory". As part of the 
approval of the RAM/RS program as an acquisition program, it was 
determined that the AAO for RAM/RS should be 1,057 vehicles instead of 
the 1,322 vehicles in the inventory at that time. The Marine Corps 
decided to limit the approved procurement quantity to 680 vehicles, 
which left the 327 vehicles on MPF and 50 other General Support 
vehicles in non-RAM/RS configuration. The RAM/RS program was fully 
funded for 680 vehicles. The funding level decreased from FY 1999-
FY2002 because of the expected learning curve in the production 
process. Cost increases resulted in the program being extended an 
additional year such that PM AAVS was funded $53.9M in FY2003 to 
upgrade 85 vehicles to complete the original 680.

During PR05, PM AAVS received $49.9M for the upgrade of 60 vehicles in 
FY2005. OIF supplemental funding (FY2003) provided $56.9M for RAM/RS 
upgrades and restoration of war-damaged vehicles. Of the $56.9M, PM 
AAVS plans to upgrade 60 vehicles in FY2004. Finally, a $14.25M FY2004 
Congressional Plus-up was authorized for PM AAVS to upgrade an 
additional 28 vehicles in FY2004. The total number of vehicles funded 
with FY2003 (supplemental), FY2004, and FY2005 funding is 148. The 
remaining 179 vehicles of the 327 to reach 1,007 RAM/RS will be 
addressed in constructing the President's FY 2006 budget.

Appendix 11, Page 75, "Wartime Capability".

Marine Corps Comments: The lack of Enhanced Appliqué Armor Kits (EAAK) 
during OIF was not a result of insufficient procurement funding for PM 
AAVS. EAAK was originally procured in 1992 to outfit every vehicle. 
Over the years EAAK sets have been washed out due to attrition without 
replenishment. In 1998, the EAAK was designated as a Special Mission 
Kit to be mounted at the discretion of commanders. The priority for 
EAAK has been for all vehicles in the forward deployed pre-positioned 
forces and the deploying Marine Expeditionary Units (MEUs).

During OIF, all the pre-positioned AAVs from the MPF ships and all the 
MEU AAVs had EAAK mounted. Of the approximately 600 AAVs deployed in 
OIF, about half had EAAK mounted. Currently, the PM AAVS is procuring 
additional sets of EAAK with the goal to have EAAK available for every 
AAV in the operating forces. This procurement started prior to OIF and 
will continue through FY2006/2007.

Navy - MV-22:

Page 16, Paragraph 2: The MV-22 is scheduled to replace both the Marine 
Corps CH-46 and CH-53D aircraft, not just the CH-46's.

SPECIFIC COMMENTS:

Page 16, paragraph 2, "DOD has also cut the number of replacement 
aircraft it plans to purchase by 8 to 10 per year, . . .":

Navy Comment: This statement is not accurate. The V-22 Program of 
Record production rates begin to increase in FY06. The following 
applies: FY06 - 17, FY08 - 26, FY09 - 39, and FY 10 (and out) - 48.

Navy - Tomahawk Cruise Missile:

Appendix II, Page 69, General Comments Regarding Tomahawk.

Navy Comment: The overarching theme of the Tomahawk section of this 
report concerns Tomahawk inventory and the number of missiles required 
to fulfill the combatant commanders needs. OPNAV has the primary 
responsibility to determine this requirement, based on input from the 
combatant commanders, target sets, war plans, and available budget and 
acquisition strategy.

