This is the accessible text file for GAO report number GAO-07-144 
entitled 'Defense Logistics: Improved Oversight and Increased 
Coordination Needed to Ensure Viability of the Army's Prepositioning 
Strategy' which was released on February 15, 2007. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

Report to Congressional Committees: 

United States Government Accountability Office: 

GAO: 

February 2007: 

Defense Logistics: 

Improved Oversight and Increased Coordination Needed to Ensure 
Viability of the Army's Prepositioning Strategy: 

GAO-07-144: 

GAO Highlights: 

Highlights of GAO-07-144, a report to congressional committees 

Why GAO Did This Study: 

Prepositioned military equipment and supplies on ships and overseas on 
land have become an integral part of the U.S. defense strategy.  
However, the Army’s program has faced long-standing management 
challenges, including equipment excesses and shortfalls, invalid or 
poorly defined requirements, and maintenance problems. In Public Law 
109-163, Congress required the  Army to conduct an assessment of its 
prepositioning programs and required GAO to assess (1) whether the 
Army’s report addressed the areas required by Congress, and 
(2) the major challenges the Army continues to face in its 
prepositioning program.  GAO analyzed the Army’s report and other 
information it obtained from the Joint Staff, the Army, and its 
subordinate commands to identify the issues affecting the Army’s 
prepositioning program. GAO also visited prepositioned equipment sites 
in South Carolina, Europe, South Korea, and Kuwait. 

What GAO Found: 

The Army’s April 2006 report on the status of its prepositioning 
program addressed the areas required by Congress; for example, it 
included descriptions of operational capabilities, as well as inventory 
shortfalls expressed in terms of procurement costs. However, the Army 
significantly shifted its prepositioning strategy in the latter part of 
2006, since that report was issued.  According to the Army, this shift 
was based on insights gained from the 2006 Quadrennial Defense Review, 
but Army officials told us that budget reprogramming decisions and 
worsening Army-wide equipment shortfalls also influenced the expedited 
strategy revision.  The Army’s revised strategy proposes less reliance 
on heavy combat equipment afloat and the expansion of heavy equipment 
in Kuwait and Italy. As a result, the Army’s April 2006 report to 
Congress is outdated, and neither Congress nor DOD should base funding 
decisions on it.

The Army faces several major strategic and management challenges as it 
revises and implements its prepositioning program. From a strategic 
perspective, the Army cannot gauge how well its emerging strategy will 
align with DOD plans currently under development. The Army plans to 
begin implementing its revised strategy by the end of 2006. DOD has a 
departmentwide prepositioning study underway intended to set strategy 
and joint doctrine, but this will not be completed for several months 
and it anticipates that the Army will have to modify its prepositioning 
strategy when the DOD-wide strategy is issued. As a result, the Army is 
at risk of resourcing requirements that may be superseded by the DOD 
strategy. Moreover, because prepositioning is linked to airlift, 
sealift, and basing, the Army’s decisions will have an as-yet 
undetermined effect on these areas. In addition to these strategic 
concerns, the Army faces three key management challenges. First, the 
Army has yet to determine sound secondary item and operational project 
stock requirements, and to systematically measure and report readiness. 
While the Army has been taking steps to address long-standing 
requirements-determination problems in certain parts of its program, 
the effort was not finished when GAO completed its work. Without 
accurate requirements and systematic readiness reporting, Army managers 
are not able to determine the extent to which the existing inventory 
reflects what the Army needs. Second, the Army lacks a comprehensive 
plan for maintenance and storage facilities for prepositioned stocks, 
resulting in uncertain future facility requirements.  In the interim, 
prepositioned stocks are being stored outside, resulting in higher 
maintenance costs. Finally, inadequate maintenance oversight of the 
Army’s prepositioning program has raised concerns about the true 
condition of the equipment at some locations. Until these strategic and 
management challenges are addressed, the Army will face uncertain risks 
should new conflicts occur.

What GAO Recommends: 

GAO is making recommendations to synchronize the Army’s prepositioning 
strategy with overall department efforts and address issues including 
requirements determination, readiness reporting, need for a 
comprehensive facilities plan, and maintenance oversight. The 
Department of Defense ( [DOD) generally concurred with our 
recommendations but felt that further actions are unneeded. GAO 
disagrees and continues to believe that its recommended actions are 
warranted. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-144]. 

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: 

The Army's April 2006 Report to Congress Addressed the Areas Required, 
but the Army's Strategy Is Evolving: 

The Army Faces Major Strategic and Management Challenges As It Revises 
and Implements Its Prepositioning Program: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Past Products Identifying Challenges Facing the Army and 
DOD Regarding Prepositioning Programs: 

Appendix III: Comments from the Department of Defense: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Status of Facilities at Selected Army Prepositioned Stock 
Locations: 

Table 2: GAO Products: 

Table 3: Other Products: 

Figures: 

Figure 1: Existing Outdoor Storage in Kuwait: 

Figure 2: Overview of Military Construction Project at Camp Livorno, 
Italy: 

United States Government Accountability Office: 

Washington, DC 20548: 

February 15, 2007: 

The Honorable Carl Levin: 
Chairman: 
The Honorable John McCain: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Ike Skelton: 
Chairman: 
The Honorable Duncan L. Hunter: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 

With fewer troops permanently stationed overseas, the prepositioning of 
stocks of equipment and supplies has become integral to the ability of 
the Department of Defense (DOD) to project forces into conflict areas 
faster. DOD has acknowledged the need to reorient its capabilities to 
respond to a wider range of challenges. In the 2005 National Defense 
Strategy, the department indicated that prepositioning will continue to 
be an important aspect of DOD's force posture in the future.[Footnote 
1] Additionally, a DOD analysis undertaken to support the achievement 
of operational timelines during major combat operations reaffirmed the 
relevance of prepositioned stocks.[Footnote 2] As a result of this 
mobility analysis as well as recommendations arising from a September 
2005 GAO report on prepositioning, DOD determined that it would 
reassess its existing prepositioning program to identify the optimal 
mix of capabilities needed to support the defense strategy in the 
future.[Footnote 3] 

The Army, the Marine Corps, and the Air Force have drawn heavily from 
their prepositioned stocks to support Operations Iraqi Freedom and 
Enduring Freedom. As we testified in March 2006, these sustained 
military operations are taking a toll on the condition and readiness of 
military equipment, and the Army and Marine Corps face a number of 
ongoing and long-term challenges that will affect the timing and cost 
of equipment repair and replacement.[Footnote 4] A number of reports in 
recent years by GAO and other audit agencies (see app. II) have 
highlighted numerous long-standing problems facing DOD's prepositioning 
programs, including a lack of centralized operational direction; 
unreliable reporting of the readiness of prepositioned equipment sets; 
inaccurate reporting of the maintenance condition of equipment; 
equipment excesses at some prepositioned locations; systemic problems 
with the requirements determination and inventory management; and some 
Army prepositioned stocks having a maintenance condition that was 
considerably below the goal of 90 percent mission capability. In our 
September 2005 report, we recommended that DOD develop a DOD-wide 
strategy and that the Army repair equipment in poor maintenance 
condition.[Footnote 5] 

The National Defense Authorization Act for Fiscal Year 2006 directed 
the Army to conduct an assessment of its prepositioning programs, and 
the Army did so. The Army's report, submitted in April 2006, focused on 
specific items required by the law including how such programs were 
configured to support the evolving goals of the Army, including key 
operational capabilities; whether there were any shortfalls, and if so, 
how the Army planned to mitigate them; the maintenance condition of 
prepositioned equipment and supplies, including the procedures used to 
ensure that maintenance was performed; the adequacy of storage and 
maintenance facilities; and the adequacy of oversight mechanisms and 
internal management reports. The Army's report was based on the Army 
Prepositioned Stocks Strategy 2012, the Army's underlying strategy at 
that time, which laid out a strategic roadmap for the Army's 
prepositioning program through 2012. Strategy 2012 called for the 
prepositioning of five heavy brigade combat team sets, multiple support 
units, and associated sustainment stocks to provide the strategic 
responsiveness required to attain the DOD joint swiftness objectives. 
These stocks are prepositioned around the world, primarily at land 
sites in Europe, Northeast Asia, and Southwest Asia, and aboard 
prepositioning ships afloat near Guam and Diego Garcia. During the 
course of our review and subsequent to the Army's issuance of its April 
2006 report to Congress, however, the Army began revising its 
prepositioning program and drafting a revised strategy, the Army 
Prepositioned Stocks Strategy 2013. These changes were still under way 
as we completed our work. 

The 2006 Authorization Act also required GAO to assess the Army's 
report and identify any issues facing the program for the 
future.[Footnote 6] We provided a briefing to your staff on our 
preliminary assessment of the Army's report and issues facing the 
program. The present report expands and updates that information by 
assessing (1) whether the Army's report addressed the areas required by 
Congress, and (2) major challenges the Army continues to face in its 
prepositioning program. 

Our work is based on our analysis of the Army's report and other key 
documents identifying equipment shortfalls and maintenance condition, 
facility shortfalls, and contractor oversight; discussions with senior 
Army officials and commanders; and site visits to Army prepositioning 
sites in Charleston, South Carolina; Europe; South Korea; and Kuwait. 
We determined that the data we used were sufficiently reliable for the 
purpose of this report. We performed our work from February 2006 
through October 2006 in accordance with generally accepted government 
auditing standards. A more detailed discussion of our scope and 
methodology is contained in appendix I. 

Results in Brief: 

While the Army's April 2006 report to Congress on the status of its 
prepositioned program addressed the areas required by Congress, the 
report is now outdated because the Army has shifted its prepositioning 
strategy. As required by the National Defense Authorization Act for 
Fiscal Year 2006, the April 2006 report included descriptions of 
operational capabilities as outlined in the Army Prepositioned Stocks 
Strategy 2012, as well as inventory shortfalls expressed in terms of 
procurement costs. The report estimated that the Army would need well 
over $4 billion to procure new equipment and replenish spare parts and 
other items, as well as provide new facilities in Kuwait, South Korea, 
and Charleston, South Carolina. The report also addressed the 
maintenance condition of prepositioned equipment, which had been a 
concern based on GAO's past work. The Army reported that stocks in 
South Korea had been repaired since GAO's previous review was 
performed. The Army's report also noted recent efforts to improve 
management and maintenance oversight of the program, including forming 
an independent team to inspect equipment and maintenance operations. 
However, since the report was submitted to Congress, the Army has been 
reexamining its overall prepositioning strategy. Based on recent 
reprogramming decisions as part of a DOD program review, its 
identification of servicewide equipment shortfalls, and insights gained 
from the 2006 Quadrennial Defense Review, the Army concluded in the 
summer of 2006 that its Prepositioned Stocks Strategy 2012 was no 
longer viable. It began work on a revised strategy in late August 
2006.[Footnote 7] According to Army officials, the proposed strategy 
includes significant changes to the program, including less reliance on 
heavy combat equipment afloat, and the expansion of heavy combat 
equipment in Kuwait and Italy, along with continued reliance on stocks 
in South Korea. The Army is seeking to have an implementation plan for 
its new strategy in place by the end of 2006. 

The Army faces major strategic and management challenges as it revises 
and implements its prepositioning program, including: 

* Inability to gauge its alignment with DOD-wide prepositioning 
strategy: The Army's plan to implement its prepositioning strategy by 
the end of 2006 could result in investments for the prepositioning 
program that do not align with the anticipated DOD-wide prepositioning 
strategy because it will be several months ahead of overarching DOD- 
wide efforts. Strategy should be shaped from the top down. One of the 
key recommendations from our September 2005 report was that the 
department needed joint doctrine and an overarching strategy to lay a 
foundation for the programs of the services to ensure jointness and 
avoid duplication across the services. Consistent with our 
recommendation, DOD began a study with a broad charter in mid-2006 to 
evaluate a range of future prepositioning options, but that study was 
still underway when we completed our work. The John Warner National 
Defense Authorization Act for fiscal year 2007 required DOD to 
establish the strategic policy on the programs of DOD for the 
prepositioning of materiel and equipment mid-April 2007.[Footnote 8] At 
the time we finished our work the Army was planning to implement its 
strategy by the end of 2006--months ahead of the DOD-wide effort. The 
most significant problem resulting from this timing is that the Army 
cannot be assured that its efforts will be aligned with DOD-wide 
efforts still ongoing. Even though DOD and Army officials told us they 
have coordinated their prepositioning plans, the timing of the two 
strategies is not synchronized. As a result, DOD could be restricted in 
developing an optimal DOD-wide strategy because the Army strategy 
already exists or the Army could be at risk of filling requirements 
that will be superseded when the DOD-wide strategy is issued. Moreover, 
prepositioning is interconnected with airlift, sealift, and basing, so 
the Army's decisions will have an as-yet undetermined effect on lift 
requirements and basing. Such potential problems are avoidable if the 
strategies are synchronized. 

