Warfighter Support: Improved Cost Analysis and Better Oversight Needed over Army Nonstandard Equipment
GAO-11-766
Published: Sep 29, 2011. Publicly Released: Sep 29, 2011.
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Highlights
As of March 2011, the Army had over $4 billion worth of nonstandard equipment in Iraq--that is equipment not included on units' standard list of authorized equipment. Concurrently, the Department of Defense (DOD) has acquired over $44 billion worth of Mine Resistant Ambush Protected vehicles (MRAP), most of which have been allocated to the Army. This equipment must be withdrawn from Iraq by December 31, 2011. GAO examined the extent to which the Army has plans and processes for the disposition of (1) nontactical nonstandard equipment; (2) tactical nonstandard equipment; and (3) MRAPs that are no longer needed in Iraq. In performing this review, GAO analyzed relevant documents, interviewed Army officials, and visited Sierra Army Depot, where most nontactical nonstandard equipment is shipped once it leaves Iraq.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Army | To facilitate the Army's ability to efficiently evaluate, integrate, and provide for the disposition of its nonstandard equipment being retrograded from Iraq, and supply DOD decision makers and Congress with accurate estimates of the future costs of these systems, the Secretary of Defense should direct the Secretary of the Army to finalize decisions about the future status of tactical nonstandard equipment, fund those items deemed as enduring capabilities in the Army base budget if applicable, and provide Congress with its plans for and estimates on future funding for or costs associated with any equipment the Army will continue to use in theater that will not become enduring capabilities. |
DOD partially concurred with this recommendation. DOD has taken actions to identify which pieces of tactical non-standard equipment it will retain for its current and future force and fund those items in its FY15-19 base budget. On May 31, 2012, the Army issued a report identifying equipment it wants to sustain in the CENTCOM Theater after its drawdown from Iraq. As of December 12, 2012, the Army identified 14 Acquisition Program Candidates or enduring capabilities through the Capabilities Development for Rapid Transition (CDRT) process. These items had performed well in theater and the Army designated them to become eligible to compete in its base budget. The Army stated that these 14 capabilities are now competing for funding in its FY 2015-2019 base budget. Furthermore, on June 27, 2013, the Vice Chief of Staff of the Army approved the Nonstandard Equipment Army Requirements Oversight Council (AROC) process, which has taken the place of the CDRT process. The intent of this process is to provide cost-informed recommendations for selected tactical non-standard equipment that are transitioning from Overseas Contingency Operations (OCO) funding to the Army's base budget. As of June 2014, the AROC has identified 57 enduring capabilities which will compete for Program Objective Memorandum (POM) funding in the Army's FY 2017 and future base budgets. Taken together, these actions address the intent of the recommendation.
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| Department of the Army | To facilitate the Army's ability to efficiently evaluate, integrate, and provide for the disposition of its nonstandard equipment being retrograded from Iraq, and supply DOD decision makers and Congress with accurate estimates of the future costs of these systems, the Secretary of Defense should direct the Secretary of the Army to designate a senior-level focal point within the Department of the Army with the appropriate authority and resources to manage the service's effort in overseeing the disposition of its tactical nonstandard equipment to include the implementation of a servicewide means to track, monitor, and manage this equipment. |
The Army did not concur with this recommendation. According to the Deputy Chief of Staff, Army G-3/5/7, the Army plans no future effort to improve the oversight of disposition actions for tactical nonstandard equipment.
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| Department of the Army | To facilitate the Army's ability to efficiently evaluate, integrate, and provide for the disposition of its nonstandard equipment being retrograded from Iraq, and supply DOD decision makers and Congress with accurate estimates of the future costs of these systems, the Secretary of Defense should direct the Secretary of the Army to undertake a thorough total life-cycle cost estimate for integrating MRAPs into its ground vehicle fleet in accordance with DOD, OMB, and GAO guidance and include costs for training, upgrades, standardization, and military construction and (1) use this estimate to assess the affordability of its current plans and make adjustments to those plans if warranted; and (2) provide the total life-cycle cost for integrating MRAPs into its ground vehicle fleet to Congress. |
DOD concurred with this recommendation. In response, DOD has taken actions to reduce the number of MRAP variants and to determine how many MRAPs it will retain for its future force. In In addition, the Army has provided initial total life-cycle cost estimates for incorporating MRAPs into its ground vehicle fleet. The management of the MRAP program has transitioned from a joint office to each of the services so that the services can develop plans for repairing, storing, and developing life cycle cost-analyses to sustain these vehicles. On March 14, 2013, the Army approved the MRAP Study III, which recommended that the Army retain 8,585 MRAPs for its future force and reduce the number of variants from nine to three. In July 2014, the Army conducted a Cost Review Board to determine affordability and approved the Army cost position of $6.4B in base year (Fiscal Year 2014) dollars. The cost included the reset, standardization, fielding, and sustainment for the eight approved configurations (8,585 vehicles) for the projected 30-year economic useful life. The Cost Review Board's Affordability Assessment acknowledged there will be resourcing challenges; but recognized the MRAP's force protection value for the future force and stated that resourcing issues will be addressed during Program Objective Memorandum process. We believe the actions taken by DOD and the Army sufficiently complies with the intent of our recommendation for us to close it as implemented.
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Budget functionsCost analysisCost-based budgetingDefense capabilitiesEquipment inventoriesEquipment managementFederal property managementLife cycle costsMilitary land vehiclesMonitoringPlanningProperty and supply managementProperty disposalAsset managementCost estimatesPolicies and procedures