The Tomahawk program strategy is structured to provide the fleet with 
sufficient numbers of Tomahawk missiles to meet their requirements by:

1. Completing the existing remanufactured missile program.

2. IOC Block IV (Tactical Tomahawk) and accelerate Block IV deliveries 
to the maximum extent possible.

3. Maximize RFI inventory of currently fielded Block III missiles.

Specific Comments:

Appendix II, Page 69, paragraph 3: "During Operation Iraqi Freedom, 788 
Tomahawks were expended with a remaining inventory of 1,474. The 
replenishment missiles are all programmed to be the new Tactical 
Tomahawk missile. Even when funding is appropriated and executed this 
fiscal year, the first available date for new missiles entering the 
inventory will be late 2005-2006.":

Navy Comments: The Program office does not concur with the program 
strategy assessment as "Red". This paragraph should read:

"We assessed the program strategy for the Tomahawk Cruise Missile as 
yellow because the Navy has developed a long-term program strategy for 
upgrading the Tomahawk Cruise Missile inventory; however, the future 
inventory level will not be determined until funding 
questions are resolved. During Operation Iraqi Freedom, 789 Tomahawks 
were expended with a remaining inventory of 1474. A second of two 
remanufacturing programs was funded in FY2002 to upgrade the 
capabilities on 454 older missiles to Block III capability. Two-hundred 
nineteen (219) remanufactured missiles have been delivered as of 01 
October 2003, 178 of which were delivered ahead of contract schedule. 
Two-hundred thirty-five (235) missiles remain to be delivered under the 
current remanufacture contract and are scheduled to complete by CY2004. 
Additional replenishment missiles are all programmed to be the new 
Tactical Tomahawk missile. Tactical Tomahawk entered into Low Rate 
Initial Production (LRIP) in FY2002, with 192 missiles currently on 
production contract. The Tactical Tomahawk Program has completed 
TECHEVAL, with eight successful test shots in eight attempts. OPEVAL is 
currently scheduled to begin in December 2003. Tactical Tomahawk is on 
schedule to realize initial operational capability (IOC) in May 2004. 
The Program Strategy is sound and consistent with the dynamic nature of 
the use of the weapon - use of all available appropriated funds to 
replenish inventory in the shortest possible time to meet the needs of 
the combatant commanders.":

Please note: 789 Tomahawks were expended by the United States Navy; 
current inventory is 1474 Block III missiles; and the follow-on 
Tactical Tomahawk (TACTOM) is scheduled to enter the inventory in 2004.

Additionally, the "Program Strategy" paragraph is missing several 
facts:

* Remanufacture programs, 1,078 missiles, deliveries through CY2004.

* Block IV LRIP I and II on contract, 192 missiles (FY02 - 03 funds), 
deliveries May 04 through Aug 05.

* Block IV LRIP III, in negotiations, est 183 missiles (IFF supplemental 
funds), deliveries starting FY2005.

* Block IV FRP, in negotiations, est 1,903 missiles (FY04 - 08 funds), 
deliveries starting FY2005.

Appendix II, Page 69, "Funding".

Navy Comments: The Program Office does not concur with the funding 
assessment as "Red". The paragraph should read, "We assessed the 
funding for the Tomahawk Cruise Missile as yellow because current and 
projected funding is not consistent with the Navy's stated requirements 
to replenish the inventory. The Congress provided an additional $217M 
of FY2003 supplemental funding in August 2003 to procure 183 missiles 
and increase production capacity. The Congress provided additional 
funding above the budget request for FY2004 to increase production 
quantity, and multi-year procurement authority as requested by the Navy 
to ensure production for the next five years.":

Appendix II, Page 69, paragraph 4: "Improved Tomahawks came into the 
inventory in 1994 and provided enhanced accuracy on targets.":

Navy Comments: This paragraph should state, "Improved Tomahawks came 
into the inventory in 1993 and provided enhanced accuracy on targets.":

Navy - CH-46E Sea Knight Helicopter.:

Appendix II, Page 72, "Wartime Capability": "The Navy lists CH-46E 
safety improvement kits as a $ 4 million unfunded requirement.":

Navy Comments: Recommend changing the sentence to read, "At present the 
Navy lists CH-46E safety improvements as an unfunded requirement of 
$10-14M based upon the retirement schedule of the CH-46E and fielding 
schedule of the MV-22.":

[End of section]

Appendix IV: GAO Contact and Staff Acknowledgments:

GAO Contact:

David A. Schmitt (757) 552-8124:

Acknowledgments:

In addition to the individual named above, Richard Payne, Donna Rogers, 
Jim Mahaffey, Patricia Albritton, Tracy Whitaker, Leslie Harmonson, 
John Beauchamp, Warren Lowman, Ricardo Marquez, Jason Venner, Stanley 
Kostyla, Susan Woodward, and Jane Lusby made key contributions to this 
report.