* Need to determine sound secondary item and operational project stock 
requirements and systematically measure and report readiness: Despite 
recent efforts to improve requirement setting, the Army has not yet 
determined reliable secondary item and operational project stock 
requirements. In its efforts to reassess secondary item requirements, 
the Army ran its requirements-determination model, called the Army War 
Reserve Automated Process, in 2005. It had not previously run the model 
since 1999, even though Army guidance at that time called for 
requirements to be updated every 2 years. Further, operational project 
stock requirements must be revalidated every 5 years, but the most 
recent revalidation for many of the projects was last conducted in 
1998. However, in response to our recommendation in 2005 that this long-
standing problem be addressed, the Army initiated a revalidation of its 
Operational Project Stocks in April 2006. The revalidation was still 
ongoing when we completed our work in October 2006. Also, while the 
Army measures readiness of prepositioned equipment programs by 
assessing inventory levels against requirements and the maintenance 
condition of on-hand equipment, the Army does not systematically 
measure or report readiness for the secondary item and operational 
project programs. This situation is largely unchanged since 1998, when 
we recommended that the Army develop readiness-reporting mechanisms for 
these programs.[Footnote 9] Without sound requirements or reporting 
mechanisms, the Army cannot reliably assess the impact of any 
shortfalls, the readiness of its programs, or make informed investment 
decisions about them. 

* Need to identify maintenance and storage facility requirements: The 
Army currently lacks a comprehensive prepositioning storage and 
maintenance facilities plan. The maintenance and storage facility 
shortages it reported to Congress were based on the now obsolete Army 
Prepositioning Strategy 2012. Army policy calls for the long-term 
storage of prepositioned equipment in controlled-humidity facilities, 
because outdoor storage results in substantially increased maintenance 
costs.[Footnote 10] Yet currently in Kuwait, storage facilities are 
being used to house command staff personnel while equipment is being 
stored outside, in harsh environmental conditions. The Army estimates 
that maintenance costs an extra $24 million per year for the heavy 
brigade set in Kuwait because equipment is stored outside. In South 
Korea, despite an intensive effort to repair prepositioned assets and 
correct long-standing problems, almost one-third of the equipment 
continues to be stored outside, resulting in increased maintenance and 
costly corrosion. In contrast, part of the Army's new strategy includes 
a plan to store heavy equipment at a newly constructed site in Italy, 
to make use of a facility that had previously been left without a 
mission. Before these existing facilities problems can be addressed, 
however, the Army must determine how prepositioned equipment will be 
utilized and where it needs to be located. Army officials are 
considering using prepositioned equipment in Kuwait, South Korea, and 
Italy to support a rotational presence and training in these regions 
even as they continue to develop a prepositioning implementation plan 
based on existing space and storage. According to Army officials, 
utilizing prepositioned equipment to support a rotational presence or 
for training increases the maintenance requirement and, therefore, the 
maintenance facilities needed. Depending on how the rotation is 
scheduled, however, it may concurrently reduce the requirement for 
humidity-controlled storage space. Furthermore, since an alternate 
South Korean prepositioning site is being considered, the Army may be 
constructing facilities at its existing prepositioning site at Camp 
Carroll that it does not need. Without a comprehensive facilities plan, 
the Army will not know the types and quantities of facilities it will 
need to store and maintain equipment at each location. 

* Lack of maintenance oversight: The Army reported to Congress that 
oversight of the program is provided by the Army Materiel Command and 
external agencies tasked with evaluating the program, and that 
readiness is accurately reported. In our 2005 report, we found that a 
lack of oversight in South Korea resulted in a deterioration of the 
maintenance condition of prepositioned equipment. In response to our 
report, the Army established oversight of the maintenance process in 
South Korea and repaired the equipment. However, in Kuwait, our review 
of recent inspections by Army inspectors of contractor-maintained 
equipment raised significant concerns about its true maintenance 
condition. These concerns are the result of inadequate management of 
contractor performance. Specifically, over one-quarter of the 
prepositioned equipment presented by the contractor failed the 
government quality assurance inspection between June 2005 and June 
2006. 

We are recommending that the Army take steps to synchronize its 
prepositioning strategy with the DOD-wide strategy in order to ensure 
that future investments made for the Army's prepositioning program 
align with the DOD prepositioning strategy. Once the Army's strategic 
direction is aligned, we are recommending that the Army develop an 
implementation plan that maintains ongoing reevaluation of the 
secondary item and operational project stock requirements; establishes 
systematic readiness measurement and reporting of these requirements; 
identifies the optimal mix of storage and maintenance facilities at 
each location; and prescribes oversight requirements for the 
maintenance of prepositioned equipment. 

In written comments on a draft of this report, DOD generally concurred 
with our recommendations but stated that it had already taken steps to 
address the recommendations and that further actions are not needed. We 
acknowledge that the Army and the department have taken some initial 
steps; however, we continue to believe that our recommendations have 
merit and that additional actions and sustained management attention 
will be needed to ensure the viability of the Army's prepositioning 
program as part of the overall departmentwide effort to meet mobility 
needs. 

Background: 

Prepositioning is an important part of DOD's overall strategic mobility 
framework. It allows DOD to field combat-ready forces in days rather 
than the weeks it would take if the forces and all necessary equipment 
and supplies had to be brought from the United States to the location 
of the conflict. The U.S. military can deliver equipment and supplies 
in three ways: by air, by sea, or by prepositioning. While airlift is 
fast, it is expensive to use and impractical for moving all of the 
material needed for a large-scale deployment. Although ships can carry 
large loads, they are slower than airlift. Prepositioning lessens the 
strain of using expensive airlift and reduces the reliance on slower 
sealift deliveries. The value of prepositioned stocks was demonstrated 
during operations in Iraq. The military used equipment and supplies 
stored at land sites in the region and offloaded much of the stocks 
from its prepositioning ships. Having the equipment prepositioned 
allowed troops to fly in, deploy rapidly, and train with prepositioned 
equipment before beginning combat operations in Iraq. As the ongoing 
war has depleted those items, the Army is in the process of 
reconstituting its prepositioned equipment and supplies. 

The Department of the Army provides strategic-level guidance for the 
Army's prepositioned stock program and allocates funding for 
prepositioned stock requirements. The Army Materiel Command provides 
the overall management of the Army's prepositioned stocks program. 
Within Army Materiel Command, the Army Sustainment Command manages the 
operations and maintenance of the program, and issues the stocks in 
theater in support of contingency operations or exercises. At each 
prepositioned stock location, the Army Sustainment Command also 
provides an Army Field Support brigade and battalion for day-to-day 
maintenance and operational management of the program. 

The Army's prepositioning program involves three primary categories of 
stocks stored at land sites and aboard prepositioning ships: combat 
brigade sets, war reserve sustainment stocks, and operational projects 
as described below. 

* Army Combat brigade sets: 

- Are designed to support 3,000 to 5,000 soldiers. 

- Include heavy weaponry such as tanks and Bradley fighting vehicles. 

- Include support equipment such as trucks and High Mobility Multi- 
purpose Wheeled Vehicles. 

- Include spare parts and other sustainment stocks to support the early 
stages of a conflict. 

* War reserve sustainment stocks include: 

- Items to sustain the battle unit until resupply can be ramped up to 
wartime levels and arrive in theater. 

- War Reserve Secondary Items include rations, clothing and textiles, 
construction and barrier materiel, medical supplies, repair parts, and 
major assemblies (reparables and consumables). 

* Operational project stocks include: 

- Authorized material above unit authorizations designed to support 
Army operations or contingencies. 

- Equipment and supplies for special operations forces, bare base sets, 
petroleum and water distribution, mortuary operations, and prisoner-of- 
war operations, among others. 

The Army's April 2006 Report to Congress Addressed the Areas Required, 
But the Army's Strategy is Evolving: 

The Army's April 2006 report to Congress on the status of its 
prepositioned program addressed the areas required by Congress, but the 
Army has significantly shifted its prepositioning strategy since then. 
The Army's report included descriptions of operational capabilities as 
outlined in the Army Prepositioned Stocks Strategy 2012; addressed the 
maintenance condition of prepositioned equipment; and noted recent 
efforts to improve management and maintenance oversight of the program, 
including forming an independent inspection team. However, since the 
report's publication, the Army has begun a reexamination of its overall 
prepositioning strategy. According to the Army, this shift was based on 
insights gained from the 2006 Quadrennial Defense Review, but Army 
officials told us that recent budget reprogramming decisions and 
worsening Army-wide equipment shortfalls also influenced the 
reexamination. The Army concluded that its Prepositioned Stocks 
Strategy 2012 was no longer viable and began work on a revised strategy 
that was approved by Army leaders in late August 2006 and is expected 
to be completed by the end of 2006. 

Army Report Addresses Areas Required by Congress: 

The Army's report to Congress addressed the required areas included in 
the National Defense Authorization Act for Fiscal Year 2006. The Army 
determined that over $4 billion would be needed to fill equipment, 
secondary item, and facility shortfalls. The Army reported that 
additional covered storage and maintenance space was needed at 
prepositioning sites in Southeast and Northeast Asia as well as at the 
Charleston, South Carolina, facilities used to maintain afloat stocks 
envisioned under the 2012 strategy. Further, it indicated that the 
facilities in Europe would be sufficient to meet the prepositioned 
requirements once the construction project in Italy was completed. The 
equipment sets at each location were at a high percentage of mission 
capability, it reported, with the exception of Kuwait. The equipment 
sets in Kuwait had been issued in support of Operation Iraqi Freedom 
and Operation Enduring Freedom, and by 2006 had a low mission- 
capability rate. It did stipulate, however, that the equipment set was 
undergoing repair, recapitalization, and replacement. 

Regarding the program's management and maintenance oversight, the 
report acknowledged that weaknesses in the quality control program had 
been revealed by both internal and external audits, including GAO's 
September 2005 report. The Army Sustainment Command created the 
Logistics Support and Evaluation Team to address identified quality 
control problems. According to the Army report, the team provides an 
additional layer of review to ensure that the Army Prepositioned Stock 
readiness levels reported are accurate and that sufficient quality 
assurance measures are in place. 

Army Prepositioning Stocks Strategy 2012 Is No Longer Viable: 

Since the release of its report to Congress in April 2006, several 
decisions led the Army to conclude that its existing strategy was no 
longer viable. In particular, an internal DOD reprogramming action 
required the Army to offload a Heavy Brigade Combat Team equipment set 
stored on a prepositioned ship and redistribute it to meet existing 
equipment shortfalls and reduce costs. The Army had two equipment sets 
already aboard prepositioned ships and planned to upload a third set in 
2013. The reprogramming action directed the Army to offload the third 
equipment set. However, because the third equipment set had not yet 
been created, the Army decided to offload one of the existing equipment 
sets instead to meet the reprogramming guidance. This decision 
effectively reduced the Army's program in the near term from two to one 
heavy brigade combat team afloat, with implications for the operational 
plans of the regional combatant commanders. 

Several factors combined to create a ripple effect that impacted the 
viability of the Army Prepositioned Stocks 2012 Strategy. First, the 
department told us the Army changed its strategy based on insights 
gained from the 2006 Quadrennial Defense Review. Also, Army officials 
told us that equipment shortfalls made it difficult for the Army to 
meet the requirements in the strategy at least partly because Army 
prepositioned stock equipment was continuing to be drawn to support 
ongoing operations. Also, the Army transformation to modularity 
exacerbated shortfalls in certain types of equipment and created 
excesses in others. In addition, the Army eliminated most of the 
remaining facilities and prepositioned stocks from Western Europe but 
was completing a new maintenance and storage facility in Italy which 
needed a mission. As a result, the Army's 2006 report was outdated soon 
after its publication and should not be used by Congress or DOD for 
funding decisions. 

