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Highlights

With continued heavy military involvement in operations in Iraq and Afghanistan, the Department of Defense (DOD) is spending billions of dollars sustaining or replacing its inventory of key equipment items while also planning to spend billions of dollars to develop and procure new systems to transform the department's warfighting capabilities. GAO developed a red, yellow, green assessment framework to (1) assess the condition of 30 selected equipment items from across the four military services, and (2) determine the extent to which DOD has identified near- and long-term program strategies and funding plans to ensure that these items can meet defense requirements. GAO selected these items based on input from the military services, congressional committees, and our prior work. These 30 equipment items included 18 items that were first assessed in GAO's 2003 report.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To ensure that DOD can sustain key equipment items to meet future equipment requirements and to provide greater visibility over key equipment items to Congress, the Secretary of Defense, after the department completes its Quadrennial Defense Review, should, in consultation with the Secretaries of the Military Services, reassess the near- and long-term program strategies for sustaining and modernizing key equipment, particularly those items not covered by 10 U.S.C. 2437, to ensure that the plans are complete and that the items are sustainable until they reach the end of their serviceable life or a replacement system is fielded. Specifically, this reassessment should: (1) detail the strategies to sustain and modernize key equipment systems until they are retired or replaced; (2) report the costs associated with the sustainment and modernization of key equipment and identify these funds in the Future Years Defense Program; and (3) identify the risks involved in delaying or not fully funding the strategies, and the steps the department is taking to mitigate the associated risks, for those strategies that are delayed or are not fully funded.
Closed - Not Implemented
The Department of Defense believes that through the current Planning, Programming, Budgeting and Execution (PPBE) processes, the Department is already executing an annual procedure to reassess program strategies to ensure equipment sustainment and modernization can support the most recent Defense strategy. The PPBE process ensures that, at the corporate DOD level, the FYDP developed each year balances operational, recapitalization/modernization, maintenance, manning, and facilities requirements in order to accomplish the national defense mission. The review for the FY 2007 President's Budget is already taking place, and does not require completion of the QDR in order to reassess equipment sustainment and modernization plans. Reviews consider strategies and costs to sustain and modernize equipment, and the risks incurred by not fully funding those strategies. The resulting President's Budget reflects the Department's best assessment of a balanced, fully funded budget that most efficiently accomplishes our national security mission, within our limited resources. The Department intends to take no further actions regarding this recommendation.
Department of Defense 2. To ensure that DOD can sustain key equipment items to meet future equipment requirements and to provide greater visibility over key equipment items to Congress, the Secretary of Defense, after the department completes its Quadrennial Defense Review, should, in consultation with the Secretaries of the Military Services, provide the information in the above recommendation to Congress at the same time the department submits its annual budget request, to ensure that Congress has the visibility it needs to provide effective oversight over DOD's program strategies.
Closed - Not Implemented
The Department of Defense believes that 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 1. The strategies to sustain and modernize key equipment systems, and the costs associated with the sustainment and modernization are already provided in the budget documentation submitted with each year's President's Budget. The draft recommendation would also require the Department to identify the risks involved in delaying or not fully funding the strategies. When the Department submits the President's Budget, the overall strategy for accomplishing the national defense mission is fully funded. The risks associated with alternative resource allocations for specific equipment systems have been fully considered. Allocating additional resources to equipment programs may require diversion of resources from other functional areas, such as personnel, construction, or research and development. The overall balance of the Defense program, within limited resources, is our foremost concern. Each year's President's Budget attempts to reflect this balance and our budget documentation details the strategies and costs. Therefore, all key equipment items will be fully funded, within available resources, at appropriate levels to accomplish our mission. Submitting an additional report concurrent with the annual budget would be a duplication of effort. The Department plans to take no further actions regarding this recommendation.

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