(350273):

FOOTNOTES

[1] Congressional Budget Office, The Long-Term Implications of Current 
Defense Plans: Summary Update for Fiscal Year 2004 (Washington, D.C.: 
July 2003).

[2] Modernizing refers to upgrading equipment items or replacing 
specific parts; replacing refers to complete replacement of one 
equipment item with a new equipment item, e.g., the Marine Corps plans 
to replace the CH-46E helicopter with the MV-22 Osprey.

[3] The 25 equipment items we selected for review include 7 Army 
equipment items, 6 Air Force equipment items, 7 Navy equipment items, 
and 5 Marine Corps equipment items.

[4] Mission capable rates are measures of aircraft material condition 
that indicate the aircraft can perform at least one and potentially all 
of its designated missions.

[5] Utilization rates refer to flying hours, tank miles, and steaming 
days.

[6] Our scope was limited to one combatant command, Pacific Command, 
due to the remaining combatant commands' participation in Operation 
Iraqi Freedom.

[7] U.S. General Accounting Office, Military Aircraft: Observations on 
the Air Force's Plan to Lease Aerial Refueling Aircraft, GAO-03-1143T 
(Washington, D.C.: Sept. 3, 2003).

[8] In its written comments on a draft of this report, the department 
stated that they plan to upgrade an additional 327 vehicles for a total 
of 1,007 vehicles, assuming funding is provided.

[9] In its written comments on a draft of this report, department 
officials stated that the Navy lists CH-46E safety improvements as an 
unfunded requirement of $10 million to $14 million based upon the 
retirement schedule of the CH-46E and the fielding schedule of the MV-
22 replacement.

[10] Force structure includes 10 active and 8 reserve Army divisions, 
12 Navy Carrier Battle Groups and 10 active and 1 reserve Carrier Air 
Wing, 3 active and 1 reserve Marine Expeditionary Force, 12 active and 
7 reserve Air Force Fighter Wings, and 112 combat-coded heavy bombers.

[11] Quadrennial Defense Review Report (Washington, D.C.: Sept. 30, 
2001).

[12] U.S. General Accounting Office, Military Aircraft: Services Need 
Strategies to Reduce Cannibalizations, GAO-02-86 (Washington, D.C.: 
Nov. 21, 2001); Military Aircraft: Cannibalizations Adversely Affect 
Personnel and Maintenance, GAO-01-93T (Washington, D.C.: May 22, 2001).

[13] Operational readiness refers to the capability of equipment items 
other than aircraft to perform the missions or functions for which it 
is organized or designed and may be used in general terms to express a 
level or degree of readiness.

[14] However, the services do not use a uniform methodology to 
calculate average age.

[15] U.S. General Accounting Office, Defense Inventory: The Army Needs 
a Plan to Overcome Critical Spare Parts Shortages, GAO-03-705 
(Washington, D.C.: June 27, 2003); Defense Inventory: Air Force Plans 
and Initiatives to Mitigate Spare Parts Shortages Need Better 
Implementation, GAO-03-706 (Washington, D.C.: June 27, 2003); Defense 
Inventory: The Department Needs a Focused Effort to Overcome Critical 
Spare Parts Shortages, GAO-03-707 (Washington, D.C.: June 27, 2003); 
Defense Inventory: Navy Logistics Strategy and Initiatives Need to 
Address Spare Parts Shortages, GAO-03-708 (Washington, D.C.: June 27, 
2003); and Defense Inventory: Several Actions Are Needed to Further 
DLA's Efforts to Mitigate Shortages of Critical Parts, GAO-03-709 
(Washington, D.C.: August 31, 2003); and Defense Inventory: 
Opportunities Exist to Improve Spare Parts Support Aboard Deployed Navy 
Ships, GAO-03-887 (Washington, D.C.: Aug. 29, 2003).

