European Reassurance Initiative:
DOD Needs to Prioritize Posture Initiatives and Plan for and Report their Future Cost
GAO-18-128: Published: Dec 8, 2017. Publicly Released: Dec 8, 2017.
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What GAO Found
Since 2014, the Department of Defense (DOD) has expanded the European Reassurance Initiative's (ERI) objectives, increased its funding, and planned enhancements to European posture. DOD expanded ERI's objectives from the short-term reassurance of allies and partners to include deterring Russian aggression in the long term and developing the capacity to field a credible combined force should deterrence fail. With respect to funding, DOD will have requested approximately $4.5 billion for ERI's posture enhancements through the end of fiscal year 2017 (about $3.2 billion for fiscal year 2017 alone), and in July 2016 EUCOM identified funding needs for future posture initiatives. The expansion of ERI's objectives has contributed to DOD's enhancing its posture in Europe. Specifically, DOD has increased the size and duration of Army combat unit deployments, planned to preposition Army equipment in Eastern Europe, added new enduring locations (e.g., locations that DOD expects to access and use to support U.S. security interests for the foreseeable future), improved infrastructure, and negotiated new agreements with European nations. As of April 2017, DOD was considering further force enhancements under ERI as part of the department's ERI budget request. DOD also was reviewing whether new enduring locations to support ERI were needed and was considering other improvements to existing infrastructure.
DOD's process for planning ERI has not established priorities among posture initiatives funded under ERI relative to those in its base budget, nor estimated long-term sustainment costs for some posture initiatives funded under ERI, nor communicated future costs to Congress. ERI is being planned using a separate process from DOD's established processes and is funded from DOD's overseas contingency operations (OCO) appropriations. GAO found several weaknesses:
- Lack of prioritization: DOD establishes priorities among ERI posture initiatives but has not evaluated them against base budget initiatives using its posture management process. As a result, DOD lacks an understanding of the relative importance of ERI initiatives and may be investing in projects that it will not continue should OCO funding become unavailable.
- Lack of sustainment costs: EUCOM and the military services have not fully estimated the long-term costs to sustain equipment and construction funded under ERI. Based on DOD's approach for calculating rough order sustainment costs, GAO determined that these costs could be substantial. DOD officials said that GAO correctly applied DOD's approach for estimating sustainment costs, but noted that actual costs may be lower, because the military services may not fully fund sustainment. In the absence of comprehensive estimates, DOD has been limited in its ability to assess affordability and plan for future costs.
- Not communicating future costs: DOD limits Congress's visibility into the resources needed to implement ERI and achieve its objectives because it does not include future costs in its ERI budget request.
This is a public version of a classified report issued in August 2017. Information on specific posture planning, guidance, and budget estimates that DOD deemed to be classified have been omitted from this report.
Why GAO Did This Study
In response to Russia's annexation of Crimea in March 2014, the President announced the ERI, to reassure allies in Europe of U.S. commitment to their security. This initiative has been funded using OCO appropriations, which Congress provides in addition to DOD's base budget appropriations.
The Joint Explanatory Statement accompanying the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, included a provision for GAO to review matters related to ERI. In this report, we (1) describe changes in ERI's objectives, funding under ERI, and DOD's posture in Europe since 2014 and (2) evaluate the extent to which DOD's planning processes for posture initiatives funded under ERI prioritize those initiatives, estimate their long-term costs, and communicate their estimated costs to Congress. GAO analyzed DOD strategy documentation, budget and cost analysis guidance, budget justification materials, and cost and obligations data. GAO also interviewed knowledgeable officials within the Office of the Secretary of Defense, U.S. European Command, the military services, and the State Department.
What GAO Recommends
GAO recommends that DOD prioritize ERI posture initiatives against initiatives in its base budget, develop cost estimates for sustaining initiatives, and communicate future costs to Congress. DOD partially concurred with GAO's recommendations. GAO continues to believe that these recommendations are warranted.
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Recommendations for Executive Action
Comments: DOD partially concurred with this recommendation, stating that it will continue to prioritize the negotiation of international agreements through the Global Posture Executive Council, and that an on-going Strategic Review will inform and guide both U.S. European Command and the services in their program planning efforts. However, DOD also stated it will continue to adjudicate its ERI-funded force requirements through its global force management process so long as the initiative is funded through overseas contingency operations appropriations. In response to our inquiries, in April 2018, DOD officials stated their commitment to addressing this recommendation, but could not report that DOD had taken further actions to do so.
Recommendation: To better ensure that DOD can target resources to its most critical initiatives and establish priorities across its base budget and overseas contingency operations budget, we recommend that the Secretary of Defense prioritize posture initiatives under ERI relative to those funded in its base budget as part of its established posture-planning processes. (Recommendation 1)
Agency Affected: Department of Defense
Comments: DOD partially concurred with this recommendation, stating that its components will continue to estimate the sustainment costs for prepositioned stocks and other infrastructure projects during DOD's annual program and budget review process, but adding that without additional topline base budget funding, some portion of the associated sustainment costs will need to be financed with OCO funds. In response to our inquiries, as of April 2018, DOD officials said that they remain committed to addressing this recommendation, but could not report specific actions to do so.
Recommendation: To better enable decision makers to evaluate the full long-term costs of posture initiatives under ERI, we recommend that the Secretary of Defense direct EUCOM and the military services to develop estimates for the sustainment costs of prepositioned equipment and other infrastructure projects under ERI and ensure that the services plan for these long-term costs in future budgets. (Recommendation 2)
Agency Affected: Department of Defense
Comments: DOD partially concurred with this recommendation, stating that it factors in host nation support and burden sharing when preparing budget estimates for Congress, but does not currently prepare a formal 5-year Future Years Defense Program for OCO-related costs. Moreover, DOD did not indicate whether it will begin to provide Congress future estimates and any underlying assumptions with its budget submission. In response to our inquiries, as of April 2018, DOD officials stated that DOD was committed to addressing this recommendation, but could not report further actions that do so.
Recommendation: To support congressional decision making, we recommend that the Secretary of Defense provide to Congress, along with the department's annual budget submission, estimates of the future costs for posture initiatives funded under ERI and other enduring costs that include assumptions such as those pertaining to the level of host nation support and burden sharing. (Recommendation 3)
Agency Affected: Department of Defense