Defense Logistics: Better Management and Oversight of Prepositioning Programs Needed to Reduce Risk and Improve Future Programs

GAO-05-427 Published: Sep 06, 2005. Publicly Released: Oct 05, 2005.
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Highlights

The importance of prepositioned stocks to the U.S. military was highlighted during recent operations in Iraq, as much of the equipment and supplies stored at land sites in the region and aboard prepositioning ships were used to support operations. Long-standing problems in the Department of Defense's (DOD) prepositioning program are systematic of the inventory management issues, and more recently supply chain management issues, that GAO has considered as high-risk areas since 1990. GAO was asked to review the risks facing DOD's prepositioning programs, including an assessment of (1) the near-term operational risk given the continuing use of these stocks, (2) the sufficiency of DOD and service-level oversight of these prepositioning programs, and (3) whether DOD has developed a coordinated plan for the future of the department's prepositioning programs that would meet the goals of the recently published defense strategy.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To address the risks and management challenges facing the department's prepositioning programs and improve oversight, the Secretary of Defense should direct the Chairman, Joint Chiefs of Staff, to assess the near-term operational risks associated with current inventory shortfalls and equipment in poor condition should a conflict arise.
Closed – Implemented
The Joint Staff conducted a mission analysis on several operational plans based on the readiness of prepositioned assets in order to determine near-term operational risk. The mission analysis resulted in a risk assessment that was briefed to the Joint Chiefs of Staff leadership. Results of this assessment, which are classified, are being addressed through coordinated efforts of the military services and the combatant commands.
Department of Defense To address the risks and management challenges facing the department's prepositioning programs and improve oversight, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics to provide oversight over the department's prepositioning programs by fully implementing the department's directive on war reserve materiel and, if necessary, revise the directive to clarify the lines of accountability for this oversight.
Closed – Implemented
On June 23, 2008, the Under Secretary of Defense for Acquisition, Technology, and Logistics took action and published a revised instruction on war reserve materiel. This instruction establishes a Global Prepositioned Materiel Working Group that includes representatives from the Under Secretary of Defense for Personnel and Readiness, the Director of Program Analysis and Evaluation, the military services, and the Defense Logistics Agency. As a result, this group will provide accountability for oversight of the department's prepositioning programs by assessing the combatant commands' ability to meet the Secretary of Defense's "Guidance to Develop the Force"; address joint issues concerning war reserve materiel requirements, war reserve determination, and war reserve materiel positioning; review risk assessments provided by the military departments and the Defense Logistics Agency; and make recommendations that balance limited resources against operational risk.
Department of Defense To address the risks and management challenges facing the department's prepositioning programs and improve oversight, the Secretary of Defense should direct the Secretary of the Army to improve the processes used to determine requirements and direct the Secretary of the Army and Air Force to improve the processes used to determine the reliability of inventory data so that the readiness of their prepositioning programs can be reliably assessed and proper oversight over the programs can be accomplished.
Closed – Implemented
DOD generally agreed with this recommendation and stated that the Army War Reserve Automated Process (AWRAP) used to compute the Army's Prepositioned Stocks WRSI requirements was scheduled to be completed by November 15, 2005. AWRAP was completed in October 2005 and that data was used to build FY 08-13 POM funding requirements. In the Air Force, the BEAR Base Reconstitution and Management System (BBRAMS) is being designed to improve the operational efficiency in Air Force BEAR base systems operations. Full fielding was scheduled to begin in January 2006. While BBRAMS was fielded in 2006, software enhancements were required to achieve full fielding. A new initiative, the Air Force Expeditionary Combat Support System (ECSS), took the place of BBRAMS in order to automate the readiness reporting process of critical war reserve materiel assets. ECSS full operating capability will not be until 2013, but a number of interim solutions have been developed and implemented. Oversight and assessment of the readiness of the services' prepositioned programs is now accomplished as part of an annual review by GAO. The National Defense Authorization Act for Fiscal Year 2008 (NDAA) added an annual reporting requirement to Title 10 of the United States Code directing DOD