[16] U.S. General Accounting Office, Defense Inventory: Opportunities 
to Reduce Corrosion Costs and Increase Readiness, GAO-03-753 
(Washington, D.C.; July 7, 2003).

[17] U.S. General Accounting Office, DOD Civilian Personnel: Improved 
Strategic Planning Needed to Help Ensure Viability of DOD's Civilian 
Industrial Workforce, GAO-03-472 (Washington, D.C.; Apr. 30, 2003).

[18] U.S. General Accounting Office, Military Aircraft: Observations on 
the Air Force's Plan to Lease Aerial Refueling Aircraft, GAO-03-1143T 
(Washington, D.C.: Sept. 3, 2003).

[19] Public Law 105-56, title VIII, section 8053; Oct. 8, 1997; 111 
Stat. 1232.

[20] In its written comments on a draft of this report, department 
officials stated that they plan to upgrade an additional 327 vehicles 
for a total of 1,007 vehicles, assuming funding is provided. They have 
received funding through fiscal year 2003 supplemental funding, a 
fiscal year 2004 congressional plus-up, and fiscal year 2005 funding to 
upgrade 148 vehicles and plan to address the remaining 179 vehicles in 
a fiscal year 2006 Program Objective Memorandum.

[21] We did not independently verify the services' stated requirements.

[22] U.S. General Accounting Office, Defense Budget: DOD Should Further 
Improve Visibility and Accountability of O&M Fund Movements, GAO/NSIAD-
00-18 (Washington, D.C. Feb. 9, 2002).

[23] Legacy systems are equipment items whose critical functionality 
will be subsumed by a new system and is scheduled for termination. The 
Stryker, Patriot, and Guided Multiple Launch Rocket System are not 
legacy equipment items.

[24] Operating and support costs or total life-cycle costs are the 
total costs of acquiring and owning a weapon or materiel system over 
its full life, including development, procurement, operation, support, 
and disposal. About 60 percent of O&S funding is appropriated to the 
operation and maintenance accounts that pay for spare and repair parts.

[25] U.S. General Accounting Office, Military Aircraft: Information on 
Air Force Aerial Refueling Tankers, GAO-03-938T (Washington, D.C.: June 
4, 2003).

[26] In its written comments on a draft of this report, DOD stated that 
the Tactical Tomahawk is scheduled to enter the inventory in 2004 with 
initial operational capability in May 2004.

[27] In its written comments on a draft of this report, DOD stated that 
the Navy lists CH-46E safety improvements as an unfunded requirement of 
$10 million to $14 million based upon the retirement schedule of the 
CH-46E and the fielding schedule of the MV-22 replacement.

[28] In its written comments on a draft of this report, DOD stated that 
the Marine Corps plans to upgrade 1,007 vehicles, an additional 327 
vehicles, assuming funding is provided. The AAV program received 
funding for 148 vehicles through the fiscal year 2003 Operation Iraqi 
Freedom supplemental, a fiscal year 2004 congressional plus-up, and 
fiscal year 2005 funding. DOD also stated that the Marine Corps plans 
to address the remaining 179 vehicles in a fiscal year 2006 Program 
Objective Memorandum initiative to upgrade 90 vehicles in fiscal year 
2006 and 89 vehicles in fiscal year 2007. 

[29] In its written comments on a draft of this report, DOD officials 
stated that the RAM/RS program is expected to extend the service life 
an additional 20 years to the exit date of 2018.