The Army Faces Major Strategic and Management Challenges As It Revises 
and Implements Its Prepositioning Program: 

The future success of the Army's prepositioning program depends not 
only on how well the Army aligns its efforts with those of the 
department as a whole, but also on how well long-standing management 
issues are addressed as the new strategic plan is implemented. The Army 
expects to finalize its implementation plan for the revised 
Prepositioned Stocks Strategy 2013 by December 31, 2006, but DOD will 
not complete its departmentwide strategy before mid-April 2007. 
Further, problems persist with the Army's management of its secondary 
item and operational project stocks programs, including lingering 
questions about the overall requirements and the lack of reliable 
readiness measures for these programs. In addition, the lack of a 
comprehensive prepositioning storage and maintenance facilities plan 
contributes to increased maintenance costs and uncertain future 
facility requirements. Finally, the Army has not demonstrated adequate 
oversight to ensure the proper maintenance condition of prepositioned 
stocks. 

Alignment between Army's Prepositioning Strategy and Anticipated DOD 
Strategy Remains Uncertain: 

The Army is developing a new prepositioning strategy to address recent 
decisions that have affected the viability of its existing plan. 
According to Army officials, the new strategy is intended to promote 
greater flexibility in the use of prepositioned stocks while 
concurrently increasing the Army's access to unstable areas. While 
continuing to rely on stocks in South Korea, the proposed strategy 
includes significant changes to the program--among them, less reliance 
on heavy combat equipment afloat and expanded reliance on heavy 
equipment in Kuwait, Qatar, and Italy. The Army's draft revisions to 
its prepositioning strategy were approved by the Army Vice-Chief of 
Staff in late August 2006. The Army established an Integrated Process 
Team to develop a comprehensive implementation plan for the new 
strategy and to provide direction to working groups that would assess 
the areas of strategy, capabilities, equipping, facilities, and 
funding. The Army plans to have this task completed by late December 
2006. However, since the Army's Integrated Process Teams were still 
performing their work, we could not evaluate progress at the time we 
completed our review. 

DOD has efforts underway that will address gaps identified in GAO's 
September 2005 report but have implications for the Army's efforts. 
First, to address gaps in departmentwide oversight, DOD convened a 
working group that includes representatives from the Office of the 
Secretary of Defense, Joint Staff, Defense Logistics Agency, the Army, 
Joint Forces Command, and the other services to develop joint doctrine 
for the prepositioning programs. This group was also working to update 
the departmental-level directive that describes responsibilities and 
provides broad guidance to the services during our review. While the 
efforts begun by this group represent progress, DOD had not yet 
developed joint doctrine for the program at the time we completed our 
work. Second, DOD also initiated a study in the spring of 2006 to 
address the need for a departmentwide prepositioning strategy to guide 
the department's future prepositioning efforts. This study was a follow-
on to the 2005 Mobility Capabilities Study that, while identifying the 
importance of prepositioning in meeting mobility objectives, along with 
interrelated airlift, sealift, and basing decisions, recognized the 
need for further analysis of prepositioning. Thus, the DOD-wide 
prepositioning study will determine how and what prepositioned 
equipment should be used and whether the prepositioned assets are in 
the best locations to support the department's priorities and posture 
plans. According to DOD officials, this DOD-wide prepositioning study 
was not scheduled to be finished until the spring of 2007 at the 
earliest. However, on October 17, 2006, Public Law 109- 369 was enacted 
directing the Secretary of Defense to complete its DOD- wide 
prepositioning strategy by mid-April 2007. 

DOD and Army officials told us during the course of our review that 
they discuss such strategy issues during their joint working group 
meetings and felt that they have coordinated their prepositioning 
plans. However, if the two strategies are not synchronized, DOD could 
be limited in developing an optimal DOD-wide strategy because the Army 
strategy already exists. Alternatively, the Army could be at risk of 
filling requirements that will be superseded when the DOD-wide strategy 
is ultimately issued. In fact, DOD anticipates that when the DOD-wide 
strategy is issued the Army will have to modify its service-specific 
prepositioning strategy to align with the new requirements. Finally, 
since prepositioning is interconnected with airlift, sealift, and 
overseas basing, the Army's decisions will have an as-yet undetermined 
effect on lift requirements and basing. 

Despite Recent Efforts to Improve Requirements Setting for Secondary 
Item and Operational Project Programs, the Army Does Not Have Reliable 
Requirements or Readiness Information: 

Despite recent efforts to improve requirements setting, the Army has 
not yet determined reliable secondary item and operational project 
requirements. In its efforts to reassess secondary item requirements, 
the Army ran its requirements-determination model, called the Army War 
Reserve Automated Process, in 2005. It had not previously run the model 
since 1999, even though Army guidance at that time called for 
requirements to be updated every 2 years. Because the model yielded 
questionable outputs, Army officials told us they were conducting a 
management review to scrub the requirements and help to determine 
investment priorities. Army officials said they expect requirements to 
be significantly adjusted as a result of their reviews. For example, 
the Army has already lowered the U.S. Army Europe meals-ready-to-eat 
stockage levels to match the smaller force structure there. This action 
resulted in over 1 million meals being made available to fill other 
high-priority requirements. In addition, the Army War Reserve Automated 
Process that is used for computing secondary item requirements will now 
be updated annually instead of biennially. 

Addressing these problems is critical for ensuring Army readiness in 
future conflicts. Experiences in Iraq showed that prepositioned 
secondary item stocks did not adequately support the troops in combat 
operations. Secondary items encompass a wide range of inventory, 
including critical readiness-enabling spare parts. In 2005, we reported 
that inaccurate requirements and insufficient funding led to shortages 
in critical items during Operation Iraqi Freedom.[Footnote 11] For 
example, demand for nonrechargeable lithium batteries and track shoes 
for armored vehicles were more than three times greater than the stated 
requirements for those items. We concluded that these shortfalls were 
directly traceable to problems in requirements computation. 

In addition to critical shortfalls, lessons learned also show 
considerable mismatches between what was available in prepositioned 
stocks and what units actually needed. In retrospect, the Army did a 
poor job in forecasting what it would need. As a result, it had to use 
scarce and expensive airlift to get needed stocks to the troops in the 
field, essentially defeating the purpose of prepositioning such items 
in the first place. Subsequent analyses have detailed the extent of the 
mismatches between stock levels, requirements, and actual usage. For 
example, most of the 16,000 different spare parts that were actually 
positioned in Kuwait were ultimately shipped back from the theater 
because they were not needed by the forces there, according to a RAND 
study commissioned by the Army.[Footnote 12] Most spare parts had to be 
airlifted to the theater, according to RAND. In addition, RAND compared 
the Army's requirements for prepositioned spare parts to the actual 
demands during 2003 in Kuwait and found considerable mismatches. Only 
about half of the spare parts the Army thought would be required for 
prepositioned stocks were actually demanded in theater by Army units 
during 2003. 

According to Army officials, secondary items have historically not been 
fully funded at least partially because of concerns over the accuracy 
of the requirements. As shown in Operation Iraqi Freedom, inaccurate 
requirements resulted in limited demand for some items and excessive 
demand for others, greatly surpassing the on-hand inventory. The Army 
had to employ high-cost air transportation to bring needed items to the 
warfighter. 

As with secondary item requirements, long-standing issues exist within 
the operational project program--which includes important items like 
chemical defense equipment, pipeline systems, mortuary units, and bare 
base sets for housing soldiers in austere environments, among other 
items not typically part of unit equipment. These sets are typically 
kept to meet the specific needs of regional combatant commanders, and 
Army regulations require that they be revalidated every 5 years to 
ensure that the sets are still needed for an operational plan. Despite 
this requirement, the most recent revalidation for many of the projects 
was conducted in 1998. However, in response to our recommendation in 
2005 that this long-standing problem be addressed, the Army initiated a 
revalidation of its Operational Project Stocks in April 2006. 

By October 2006, when we completed our work, the Army had queried Army 
commands worldwide to revalidate the needs for the various sets and had 
obtained validations for most of the sets. However, Army officials told 
us that they have already taken actions to eliminate projects that are 
no longer needed and are planning to conduct a management review of 
this program to further refine the requirements. To date, the Army has 
consolidated some projects and has cancelled other projects that were 
no longer needed. For example, three projects to support aerial 
delivery operations were cancelled because they were no longer required 
to support current operational plans. In addition, United States Army, 
Europe has cancelled two projects for bridging and aircraft matting 
because they no longer meet current operational requirements. 

One of the most significant consequences of having questionable 
requirements underpinning the programs is that it makes it difficult to 
assess their overall readiness, and the risk associated with 
shortfalls. Typically, the Army measures readiness of prepositioned 
equipment programs by assessing the inventory levels against 
requirements as well as the maintenance condition of on-hand equipment. 
However, the Army does not routinely measure or report readiness for 
the secondary item and operational project programs. According to Army 
and DOD officials, shortfalls in secondary items and some operational 
projects are identified in combatant command priority lists and through 
joint quarterly readiness reports to the Joint Staff, but not as part 
of the Army's readiness reporting system. This situation is largely 
unchanged since 1998, when we recommended that the Army fix 
requirements problems and develop readiness-reporting mechanisms for 
these programs.[Footnote 13] 

Despite their lower priority relative to combat equipment programs, 
secondary item and operational project programs can be critical during 
a war. They contain items such as spare parts that are essential to 
keep the combat equipment operational, as well as chemical defense 
equipment and other items likely to be needed during the early stages 
of a conflict. The budgetary stakes are high: according to the April 
2006 report to Congress, the Army estimated that it had a shortfall of 
about $1.7 billion in secondary items alone. Without sound 
requirements, the Army cannot reliably assess the readiness of its 
programs. Once sound requirements are set, the Army will need reporting 
mechanisms to assess their readiness and the impact of any shortfalls. 
In the absence of such mechanisms, the Army cannot make sound risk- 
based decisions about what investments it should make in the programs 
in the future. 

Army Lacks a Comprehensive Prepositioning Storage and Maintenance 
Facilities Plan: 

Although the Army reported maintenance and storage facility shortages 
to Congress, it lacks a comprehensive plan for maintenance and storage 
facilities for prepositioned stocks. According to Army officials, 
facility shortfalls are a concern in Kuwait and Korea, while facility 
excesses were an issue in Italy. Army policy recommends storing 
prepositioned equipment in controlled-humidity storage facilities, 
since outdoor storage results in increased maintenance costs. However, 
requirements for these facilities are currently uncertain. Until the 
Army develops a comprehensive plan that identifies how prepositioned 
equipment will be utilized and where it will be located for the long 
term, the existing facilities problems can not be addressed. 

Outdoor Storage of Equipment Results in Millions of Dollars of 
Increased Maintenance Costs: 

The Army's lack of adequate storage facilities for prepositioned 
equipment has led to equipment being stored outdoors, leaving it 
relatively unprotected from moisture, sand, and other elements and thus 
contributing to a number of maintenance problems, including 
corrosion.[Footnote 14] Army Regulation 740-1 stipulates that 
prepositioned equipment should be stored in controlled-humidity storage 
facilities. If controlled-humidity storage is not available, then 
covered storage space is preferred. More frequent inspections are 
required for equipment stored outside. 

Inadequate storage facilities in both South Korea and Kuwait have 
resulted in outdoor storage of prepositioned equipment. Figure 1 shows 
the storage situation in Kuwait, with prepositioned equipment stored at 
outside locations. 

Figure 1: Existing Outdoor Storage in Kuwait: 

[See PDF for image] 

Source: U.S. Army. 

[End of figure] 

Outdoor storage accelerates equipment deterioration and increases costs 
due to additional maintenance requirements. For example, if tanks are 
stored outside, preventive maintenance inspections must be performed 
every 30 days. If they are stored in controlled-humidity warehouses, 
inspections are only performed every 6 months. According to Army 
officials, maintenance inspections and repairs for equipment stored 
outdoors cost about four times that of equipment being stored in 
controlled-humidity warehouses. Army officials estimate that it costs 
an additional $24 million per year per heavy brigade combat team to 
maintain the equipment in outdoor storage. 

Future Facility Requirements for the Army Prepositioning Program Remain 
Uncertain: 

Facility requirements for the Army's prepositioning program depend on 
equipment requirements, and as was discussed above, these have not yet 
been established. Consequently, facility requirements are uncertain. 
Prepositioned equipment can be used as rotational--that is, equipment 
provided to units arriving in theater for deployment; training--that 
is, equipment provided to units for training exercises but then 
returned to the storage location; or simply as stored prepositioned-- 
equipment that is stored for undetermined future use. According to Army 
officials, there will be increased maintenance and maintenance 
facilities requirements if prepositioned equipment is to be used for 
training or to support a rotational presence in the region. 
Concurrently, there may be a decreased requirement for humidity- 
controlled storage space, depending on how the rotation is scheduled. 
Rotational unit equipment will have more repair requirements than 
stored units, due to damage and wear. If the prepositioned equipment is 
maintained solely for future use, more storage facilities and less 
maintenance capability will be needed. In Kuwait, the Army has not 
determined whether the prepositioned equipment will be used for units 
rotating in and out of theater, used as a combat brigade team training 
set, or stored. 