to submit a report to the congressional defense committees on the status of prepositioned materiel and equipment as of the end of each fiscal year, no later than the date of the submission of the President's annual budget requests. The report is required to address the following six elements: (1) the level of fill for major end items of equipment and spare parts, (2) the materiel condition of equipment in the prepositioned stocks, (3) a list of major end items drawn from prepositioned stocks that fiscal year and a description of how the equipment was used and whether it was returned to the stocks after its use, (4) a timeline for completely reconstituting any shortfall in the prepositioned stocks, (5) an estimate of the funding required to completely reconstitute any shortfall in the prepositioned stocks and a description of the Secretary?s plan for carrying out the reconstitution, and (6) a list of any operations plans affected by a shortfall in the prepositioned stocks and a description of the action taken to mitigate any risk created by that shortfall. The annual reporting requirement directs GAO to review DOD's annual reports and submit to the congressional defense committees any additional information that will further inform such committees on issues relating to the status of the materiel in prepositioned stocks no later than 120 days after the date on which DOD submits its report to Congress.
Department of Defense To address the risks and management challenges facing the department's prepositioning programs and improve oversight, the Secretary of Defense should develop a coordinated departmentwide plan and joint doctrine for the department's prepositioning programs that identifies the role of prepositioning in the transformed military and ensures these programs will operate jointly, support the needs of the war fighter, and are affordable.
Closed – Implemented
DOD generally agreed with this recommendation and stated that they are providing a coordinated response to the National Defense Authorization Act of FY 2005 that will assess programs of the military services for prepositioning of materiel and equipment, with a focus on how these programs will support the goal of the Secretary to have the capability, from the onset of a contingency situation, to deploy forces to a distant theater within 10 days, defeat an enemy within 30 days, and be ready for an additional conflict within another 30 days. This assessment will include a review of prepositioned materiel and equipment used in OIF and OEF, a description of changes to doctrine, strategy, and transportation plans needed, a description of modifications to prepositioned programs that could be required, and a discussion of joint operations and training that support force requirements. This assessment addresses this recommendation and was to be submitted to Congress not later that October 1, 2005. Upon completion of the assessment, management will determine if any additional changes are required to DOD directives or joint doctrine. DOD has completed two interim reports to Congress that covered a portion of the above requirements. Two studies were scheduled to allow DOD to fully address the rest of the requirements. One of the two analytical studies, the Operational Availability Analysis, was completed, and the other study, the Mobility Capabilities and Requirements Study 2016, will release initial results in May 2009. During the course of our work on GAO's annual reporting requirement on the status of prepositioned materiel and equipment introduced in the National Defense Authorization Act for Fiscal Year 2008, DOD officials stated that in response to recommendations to develop a coordinated departmentwide prepositioning strategic policy, they established the Global Prepositioned Materiel Capabilities Working Group in June 2008, to address joint issues on prepositioned materiel and equipment. This group has shared best practices and will be the voice of the preposition system to ensure changes can be made easily, while synchronizing the department's prepositioned stock programs.
Department of Defense To address the risks and management challenges facing the department's prepositioning programs and improve oversight, the Secretary of Defense should report to Congress, possibly as part of the mandated October 2005 report, how the department plans to manage the near-term operational risks created by inventory shortfalls and management and oversight issues described in this report.
Closed – Implemented
The Department of Defense (DOD) submitted a report to Congress titled "Report on Status of Department of Defense Programs for Prepositioning of War Reserve Materiel" on July 7, 2008. The department's report presents and discusses the status of prepositioning capabilities and materiel to include a classified supplement that discusses the operation plans affected by prepositioned materiel shortfalls and actions the department is taking to mitigate those effects. As a result, by submitting the report, the department has provided Congress with better information on how the department plans to take actions to mitigate the effect of inventory shortfalls, which could create near-term operational risk.

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