Storage facilities in Kuwait will likely be needed, but until Army 
officials decide how the equipment in Kuwait will be used, they will 
not be able to determine the type and amount of facilities needed. 
Storage facilities intended for prepositioned equipment at Camp Arifjan 
are currently being used as headquarters buildings for Army Central 
Command, and it is not clear when these buildings will revert to their 
storage function. While the Army is exploring numerous options for 
providing covered storage of the equipment in Kuwait, ranging in cost 
from $20 million to $37 million, none are currently funded. 

Additional maintenance and storage facilities are needed in South Korea 
to support the prepositioned equipment at Camp Carroll. The Army has 
already broken ground on a new maintenance facility that is expected to 
be operational in November 2007. The Army has plans to build an 
additional 200,000 square feet of storage space at a cost of $18.6 
million. This project is currently unfunded, yet it has a target 
completion date of 2012. However, while the Army is addressing the 
prepositioning facility shortfalls at Camp Carroll, it is considering 
relocation of the set to another site near a port further south. Army 
officials believe it would provide for more flexible use of the 
prepositioned assets. If the Army decides to move the equipment set, 
the additional covered storage at Camp Carroll may be unnecessary. 

The Army's new strategy also includes a plan to store heavy equipment 
at a newly constructed Italian site, to make use of a facility that 
previously had no mission. When initially approved, the construction 
project was intended to support the storage of a prepositioned combat 
brigade team equipment set, but this plan was eliminated in the 2012 
strategy. However, since the contract for this project had already been 
awarded and construction was underway, the Army decided to complete the 
construction. Army officials stated that it would be more costly to 
cancel the project than to finish it. The cost for the initial phases 
of the construction project is approximately $48 million. A $5 million 
ammunition maintenance and storage facility is also planned as part of 
this construction project. 

Figure 2 shows the new facility, including seven controlled-humidity 
warehouses, a maintenance facility, an administration building, and a 
brake test facility and wash rack. 

Figure 2: Overview of Military Construction Project at Camp Livorno, 
Italy: 

[See PDF for image] 

Source: U.S. Army. 

[End of figure] 

The new Army strategy includes a prepositioned combat brigade team 
equipment set at Livorno with the intention of using the port to upload 
the prepositioned equipment onto ships as needed. The Army has also 
been discussing using the equipment in Livorno for rotational training 
exercises in Eastern Europe in locations like Bulgaria and Romania. 
However, specific plans for this had not been developed. 

Afloat stocks are reduced in the Army's new 2013 prepositioning 
strategy, but the Army plans to continue to utilize the Charleston, 
South Carolina, prepositioning facility to unload, repair, and reload 
prepositioned equipment from afloat prepositioning ships. The facility 
was originally used to maintain Polaris missiles and was converted by 
the Army to provide maintenance support of the prepositioned afloat 
fleet. According to Army officials, upgraded maintenance and storage 
facilities will be required to support the facility's prepositioning 
mission but the implications of the new strategy on facilities have not 
yet been determined. 

Table 1 shows the current status of maintenance and storage facilities 
at selected Army prepositioning locations. 

Table 1: Status of Facilities at Selected Army Prepositioned Stock 
Locations: 

Location: Europe; 
Status: 
* Military closed three prepositioned sites in Europe at Bettemborg, 
Luxembourg; Eygelshoven, Netherlands; and Hythe, United Kingdom. 
* First two phases of a three-phase maintenance and storage facility 
project are nearing completion in Livorno, Italy at a cost of $48 
million. 

Location: Charleston, S.C; 
Status: 
* The Army is proposing several projects for additional storage and 
improved maintenance capability for the facility. 

Location: South Korea; 
Status: 
* Construction of a new maintenance facility is currently underway at 
Camp Carroll with completion due in November 2007. 
* Planning for additional 200,000 sq. ft. storage capability. 
* Exploring potential relocation of set to Kwang Yang. 

Location: Kuwait; 
Status: 
* Existing storage facility is currently being used to house Army 
Central Command administrative offices, which leaves prepositioned 
assets stored outside. 
* Army Materiel Command is considering permanent and temporary 
maintenance and storage capability alternatives to protect 
prepositioned equipment from the harsh desert climate. 

Location: Qatar; 
Status: 
* Seventeen of 26 existing storage facilities have been diverted to 
Army priority missions; some diverted warehouses may be returned to 
Army Prepositioning Stocks use at some future date. 

Source: GAO analysis, developed from Army data. 

[End of table] 

Maintenance Oversight of Prepositioned Stocks Has Improved in South 
Korea, but Needs Improvement in Kuwait: 

Management oversight of the maintenance of equipment in Korea has 
improved since we published our report in 2005. Previously, significant 
issues and problems were found with the mission capability of stocks in 
South Korea. We stated that despite reports of high mission capability, 
the majority of the stocks in South Korea were not mission capable. 
During our May 2006 visit to South Korea, we observed that the Army had 
hired additional personnel to bring the equipment up to full mission 
capability and ensure that the equipment was properly maintained. A new 
organizational structure was established that created clear lines of 
responsibility and standard operational procedures for each aspect of 
the cyclic maintenance program. A training program for production 
control was established for both U.S. and South Korean employees, and 
there was a continued emphasis on the need for oversight. 

While the problems we identified in 2005 in South Korea have been 
corrected, recent inspections of contractor-maintained equipment in 
Kuwait revealed a high percentage of equipment failure, indicating that 
maintenance oversight is a continuing problem. Analyzing data available 
at the site, we found that 28 percent of the prepositioned equipment in 
Kuwait submitted for government acceptance had failed quality assurance 
testing between June 2005 and June 2006. However, the maintenance 
battalion had not routinely tracked this information or monitored this 
important performance measure. 

Additionally, much of the equipment recently certified by the 
contractor during preventative maintenance inspections failed random 
governmental checks. Beginning in May 2006, the quality 
assurance[Footnote 15] team began performing random preventative 
maintenance checks on equipment items inspected and certified by the 
contractor within the previous 10 to 14 days. Nearly half of the 49 
pieces of equipment sampled during May and June 2006 by the quality 
assurance inspectors had nonmission-capable faults needing repair. We 
accompanied inspectors on three random inspections. The nonmission- 
capable faults we observed included inoperable lights, fluid leaks, 
lack of battery power, and an inoperable rear door on a Bradley 
Fighting Vehicle. Army officials told us this failure rate was not 
acceptable and that they had informed the contractor it needed to 
improve performance. Yet Army officials recently reported successful 
issuance in August 2006 of some of the prepositioned equipment for 
units heading to Iraq. This inspection failure rate raises questions 
about the true mission capability of the prepositioned equipment, and 
it demonstrates the need for rigorous management oversight of the 
maintenance contractor in Kuwait. Without improved oversight of 
maintenance, prepositioned equipment and supplies could be less than 
mission capable when needed. 

Conclusions: 

While prepositioning is considered critical to DOD's ability to meet 
its mobility needs, the department does not yet have a clear strategy 
laid out that identifies the role that prepositioning will play in the 
21st century. The Army took steps to revise its prepositioning strategy 
in the latter part of 2006; however, its efforts are not fully 
synchronized with the evolving DOD-wide strategy. The Army's decisions 
today have profound future implications for the entire department and 
potentially affect our ability to respond to conflict. The primary risk 
of having the Army develop its strategy in advance of a DOD-wide 
strategy is that the Army could develop plans without an understanding 
of how the Army and other services' programs will fit together or, 
alternatively, limit the options of the department because it must 
incorporate the Army's plans into the overall strategy. The importance 
that prepositioned stocks are envisioned to have in the future 
underscores the need for DOD-wide consensus on the direction and 
priority for the programs, and the necessity of strong leadership and 
direction from the top levels of DOD. The choices may well be 
difficult. Unlike the period following the end of the Cold War, the 
Army no longer has an excess of relatively modern combat and support 
equipment. Depending on the strategy that is eventually chosen, 
billions of investment dollars could be required to recapitalize 
prepositioning programs and build an infrastructure to support them. 
Alternatively, should the Army and DOD decide to focus less on 
prepositioned stocks, this decision will likely have a ripple effect on 
airlift and sealift needs. A DOD-wide strategy would become the 
foundation for an investment plan that balances costs and risks and 
would guide the department as it chooses where it will invest in an 
environment that is increasingly becoming resource constrained. 

Setting and aligning broad strategies, however, will not be enough to 
ensure success in the Army's program over the longer term. Once the DOD-
wide strategy is set and the Army's efforts are aligned with it, the 
Army must turn its attention to the fundamentals of program management. 
Dozens of reports from GAO and other organizations point to pervasive 
management problems in determining requirements and ensuring program 
readiness, as well as in providing adequate storage and maintenance for 
prepositioned equipment. To its credit, the Army recognizes this and 
has taken critical first steps toward redefining its prepositioning 
program and building a plan for its implementation. However, focused 
and sustained attention will be required to overcome these long-
standing issues. 

Recommendations for Executive Action: 

We recommend that the Secretary of Defense direct the Secretary of the 
Army to take steps to synchronize the Army's prepositioning strategy 
with the DOD-wide strategy to ensure that future investments made for 
the Army's prepositioning program align with the anticipated DOD-wide 
prepositioning strategy. 

Once the strategic direction is aligned with the DOD strategy, we 
recommend that the Secretary of the Army develop an implementation plan 
that: 

* completes ongoing reevaluation of the secondary item and operational 
project stock requirements as well as establishes systematic readiness 
measurement and reporting of secondary items and operational project 
stock programs, 

* identifies the optimal mix of storage and maintenance facilities at 
each location to support the emerging strategy, and: 

* prescribes oversight requirements for the maintenance of 
prepositioned equipment to ensure that equipment is ready for combat. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report, DOD generally concurred 
with our recommendations but stated that it had already taken steps to 
address the recommendations and that further actions are not needed. We 
acknowledge that the Army and the department have taken some initial 
steps; however, we continue to believe that our recommendations have 
merit and that additional actions and sustained management attention 
will be needed to ensure the viability of the Army's prepositioning 
program as part of the overall departmentwide effort to meet mobility 
needs. DOD also commented that our report contained misleading 
information and provided technical comments to improve the accuracy and 
clarity of the report. We disagree that the facts in our report are 
misleading and have addressed each of the department's technical 
comments in appendix III. 

DOD partially concurred with our first recommendation that the 
Secretary of Defense take steps to synchronize the Army's 
prepositioning strategy with the emerging DOD-wide strategy, and stated 
that the Army had developed a service-specific strategy that is being 
incorporated into ongoing mobility studies and the emerging DOD-wide 
effort. The department stated that, since the Army is participating in 
ongoing studies, further direction is not required. Some of the 
technical comments DOD provided also addressed the strategy-setting 
issue, but seemed to contradict the overall response. For example, DOD 
stated that the timing of the two strategies could cause "disconnects" 
and that the Army will have to modify its strategy when the DOD-wide 
strategy is issued. Since DOD's comments lack internal consistency, it 
is not clear to us what the department intends to do to address the 
recommendation. As our report points out, successful management 
practices dictate that strategy setting should begin at the top, and 
that strong leadership will be needed from the department to ensure 
that the programs of the Army--as well as other military services--are 
aligned with the overall departmentwide strategy, not the reverse. 
Moreover, taking a service-centric approach to prepositioning may 
preclude opportunities for innovation, or lead to duplication across 
the department. Prepositioning should be viewed in a joint context, as 
part of broader mobility objectives. The ultimate departmentwide 
strategy should not just cobble together the plans of the individual 
services into a departmentwide strategy. In our view, as it develops 
the DOD-wide strategy, the department should take advantage of the 
opportunity to reexamine its approach to prepositioning as part of 
broader mobility considerations including its interrelationship with 
airlift and sealift. 

In the technical comments, the department also stated that the Army 
should not be criticized for its timing and lack of synchronization 
with a DOD strategy that had not yet been issued. The Army did expedite 
its strategy revision during the course of our review, completing it 
from start to finish in the latter half of 2006. The Army completed 
this revision while a broader strategy effort--specifically, a follow- 
on to the Mobility Capabilities Study focused on the future of 
prepositioning--was ongoing but had an unclear completion date. In a 
September 2005 report, we recommended that DOD develop a departmentwide 
strategy to set direction for and underpin the prepositioning programs 
of the services but this has still not been completed. Underscoring its 
interest in prepositioning--and consistent with our previous 
recommendation--the John Warner National Defense Authorization Act for 
Fiscal Year 2007 required the department to finalize a departmentwide 
prepositioning strategy by April 2007. Had the department implemented 
our recommendation in a more timely fashion, this synchronization 
concern would be moot and DOD may not have been called upon to 
establish a strategy for the department's prepositioning programs. 

The department concurred with our second recommendation that, once the 
Army's strategy is aligned with the DOD-wide strategy, the Secretary of 
the Army should develop an implementation plan to address the 
requirements, readiness reporting, facilities, and maintenance 
oversight issues that we identified in our report. The department 
stated that the Army had included an implementation plan in its revised 
prepositioning strategy that addressed these issues and that the 
implementation plan had been aligned with a joint staff instruction 
published in November 2006 that provides logistics planning guidance 
for prepositioning and a department directive dated December 2003 that 
provides war reserve materiel policy. As a result, the department 
stated that no additional direction is required. We disagree. The 
Army's implementation plan was to have been completed in December 2006, 
but was still unavailable as of the end of January 2007. As a result, 
GAO could not determine whether the elements of our recommendation have 
been addressed. However, we reviewed the recent logistics planning 
guidance and while the instruction provides general logistics planning 
guidance for prepositioned stocks, there are few specifics about 
requirements setting and readiness reporting for secondary items and 
operational project stocks, facilities, or maintenance oversight. We 
also reviewed the identified department guidance. While it does require 
the determination of war reserve materiel requirements, and annual 
reports of the existing levels of these items, we do not believe this 
is a systematic reporting of readiness. In fact, our 2005 report found 
that the department was not enforcing the readiness-reporting 
provision, and planned to rescind it. Neither Instruction addresses the 
optimum mix of storage and maintenance facilities or prescribes 
oversight requirements for the maintenance of prepositioned equipment 
to ensure that it is combat ready. Moreover, since these issues have 
been long-standing, recognized both in prior GAO reports and 
assessments made by the Army's own audit organizations, we continue to 
believe that additional direction is needed. 

We will send copies of this report to the Secretary of Defense and the 
Secretary of the Army. We will also make copies available to others 
upon request. In addition, this report will be available at no charge 
on the GAO Web site at [Hyperlink,http://www.gao.gov]. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. 

If you or your staff has any questions, please contact me at (202) 512- 
8365. Key contributors to this report are listed in appendix IV. 

Signed by: 

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

[End of section] 

Appendix I: Scope and Methodology: 

To assess whether the Army's report comprehensively addressed the 
required reporting areas in Public Law 109-163, we reviewed the Army's 
prepositioned stocks program. We obtained the Army's report and 
reviewed and compared it to the legislative mandate as well as other 
documents including Department of Defense (DOD) regulations, Army 
regulations that govern storage and maintenance of prepositioned 
stocks, and the Army Prepositioned Stocks Strategy 2012. We also 
reviewed Inspector General and Army Audit Agency reports on 
prepositioning issues as well as any relevant GAO reports. We 
interviewed officials in the Department of Defense Joint Staff, 
Department of the Army, Army Materiel Command, and the Army Sustainment 
Command and its subordinate units at each prepositioning location. We 
also collected and analyzed internal Army reports on inventory and 
readiness to verify the reported inventory levels and readiness rates 
of prepositioned stocks. 

To assess the major challenges facing the Army as it revises and 
implements its prepositioning program, we reviewed the Army 
Prepositioned Stocks Strategy 2012 and DOD regulations and documents 
pertaining to a joint prepositioning strategy, along with relevant past 
GAO, Inspector General, and Army Audit Agency reports. We interviewed 
officials from the Department of the Army, the Office of the Secretary 
of Defense for Policy, the Department of Defense Joint Staff, the Army 
Materiel Command, and the Army Sustainment Command and its subordinate 
units at prepositioning locations in Europe, South Korea, South 
Carolina, and Kuwait. We conducted site visits to Army prepositioned 
stock facilities at each location to observe firsthand the current 
status of their storage and maintenance facilities and also reviewed 
existing maintenance and storage procedures and oversight processes. We 
also examined the Army's planned revisions to its existing Army 
Prepositioned Stocks Strategy 2012 and the efforts on behalf of DOD to 
develop an overarching prepositioning strategy. We examined the level 
of coordination between the Army and DOD with regard to the new 
prepositioning strategies currently under development. We could not 
fully assess these strategies, as they are still in the process of 
being developed. We also documented current inventory levels, funding 
for the program, and equipment readiness rates by collecting and 
analyzing internal Army reports on inventory, funding, and readiness. 
We reviewed past reports prepared by GAO, the Army Audit Agency, the 
Army Materiel Command Inspector General, and the Army Logistics Support 
and Evaluation Team that identified problems with the prepositioning 
program. 

We conducted our review from February 2006 through October 2006 in 
accordance with generally accepted government auditing standards. We 
reviewed available data for inconsistencies and also verified with the 
Army information technology contractor in Kuwait that they review and 
validate the input data we used in the report. We determined that the 
data we used were sufficiently reliable for the purpose of this report. 

We interviewed officials, and obtained documentation when applicable, 
at the following locations: 

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

* U.S. Army Material Command, Ft. Belvoir, Virginia. 

* U.S. Army Forces Command, Ft. McPherson, Georgia. 

* U.S. Army Central Command, Ft. McPherson, Georgia. 

* U.S. Army Sustainment Command, Rock Island, Illinois. 

* U.S. Army Europe, Campbell Barracks, Germany. 

* 8th U.S. Army, Yongsan Garrison, South Korea. 

* U.S. Army Field Support Brigade, Seckenheim, Germany. 

* Material Support Center - Korea, Camp Carroll, South Korea. 

* U.S. Army Field Support Battalion - Livorno, Camp Livorno, Italy. 

* U.S. Army Field Support Battalion - Northeast Asia, Camp Carroll, 
Korea. 

* U.S. Army Field Support Battalion - Southwest Asia, Camp Arifjan, 
Kuwait. 

* U.S. Army Field Support Battalion-Afloat - Charleston, South 
Carolina. 

Unified Commands: 

* U.S. Forces Europe, Patch Barracks, Germany. 

* U.S. Forces Korea, Yongsan Garrison, South Korea. 

* Joint Chiefs of Staff, J-4, Washington, D.C. 

[End of section] 

Appendix II: Past Products Identifying Challenges Facing the Army and 
DOD Regarding Prepositioning Programs: 

The Army's prepositioning program has faced a number of long-standing 
challenges including inadequate oversight and management; equipment and 
facility excesses and shortfalls; and invalid, inaccurate, poorly 
defined, and otherwise questionable requirements. In addition to 
problems with the prepositioning program, the Army has also had 
difficulty associated with the successful implementation of strategic 
plans and programs. GAO, the Army Audit Agency, Army's and the 
Department of Defense's (DOD) Inspector Generals along with others have 
called attention to these problems in products issued over the years. 

Table 2 provides summaries of the challenges to the Army and DOD's 
prepositioning programs along with program implementation concerns 
identified in past GAO reports and testimonies issued between January 
1996 and September 2006. Table 3 provides summaries of similar issues 
identified in select products released by other organizations during 
the same time period. 

Table 2: GAO Products: 

Title: Force Structure: Army Needs to Provide DOD and Congress More 
Visibility Regarding Modular Force Capabilities and Implementation 
Plans, GAO-06-745 (September 2006); 
Key challenges identified: In September 2006, we reported that the Army 
had not completed key details of the equipping strategy for its modular 
force and, as a result, it is unclear what level of equipment units 
will have, how this strategy may affect the Army's equipment funding 
plans, and how well units with low priority for equipment will be able 
to respond to unforeseen crises. We also reported that the Army lacks a 
comprehensive and transparent approach to measure progress against its 
modularity objectives, assess the need for further changes to modular 
designs, and monitor implementation plans. We noted that without 
performance metrics and a comprehensive testing plan, decision makers 
will not have full visibility into how the modular force is currently 
organized, staffed, and equipped and, as a result, will not have 
sufficient information to assess the capabilities, cost, and risks of 
the Army's modular force implementation plans. 

Title: DOD's High-Risk Areas: Challenges Remain to Achieving and 
Demonstrating Progress in Supply Chain Management, GAO-06-983T (July 
2006); 
Key challenges identified: In July 2006, we testified that DOD has 
continued to make progress implementing the 10 initiatives in its 
supply chain management improvement plan, but it will take several 
years to fully implement these initiatives. We noted that although DOD 
has incorporated several broad performance measures in its supply chain 
management improvement plan, it continues to lack outcome-focused 
performance measures for many of the initiatives, making it difficult 
to track and demonstrate progress toward improving the three focus 
areas of requirements forecasting, asset visibility, and materiel 
distribution. We additionally reported that although DOD's plan 
includes four high-level performance measures that are being tracked 
across the department, these measures do not necessarily reflect the 
performance of the initiatives and do not relate explicitly to the 
three focus areas. Further, DOD's plan does not include cost metrics 
that might show efficiencies gained through supply chain improvement 
efforts. 

Title: Force Structure: Capabilities and Cost of Army Modular Force 
Remain Uncertain, GAO-06-548T (April 2006); 
Key challenges identified: In April 2006, we testified that although 
the Army is making progress creating modular units, it faces 
significant challenges in managing costs and meeting equipment and 
personnel requirements associated with modular restructuring in the 
active component and National Guard. We noted that the Army does not 
have a comprehensive and transparent approach to measure progress 
against stated modularity objectives and assess the need for further 
changes to modular designs. We additionally testified that the Army has 
not established outcome-related metrics linked to many of its 
modularity objectives and although it is analyzing lessons learned from 
Iraq and training events, the Army does not have a long-term, 
comprehensive plan for further analysis and testing of the designs and 
fielded capabilities. Finally, we testified that without performance 
metrics and a comprehensive testing plan, neither the Secretary of 
Defense nor congressional leaders will have full visibility into the 
capabilities of the modular force as it is currently organized, 
staffed, and equipped. 

Title: Defense Logistics: Preliminary Observations on Equipment Reset 
Challenges and Issues for the Army and Marine Corps, GAO-06-604T (March 
2006); 
Key challenges identified: In March 2006, we testified that both the 
Army and Marine Corps will face a number of ongoing and long-term 
challenges that will affect the timing and cost of equipment reset, 
such as Army and Marine Corps transformation initiatives, reset of 
prepositioned equipment, efforts to replace equipment left overseas 
from the active, National Guard, and Reserve units, as well as the 
potential transfer of U.S. military equipment and the potential for 
continuing logistical support to Iraqi Security Forces. We also 
testified that the Marine Corps and Army will have to better align 
their funding requests with the related program strategies to sustain, 
modernize, or replace existing legacy equipment systems. We testified 
that both services will have to make difficult choices and trade-offs 
when it comes to their many competing equipment programs. Finally, we 
noted that while the services are working to refine overall 
requirements, the total requirements and costs are unclear and raise a 
number of questions as to how the services will afford them. 

Title: DOD's High-Risk Areas: High-Level Commitment and Oversight 
Needed for DOD Supply Chain Plan to Succeed, GAO-06-113T (October 
2005); 
Key challenges identified: In October 2005, we testified that DOD's 
plan to improve supply chain management provides a good start and 
framework for addressing long-term systemic weaknesses and in focusing 
the multiyear effort to improve supply support to the warfighter. We 
noted that successful resolution of DOD's supply chain management 
problems will require continued efforts to complete and successfully 
implement the plan. Based on GAO's criteria for removing programs from 
the high-risk designation, we reported that it is important for DOD to 
sustain top leadership commitment and long-term institutional support 
for the plan; obtain necessary resource commitments from the military 
services, the Defense Logistics Agency, and other organizations; 
implement proposed improvement initiatives across the department to 
address root causes; identify performance metrics and valid data to use 
in monitoring the initiatives; and demonstrate progress toward meeting 
performance targets. 

Title: Defense Logistics: Better Management and Oversight of 
Prepositioning Programs Needed to Reduce Risk and Improve Future 
Programs, GAO-05-427 (September 2005); 
Key challenges identified: In September 2005, we reported that DOD 
faced near-term operational risks should another large-scale conflict 
emerge because existing prepositioned stocks had been heavily drawn to 
support operations in Iraq. We noted that some residual capability 
exists but many of the programs face significant inventory shortfalls 
and, in some cases, maintenance problems. We additionally reported that 
the department and the military services have provided insufficient 
oversight over DOD prepositioning programs resulting in long-standing 
problems with requirements determination and inventory management. 

Title: Defense Inventory: Actions Needed to Improve the Availability of 
Critical Items during Future Military Operations, GAO-05-275 (March 
2005); 
Key challenges identified: In March 2005, we reported on DOD's supply-
chain management during Operation Iraqi Freedom. We developed detailed 
case studies of nine supply items that were reported to be in short 
supply and could have had operational impacts, and found that U.S. 
troops experienced shortages of seven of the nine items that led, in 
some cases, to a decline in the operational capability of equipment and 
increased risk to troops. We identified five systemic deficiencies that 
contributed to shortages of the selected items, including (1) 
inaccurate and inadequately funded Army war reserve requirements, (2) 
inaccurate supply forecasts, (3) insufficient and delayed funding, (4) 
delayed acquisition, and (5) ineffective distribution. 

Title: High-Risk Series: An Update, GAO-05-207 (January 2005); 
Key challenges identified: In January 2005, we reported that DOD's 
supply- chain management had experienced significant weaknesses in its 
ability to provide efficient and effective supply support to war 
fighters. While DOD reports showed the department owning about $67 
billion of inventory, shortages of certain critical spare parts were 
adversely affecting equipment readiness and contributing to maintenance 
delays. DOD also lacked visibility and control over the supplies and 
spare parts it owned and did not have the ability to provide timely or 
accurate information on the location, movement, status, or identity of 
its supplies. 

Title: Military Prepositioning: Observations on Army and Marine Corps 
Programs During Iraqi Freedom and Beyond, GAO-04-562T (March 2004); 
Key challenges identified: In March 2004, we testified that during 
Operation Iraqi Freedom, the Army's prepositioning program had some 
equipment that was outdated or did not match unit needs. The program 
also faced shortfalls, such as trucks, spare parts, and other items. We 
noted that shortages in Army prepositioned and war reserve spare parts 
had been a long-standing systemic problem. We likewise reported that 
the theater supply-and-distribution system became overwhelmed and was 
worsened by the inability to track assets available in theater, which 
meant that warfighters did not know what was available. 

Title: Defense Logistics: Preliminary Observations on the Effectiveness 
of Logistics Activities During Operation Iraqi Freedom, GAO-04-305R 
(December 2003); 
Key challenges identified: In December 2003, we reported that during 
Operation Iraqi Freedom poor asset visibility and insufficient and 
ineffective theater distribution capabilities contributed to 
substantial logistics support problems. DOD and military service 
officials raised a number of issues that may have contributed to the 
logistics problems, including (1) shortages of some spares or repair 
parts needed by deployed forces, (2) a reported mismatch between Army 
prepositioned equipment and unit needs, (3) DOD contractors used for 
logistics support during Operation Iraqi Freedom were not always 
effective, and (4) physical security at ports and other distribution 
points in the theater was not always adequate to protect assets. 

Title: Military Readiness: New Reporting System Is Intended to Address 
Long-Standing Problems, but Better Planning Is Needed, GAO-03-456 
(March 2003); 
Key challenges identified: In March 2003, we reported that DOD used 
readiness measures that varied 10 percentage points or more to 
determine readiness ratings and often did not report the precise 
measurements outside DOD. We additionally reported that DOD had 
complied with most, but not all, of the legislative readiness-reporting 
requirements and, as a result, Congress was not receiving all the 
information mandated by law. DOD issued a directive in June 2002 to 
establish a new comprehensive readiness-reporting system. However, as 
of January 2003, DOD had not developed an implementation plan 
containing measurable performance goals, identification of resources, 
performance indicators, and an evaluation plan to assess progress in 
developing the new reporting system. 

Title: Major Management Challenges and Program Risks: Department of 
Defense, GAO-03-98 (January 2003); 
Key challenges identified: In January 2003, we reported that 
inefficient inventory management practices represented one of the most 
serious weaknesses in DOD's logistics operations. While DOD's inventory 
value had been declining for the previous 10 years, GAO's past and 
current work in the area indicated that DOD (1) continued to store 
unnecessarily large amounts of material, with about half of its 
secondary inventory exceeding then- war reserve or current operating 
requirements; (2) purchased material for which there was no valid 
requirement; (3) experienced equipment readiness problems because of a 
lack of key spare parts; and (4) maintained inadequate visibility over 
material being shipped to and from military activities. 

Title: Defense Inventory: Improved Industrial Base Assessments for Army 
War Reserve Spares Could Save Money, GAO-02-650 (July 2002); 
Key challenges identified: In July 2002, we reported that the Army's 
approach to industrial-base capability assessments lacked key 
attributes that included the collection of current industry data, the 
analysis of that data, and the creation of management strategies for 
improving wartime spare parts availability. We noted that out-of-date 
data could result in reduced readiness and inflated or understated war 
reserve spare parts funding requests within budget submissions to 
Congress, and the Army's ability to identify long lead times and create 
management strategies to reduce lead times and thus the amount of 
inventory needed. 

Title: Defense Inventory: Army War Reserve Spare Parts Requirements Are 
Uncertain, GAO-01-425 (May 2001); 
Key challenges identified: In May 2001, we reported that 
notwithstanding the apparent shortfall in funding for war reserve spare 
parts, our review showed uncertainties about the accuracy of the Army's 
requirements and funding needs in that area. Specifically, we found 
that (1) the best available data regarding the rate at which spare 
parts would be consumed during wartime had generally not been used in 
determining war reserve requirements for spare parts, (2) a potential 
mismatch existed between the Army's methodology for determining spare 
parts requirements and the Army's planned battlefield maintenance 
practices, (3) the capacity of the industrial base to support the parts 
requirements of the two major theaters of war scenario was not well 
defined or based on industry data, and (4) emerging issues, such as 
force restructuring actions, could significantly affect future war 
reserve requirements. 

Title: Military Prepositioning: Army and Air Force Programs Need To Be 
Reassessed, GAO/NSIAD-99-6 (November 1998); 
Key challenges identified: In November 1998, we reported that the Army 
and Air Force had poorly defined, outdated, or otherwise questionable 
requirements in the major programs that GAO reviewed. The Army and the 
Air Force had reported significant shortages and poor maintenance 
conditions in their prepositioning programs. In some cases, however, 
reliable data to assess inventory fill and maintenance condition were 
unavailable. Thus, the precise readiness of the prepositioned stocks--
and the impact of any shortfalls--was difficult to determine because of 
the questionable requirements that underpinned the programs and the 
poor information that the services used to manage the programs. 

Title: Afloat Prepositioning: Not All Equipment Meets the Army's 
Readiness Goal, GAO/NSIAD-97-169 (July 1997); 
Key challenges identified: In July 1997, we reported that of the Army's 
unit sets considered when reporting the readiness of the brigade set of 
war reserve equipment; about 25 percent did not meet the Army's 
readiness goal for full-mission capability. According to Army 
maintenance records, some equipment aboard prepositioning ships had 
been reported as nonmission capable since September 1995. These records 
also erroneously identified some nonmission-capable equipment as 
repairable aboard ship, although Army officials said that many repairs 
could not be made until the equipment was downloaded. One factor that 
contributed to lower readiness rates was that some equipment was not 
fully mission capable when it was originally loaded on prepositioning 
ships. Other factors include the deterioration of the equipment while 
in storage aboard ships and the limited ability to conduct maintenance 
on the equipment while in storage. 

Title: Army War Reserves: DOD Could Save Millions by Aligning Resources 
With the Reduced European Mission, GAO/NSIAD-97-158 (July 1997); 
Key challenges identified: In July 1997, we reported that DOD could 
have saved about $54 million per year in personnel costs once the Army 
removed unneeded war reserve equipment from central Europe and aligned 
its resources with the reduced mission. Army data showed that of 
128,000 items in central Europe identified as available for 
redistribution outside of Europe, the Army had firm plans for about 
54,000 items, had proposed--but had not funded or implemented--the 
plans for about 27,000 items, and had no plans for about 46,000 items 
because it found no known requirement for them in the war reserve 
program. 

Title: Defense Inventory Management: Problems, Progress, and Additional 
Actions Needed, GAO/T-NSIAD-97-109 (March 1997); 
Key challenges identified: In March 1997, we testified that inventory 
management problems had plagued DOD for decades. We had recently 
reported that about half of DOD's secondary inventory was not needed to 
support war reserve or current operating requirements. Most of the 
problems that contributed to the accumulation of this unneeded 
inventory still existed, such as outdated and inefficient inventory 
management practices that frequently did not meet customer demands, 
inadequate inventory oversight, weak financial accountability, and 
overstated requirements. We noted that while we continued to see 
pockets of improvement, DOD had made little overall progress in 
correcting systemic problems that had traditionally resulted in large 
unneeded inventories. 

Source: GAO. 

[End of table] 

Table 3: Other Products: 

Title: Management of Army Prepositioned Stocks. Headquarters, 
Department of the Army, U.S. Army Audit Agency, A2006-0200-ALL (August 
2006); 
Key challenges identified: In August 2006, the Army Audit Agency 
reported that U.S. Army Material Command management practices for 
overseeing the Army prepositioned stocks program and ensuring it 
remained responsive to warfighters needs appeared to be on automatic 
pilot with little management intervention. They reported that this 
inattention has resulted in supply problems including problems 
associated with requirements determination and inventory management. 

Title: Army Prepositioned Stocks in Europe. Headquarters, Department of 
the Army, U.S. Army Audit Agency, A2006-0197-ALE (August 2006); 
Key challenges identified: In August 2006, the Army Audit Agency 
reported that the requirements identified in the Army's APS Strategy 
2012 would not effectively support responsibilities in the European 
theater or Army transformation goals. The Army Audit Agency indicated 
that while the APS strategy included requirements for six operational 
projects, only two were valid - special operations forces and aerial 
delivery. According to the Army Audit Agency, the remaining operational 
projects were either invalid or questionable for the U.S. European 
Command Area of Responsibility and proponents of these projects did not 
do required reviews and revalidations of the requirements. 

Title: Military Construction Projects Supporting Army Prepositioned 
Stocks in Europe. Headquarters, Department of the Army, U.S. Army Audit 
Agency, A2006-0149-ALE (June 2006); 
Key challenges identified: In June 2006, the Army Audit Agency reported 
that the Army was continuing with its construction projects at Livorno, 
Italy, despite elimination of the original requirements for the 
projects and uncertainty about the facility's future mission. They 
additionally reported that the continuation of construction without a 
permanent requirement did not justify expenditure of Military 
Construction, Army funds appropriated for the project and violated the 
spirit in which Congress appropriated funds for the project. 

Title: Operation Iraqi Freedom (OIF) Maritime Prepositioning Force 
(MPF) Reconstitution, Regeneration, and Reembarkation (R3)Operations: 
Summary Findings, Center for Naval Analyses, CAB D0009974.A2/Final 
(June 2004); 
Key challenges identified: In June 2004, the Center for Naval Analyses 
reported that although Marine Corps Maritime Prepositioning Force 
operations in Iraq could be characterized as a success, the execution 
of reconstitution, regeneration, and reembarkation was neither simple 
nor easy. Challenges and issues included (1) a lack of detailed 
published policies and guidance, and servicewide knowledge and 
experience, in planning and executing operations; (2) simultaneous 
conduct of combat and operations; and (3) a lack of effective systems, 
organizations, and procedures for tracking and accounting for 
prepositioned equipment after it was downloaded. 

Title: Operational Project Stocks - Phase II, Headquarters, Department 
of the Army, U. S. Army Audit Agency, A-2004-0108-AML (February 2004); 
Key challenges identified: In February 2004, the Army Audit Agency 
reported that some operational projects--one of four categories of Army 
prepositioned stocks--had (1) invalid intended purposes; (2) 
inaccurate, overstated, outdated, or questionable requirements; (3) 
insufficient quantities of equipment on hand; or (4) a lack of 
requirements for essential equipment. Consequently, about $472 million 
of the roughly $1.5 billion in requirements reviewed were invalid and 
$280 million were questionable. 

Title: U.S. Army Matériel Command (USAMC) Operation Iraqi Freedom (OIF) 
Lessons Learned Conference, 10-11 September 2003, Redstone Arsenal, 
Alabama; 
Key challenges identified: In September 2003, the U.S. Army Matériel 
Command sponsored an Operation Iraqi Freedom lessons learned conference 
during which 27 major issues were identified in such areas as 
personnel, supply, maintenance, and distribution. For example (1) 
supply-related lessons learned included the need to relook at 
requirements determinations, asset management and visibility, 
prepositioned stocks, and ammunition warfighter support; (2) 
maintenance-related lessons learned included the need to improve 
prepositioning maintenance, readiness and other reporting, 
accountability, and forward repair activity; and (3) distribution- 
related lessons learned included the need to modify force structure and 
doctrine to support the distribution system, appoint a single DOD 
distribution manager, and develop and implement a business system. 

Title: Systematic Inspection of the Material Condition of Army War 
Reserve Stocks, U.S. Army Matériel Command Inspector General (August 
2001); 
Key challenges identified: In August 2001, the Army Matériel Command 
Inspector General reported the following problems with Army war reserve 
sustainment stocks related to the Army Prepositioned Stock program: (1) 
a lack of centralized strategic operational direction; (2) insufficient 
funding for program requirements; (3) a lack of data integrity in 
automated systems; (4) adverse mission impact caused by readiness 
reporting procedures and overall operational practices; (5) mismatches 
between recorded condition codes of matériel and true conditions; (6) 
no established procedures for test, measurement, and diagnostic 
equipment support; (7) an inability of the command to effectively 
support the Army's wartime mortuary affairs mission; (8) matériel 
excess to requirements stored at prepositioned sites; (9) ineffective 
government oversight of a contractor allowing decreased readiness and 
increased costs; and (10) bulk fuel, potable water, and other assets to 
support forces during deployment were not part of the package. 

Title: Army Prepositioned Stock Program, Combat Equipment Group - 
Europe, U.S. Army Audit Agency, AA 98-138 (March 1998); 
Key challenges identified: In March 1998, the Army Audit Agency 
reported that while the Army Combat Equipment Group properly accounted 
for its war reserve stocks stored in Europe, improved accounting 
procedures were needed for its war reserve stocks loaned in support of 
Operation Joint Endeavor in Bosnia. The audit agency additionally 
reported that repair parts had been identified during the audit that 
were not needed to support the deployable unit sets authorized for the 
war reserve program. Moreover, while war reserve equipment was 
generally maintained and stored properly, some of the combat equipment 
companies retained too many line items, maintained excess stockage 
levels, and didn't establish an effective method to monitor maintenance 
operations. 

Title: Sustainment Requirements for the Army Prepositioned Stock 
Program, U.S. Army Audit Agency, AA 98-99 (February 1998); 
Key challenges identified: In February 1998, the Army Audit Agency 
reported that a substantial number of undesignated war reserve assets 
were stored in Europe that could have been used to satisfy new 
sustainment stock requirements. 

Title: Total Asset Visibility-Operational Projects, U.S. Army Audit 
Agency, AA 98-31 (November 1997); 
Key challenges identified: In November 1997, the Army Audit Agency 
reported problems in the Total Asset Visibility capability for Army 
operational projects, including (1) incomplete or unreliable on-hand 
asset balances, (2) a lack of visibility over loaned assets, (3) 
inadequate identification of key management controls in Army policy 
regulations, (4) weaknesses in data integrity, and (5) failure of Army 
managers at both the wholesale and retail levels to redistribute assets 
to improve readiness and reduce requirements. 

Title: Equipment Pre-positioned Afloat, Department of Defense Inspector 
General, 97-054 (December 1996); 
Key challenges identified: In December 1996, the DOD Inspector General 
reported that the Army had rapidly expanded its afloat prepositioning 
program without first publishing criteria, policy, plans, and doctrine 
resulting in a possible inability to ensure effective equipment 
management in support of the combatant commanders. 

Source: GAO. 

[End of table] 

[End of section] 

Appendix III: Comments from the Department of Defense: 

Note: GAO comments supplementing those in the report text appear at the 
end of this appendix. 

Deputy Under Secretary Of Defense For Logistics And Materiel Readiness: 
3500 Defense Pentagon: 
Washington, DC 20301-3500: 

January 17, 2007: 

Mr. William M. Solis: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. Solis: 

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-07-144, "Defense Logistics: Army Needs to Take Steps to 
Address Prepositioning Strategy, Requirements, Facilities and 
Maintenance Oversight Issues," dated December 14, 2006 (GAO Code 
350921). 

The Department partially concurs with each recommendation. An 
explanation of the DoD position is enclosed. Additionally, since 
portions of the draft report supporting the recommendations could be 
misleading, technical comments are provided to improve the accuracy and 
clarity of the draft report. The Department appreciates the opportunity 
to comment on the draft report. 

Sincerely, 

Signed by: 

Jack Bell:  

Enclosures: 
As stated: 

GAO Draft Report - Dated December 14, 2006 GAO Code 350921/GAO-07-144: 

"Defense Logistics: Army Needs to Take Steps to Address Prepositioning 
Strategy, Requirements, Facilities and Maintenance Oversight Issues" 

Department Of Defense Comments To The Recommendations: 

Recommendation 1: The GAO recommended that the Secretary of Defense 
direct the Secretary of the Army to take steps to synchronize the 
Army's prepositioning strategy with the DoD-wide strategy to ensure 
that future investments made for the Army's prepositioning program 
align with the anticipated DoD-wide prepositioning strategy. 

DoD Response: Partially Concur. The DoD agrees with the need to 
synchronize Service prepositioning strategies with the DoD strategic 
positioning policy. The fiscal year 2007 National Defense Authorization 
Act directs that, "Not later than six months after the date of 
enactment of this Act, the Secretary of Defense shall establish the 
strategic policy on the programs of the DoD for the prepositioning of 
materiel and equipment." In order to support the development of this 
mandated policy and ultimately publish a comprehensive strategy for the 
composition, location, maintenance, employment and reconstitution of 
stocks, the Army is participating fully in the ongoing Mobility 
Capability Study 2006 on pre-positioning. Under the auspices of that 
study and the Global Defense Posture Review, the Army's strategy is 
being incorporated into these studies as DoD continues its efforts 
toward the development of a DoD-wide Prepositioning (PREPO) strategy. 
In anticipation of this study, the Army developed its own Service 
strategy that supports the anticipated DoD-wide strategic "policy" in 
order to ensure that future investments made for the Army's 
prepositioning program are aligned. Additional direction regarding the 
synchronization of strategies/policy is not required. 

Recommendation 2: The GAO recommended that once the strategic direction 
is aligned with the DoD strategy, the Secretary of the Army develop an 
implementation plan that: 

* maintains ongoing reevaluation of the secondary item and operational 
project stock requirements as well as establishes systematic readiness 
measurement and reporting of secondary items and operational project 
stock programs; 

* identifies the optimal mix of storage and maintenance facilities at 
each location to support the emerging strategy; and: 

* prescribes oversight requirements for the maintenance of 
prepositioned equipment to ensure that equipment is ready for combat. 

DoD Response: Concur. This guidance already exists in the recently 
revised Chairman, Joint Chiefs of Staff Instruction 4310.01 B 
(Logistics Planning Guidance for Global Pre-Positioning Materiel 
Capabilities) dated November 1, 2006 and DoD Directive 3110.6 (War 
Reserve Materiel Policy). The Army's implementation plan, included in 
the Army Prepositioned Stocks Strategy 2013, is already aligned with 
this guidance as a result of their participation in the Joint Working 
Group, where the items in the GAO recommendation are specifically 
monitored by OSD and the Joint Staff. Additional direction is not 
required. 

Technical Comments: 

GAO Draft Report - Dated December 14, 2006 GAO Code 350921/GAO-07-144: 

"Defense Logistics: Army Needs to Take Steps to Address Prepositioning 
Strategy, Requirements, Facilities and Maintenance Oversight Issues" 

Highlights Page, Para 1: What GAO Found: 

"The Army's April 2006 report on the status of its prepositioning 
program addressed the areas required by Congress; for example, it 
included descriptions of operational capabilities, as well as inventory 
shortfalls plus strategic capabilities assessments required in future 
operating environments shaped by insights gained through QDR 06 
(change: expressed in terms of procurement costs. However, the Army has 
significantly shifted its prepositioning strategy since that report was 
issued. Based primarily on budget reprogramming decisions but 
influenced as well by worsening Army wide equipment shortfalls.) The 
Army concluded in summer 2006 that its prepositioning strategy was no 
longer viable and began work on a revised strategy. The Army's revised 
strategy proposes significant changes to the program by 2013, including 
less reliance on heavy combat equipment afloat and the expansion of 
heavy equipment in the European theater (remove: in Kuwait and Italy)
As a result, the Army's April 2006 report to Congress is outdated, and 
neither Congress nor the Department of Defense (DoD) should base 
funding decisions on it," 

Comment: Change for clarity / accuracy. The Army APS 2012 strategy was 
changed due to insights gained during QDR 06 and other strategic 
initiatives, not due to budget reprogramming decisions. 

Highlights Page, Paragraph 2: What GAO Found: 

"The Army faces several strategic and management challenges as it 
revises and implements its prepositioning program. From a strategic 
perspective, the Army will align its strategy with the forthcoming DoD 
strategic "policy "(underdevelopment) which will provide guidance for 
prepositioning capabilities, training, readiness and land base 
requirements. The DoD policy will result in the Army creating/modifying 
its strategy in accordance with the guidance provided in the DoD 
policy. (change: gauge how well it is emerging strategy will align with 
DOD plans currently under development. The Army plans to begin 
implementing its revised strategy by the end of 2006. However, DOD has 
a department wide prepositioning study underway intended to set 
strategy and joint doctrine to guide the departments prepositioning 
programs, but this will not be completed for several months. As a 
result, the Army will implement its strategy before the DoD study is 
completed and is at risk of resourcing requirements that may be 
superseded by the DoD strategy. Moreover, because prepositioning is 
interconnected with airlift, sealift, and basing, the Army's decisions 
will have an as yet undetermined effect on these areas.)

Comment: Change for clarity/accuracy: 

Page 4, para 2, line 3: 

* "Inability to gauge its alignment with DoD-wide prepositioning policy 
strategy (change: strategy). 

Comment: Change for clarity/accuracy: 

Page 5, para l, line 7: 

* "The fiscal year 2007 National Defense Authorization Act required DoD 
to complete a DoD-wide strategic policy by April 2007 In the interim 
the Army, at the time we finished our work, was planning to implement 
their internal strategy in accordance with their required missions and 
capabilities. Even though DoD and Army officials told us they have 
coordinated prepositioning plans, the timing of the two strategies 
could cause disconnects between the strategies that will need to be 
addressed after the Army's strategy is implemented. (change: The fiscal 
2007 defense authorization act required DoD to complete a DoD wide 
strategy by mid April 2007. At the time we finished our work, the Army 
was planning to implement their strategy by the end of 2006- months 
ahead of the DoD wide effort. The most significant problem resulting 
from the timing, is that the Army cannot be assured that its efforts 
will be aligned with DoD wide efforts still ongoing. Even though DOD 
and Army officials told us the have coordinated prepositioning plans, 
the timing of the two strategies is not synchronized. As a result, DoD 
could not be restricted in developing an optimal DoD wide strategy 
because the Army strategy already exists or the Army could be at risk 
of filling requirements that will be superseded when the DoD wide 
strategy is issued. Moreover, prepositioning is interconnected with 
airlift, sealift, and basing so the Army's decisions will have an as 
yet undetermined effect on lift requirements and basing. Such potential 
problems are avoidable if the strategies are synchronized.)

Comment: Recommend the paragraph be modified The Army should not be 
criticized for timing and lack of synchronization with an updated DoD 
strategic policy that has not been yet issued. The Services create 
individual prepositioning strategies in accordance with the required 
missions and capabilities. 

Page 6, para 1, line 2: 

"...be revalidated every S years, we recommended in September 2005 that 
the Army address this long - standing problem. In response the Army 
conducted a revalidation of their Operational Project Stocks in April 
06. As of the date of this report, 98% of all the Stocks had completed 
that validation. (change: but the most revalidation for many of the 
projects was last conducted in 1998. We recommended in September 2005 
that the Army address this longstanding problem. In response, the Army 
has taken several steps to address it, but reviews of the secondary 
item and operational projects requirements were still ongoing when we 
completed our work in October 2006. Also, while the Army measures 
readiness of prepositioned equipment programs by assessing inventory 
levels against requirements and the maintenance condition of on hand 
equipment, the Army does not systematically measure or report readiness 
for the secondary item and operational project programs. Without sound 
requirements or reporting mechanisms, The Army cannot reliably assess 
the impact of any shortfalls, the readiness of its programs, or make 
informed investment decisions about them.)

Comment: Change for accuracy. The Department of the Army started 
tracking War Reserve Secondary Items using the Strategic Management 
System in June 2006. The Strategic Management System is a monthly 
requirement that provides visibility to the Army Senior Leadership of 
the equipment on-hand-and equipment readiness of the Army Prepositioned 
Stocks at the various worldwide locations i.e. Continental United 
States, Europe, Afloat, Northeast Asia and Southwest Asia. It provides 
the Current Year (2007), the Budget Year (2008), the Program Objective 
Memorandum and Fiscal Year-07 Supplemental funding status for War 
Reserve Secondary Items. Included in this report are the Authorized 
Stockage List, Prescribed Load List, Unit Basic Load, Operational 
Project Stocks and Sustainment Stocks funding information for each of 
the locations. The Strategic Management System process is a key 
component to enhancing the Army's ability to support future contingency 
and wartime operational requirements. Additionally, in October 2006 the 
Army began a test of a new process to identify War Reserve Secondary 
Items requirements based on using real world demand data gathered from 
Operations Iraqi Freedom and Enduring Freedom. 

Page 9, para 4: 

* "War reserve sustainment stocks include: 

- Items to sustain the battle until CONUS resupply can be ramped up to 
war time levels and arrive in theater. 

- War Reserve Secondary Items include rations, clothing and textiles, 
construction and barrier materiel, medical supplies and repair parts 
and major assemblies (reparables and consumables)." 

(Change: 
- Replacement equipment for losses in early stages of operations or 
until unit resupply is established. 
- Major end items such as aircraft engines and tracked vehicles. 
- Secondary items such as meals, clothing, petroleum supplies, 
construction materials, ammunition, medical materials, and repair 
parts.)

Comment: Change for clarity/accuracy. The GAO report incorrectly 
defines what compromises War Reserve Sustainment Stocks. 

Page 10, para 3: 

"The Army's April 2006 Report To Congress Addressed The Areas 
Required(change:  But The Army Strategy Is Evolving)

Comment: Change for clarity/accuracy. 

Page 10, para 4, line 8: 

"The Army's April 2006 report to congress on the status of its 
prepositioned program addressed the areas required by Congress, but the 
Army has significantly shifted its prepositioning strategy since then. 
The Army's report included descriptions of operational capabilities as 
outlined in the Army Prepositioned Stocks Strategy 2012, addressed the 
maintenance condition of prepositioned equipment; and noted recent 
efforts to improve management and maintenance oversight of the program, 
including forming an independent inspection team. (change: However, 
since the report's publication, the Army has begun a reexamination of 
its overall prepositioning strategy. Based primarily on recent budget 
cuts to the program as part of the DoD program review as well as 
equipment shortfalls throughout the service the Army concluded that its 
Prepositioned Stocks Strategy 2012 was no longer viable and began 
working on a revised strategy that was approved by Army leaders in late 
August 2006 and is expected to be completed by the end of 2006. 

Comment Change for clarity/accuracy: 

Page 11, para 1, last sentence: 

"It did stipulate, however, that the equipment set was undergoing reset 
repair, replacement and recap." 

Comment: Change for accuracy. 

Page 11, para 3, line 2: 

"In particular, an internal DoD reprogramming action required the Army 
to offload a Heavy Brigade Combat Team equipment set stored on a 
prepositioned ship and redistribute it to meet existing equipment 
shortfalls and reduce costs. 

Comment: Change for accuracy. 

Page 12, para 1, line 7: 

"This decision effectively reduced the Army's program in the near term 
from two to one Heavy Brigade Combat Team afloat, with implications for 
the (change: Army's) Combatant Commands' operational plans in both the 
near and longer term." 

Comment: Change for accuracy. 

Page 12, para 2, line 1: 

"The Army's examination of the global strategic context in 2013 and 
beyond and future operating environments shaped by insights gained 
through QDR 06 led to the development of a new strategy. Several 
factors combined to create a ripple effect that impacted the viability 
of the Army Prepositioned Stocks 2012 Strategy. Equipment shortfalls 
made it difficult for the Army to meet the requirements in the strategy 
at least partly because Army prepositioned stock equipment was 
continuing to be drawn to support ongoing operations. Also, the Army 
transformation to modularity exacerbated shortfalls in certain types of 
equipment and created excesses in others. In addition, the Army 
eliminated most of the remaining facilities and prepositioned stocks 
from Western Europe. (change: but was completing new maintenance and 
storage facilities in Italy which needed a mission). As a result, the 
Army's 2006 report was outdated soon after its publication and should 
not be used by Congress or DoD for funding decisions." 

Comment: Change for accuracy. 

Page 13, para 3, line 1: 

"DoD has efforts underway that will address gaps identified in GAO's 
September 2005 report, but have implications for the Army's efforts. 
First, to address Army Prepositioned Stocks in department-wide 
oversight, DoD convened a working group that includes representatives 
from the Office of the Secretary of Defense, Joint Staff, Defense 
Logistics Agency, the Army, Joint Forces Command and the other Services 
to develop joint doctrine for the prepositioning programs. 

Comment: Change for accuracy: 

Page 23, Table 1: Status of Facilities at Army Prepositioned Stock 
Locations: 

Insert: "Qatar Camp As Sayliyah, Qatar. The Qatar facilities, which 
were completed in 1997, included 26 warehouses of about 60KSQFT each 
and two large maintenance shops, all dedicated to the ARMY 
PREPOSITIONED STOCKS-5 mission. During the recent Iraq war, 17 
warehouses were diverted from ARMY PREPOSITIONED STOCKS storage to DA 
priority missions. Some diverted warehouses may be returned to ARMY 
PREPOSITIONED STOCKS use at some future date. 12 soft-skinned warehouse 
extensions were installed in 2005 to provide additional interim ARMY 
PREPOSITIONED STOCKS storage space of about 110KSQFT. Numerous minor 
construction projects (O&MA funded) to meet current needs are proposed 
or in progress. 

Falcon 78, Qatar: Ammo Storage and Maintenance: 20 earth-covered 
storage igloos, 9 bermed upload sunshades (double stall); dunnage 
sunshade, hardened processing/storage building. No facility investment 
required. " 

Comment: Change for accuracy. 

GAO's Responses to DOD's Technical Comments: 

1. DOD comments indicate that the reason the Army shifted its 
prepositioning strategy in 2006 was not due to budget reprogramming 
decisions; instead it was due to the 2006 Quadrennial Defense Review. 
We interviewed Army officials during the summer of 2006 who told us 
that the budget reprogramming decision and equipment shortfalls 
throughout the Army were the main impetus of the strategy review. We 
have added the Army's assertion that the quadrennial review influenced 
the decision to the text. 

2. DOD indicates that the DOD policy under development "will result in 
the Army creating/modifying its strategy in accordance with the 
guidance in the DOD policy" when issued. We have added the department's 
assertion to the text. We agree that having an Army implementation plan 
in place before the DOD policy is issued will result in the need to 
modify the Army's strategy. However this is an apparent inconsistency 
with the main text of the department's comments stipulating that the 
Army's completed strategy will be incorporated into the DOD-wide 
strategy. As a result, we continue to believe that additional 
department-level direction is needed to ensure that future investments 
made by the Army are aligned with DOD policy. 

3. We believe that strategy is a better description as it provides 
linkage to the recommendation in our 2005 report calling for a DOD-wide 
prepositioning strategy. 

4. The department stated that the Army should not be criticized for 
creating an implementation strategy before the DOD policy is issued. 
Our intent was not to criticize but to demonstrate the potential risks 
associated with individual service strategies being implemented before 
the department's strategy is issued. In a September 2005 report GAO 
recommended that DOD develop a departmentwide strategy to set direction 
for and underpin the prepositioning programs of the services but this 
has still not been completed. The Army can ill afford to invest scarce 
resources to meet requirements that will not be aligned with the DOD 
policy when issued. 

5. The department disagreed with several aspects of our description of 
the operational project and secondary item programs. We have included 
additional information to the report that, in response to a past GAO 
recommendation, the Army has conducted revalidations of most 
operational project stocks. Further, the Army asserted that it tracks 
the funding of the prepositioned secondary items and operational 
project stocks as part of the Army's Strategic Management System and 
that this constitutes readiness reporting. We disagree. The 
requirements underpinning these programs are questionable, and funding 
information is inadequate for determining readiness. 

6. We have changed the text to reflect the department's definition of 
war reserve sustainment stocks. 

7. Since the Army strategy evolved during our review, we continue to 
believe our caption better reflects the substance. 

8. See comment 1. 

9. We have changed the text to delete "reset". 

10. We have changed the text to insert "DOD". 

11. We have made changes to the text to reflect the role of Combatant 
Commanders in operational planning. 

12. The department's suggested language indicated that the shift in 
strategy was the result of the 2006 Quadrennial Review. We have 
reflected this throughout the report. The department also suggested 
deleting language in the draft report concerning the lack of mission in 
Italy in the previous Army strategy but offered no reason why this 
information should be deleted. When initially approved, the $55 million 
construction project in Italy was intended to support the storage of a 
prepositioned combat brigade team equipment set there, but this 
requirement had been eliminated in the 2012 strategy leaving the 
facility with no mission. The Army decided to complete the construction 
as it was more costly to cancel than complete, and the Army's 2013 
strategy indicates placing a combat brigade team equipment set at that 
location even though existing operational and contingency plans for the 
area do not require this type of equipment. We have retained this 
information in the report because we believe this information 
illustrates the need for better facilities planning by the Army. 

13. We have made changes to the text to include the Joint Forces 
Command in DOD's working group. 

14. We added information to reflect the facilities in Qatar. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

William M. Solis, (202) 512-8365: 

Acknowledgments: 

In addition to the contact named above, John Pendleton, Assistant 
Director, Jeff Kans, Travis Thomson, Jennifer Jebo, Erika Prochaska, 
and Cheryl Weissman also made key contributions to this report. 

FOOTNOTES 

[1] DOD, The National Defense Strategy of the United States of America 
(March 2005). 

[2] This analysis was performed in the Mobility Capabilities Study, 
released in December 2005. 

[3] GAO, Defense Logistics: Better Management and Oversight of 
Prepositioning Programs Needed to Reduce Risk and Improve Future 
Programs, GAO-05-427 (Washington, D.C.: Sept. 6, 2005). 

[4] GAO, Defense Logistics: Preliminary Observations on Equipment Reset 
Challenges and Issues for the Army and Marine Corps, GAO-06-604T 
(Washington, D.C.: Mar. 30, 2006). 

[5] GAO-05-427. 

[6] The Act (Pub.L. No. 109-163, § 351 (2006)) specifically required 
the Comptroller General to (1) determine whether the Army's report 
comprehensively addressed the required reporting items, and (2) 
determine the extent to which any shortfall or other issues reported by 
the Secretary of the Army or identified by the Comptroller General had 
been addressed including an assessment of any related plans to address 
shortfalls in the future. 

[7] The new strategy will be the Army Prepositioned Stock Strategy 
2013. 

[8] Pub. L. No. 109-364, § 351 (2006). 

[9] GAO, Military Prepositioning: Army and Air Force Programs Need To 
Be Reassessed, GAO/NSIAD-99-6 (Washington, D.C.: Nov. 16, 1998). 

[10] Army Regulation 740-1, Storage and Supply Activity Operations 
(Sept. 9, 2002). 

[11] GAO-05-275. 

[12] The RAND Corporation, Sustainment of Army Forces in Operation 
Iraqi Freedom: Major Findings and Recommendations (Santa Monica, 
Calif.: 2005). 

[13] GAO, Military Prepositioning: Army and Air Force Programs Need To 
Be Reassessed, GAO/NSIAD-99-6 (Washington, D.C.: Nov.16, 1998). 

[14] Corrosion is defined under 10 U.S.C. § 2228 as the deterioration 
of a material or its properties caused by a reaction of that material 
with its chemical environment. 

[15] Quality assurance inspectors perform a variety of tasks, including 
initial acceptance of repaired equipment from the maintenance 
contractor and monitoring of contractor-performed preventative 
maintenance checks. 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site (www.gao.gov). Each weekday, GAO posts 
newly released reports, testimony, and correspondence on its Web site. 
To have GAO e-mail you a list of newly posted products every afternoon, 
go to www.gao.gov and select "Subscribe to Updates." 

Order by Mail or Phone: 

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to: 

U.S. Government Accountability Office 441 G Street NW, Room LM 
Washington, D.C. 20548: 

To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202) 
512-6061: 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 U.S. 
Government Accountability Office, 441 G Street NW, Room 7125 
Washington, D.C. 20548: 

Public Affairs: 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800 
U.S. Government Accountability Office, 441 G Street NW, Room 7149 
Washington, D.C. 20548: