Defense Logistics: Department of Defense Has Enhanced Prepositioned Stock Management but Should Provide More Detailed Status Reports

The Department of Defense (DOD) positions equipment and supplies at strategic locations around the world to enable it to field combat-ready forces in days rather than the weeks it would take if equipment had to be moved from the United States to the location of a military conflict. However, sustained operations have taken a toll on the condition and readiness of military equipment. Over the last few years, we have identified a number of ongoing and long-term challenges regarding DOD's prepositioned stocks. The services have estimated the cost and time frame to replenish their stocks in DOD's annual report to Congress, and they review their prepositioning programs to address new requirements to meet future needs. DOD has reported to Congress that the services are committed to reconstituting prepositioned materiel but must balance these efforts with the department's other priorities, such as restructuring capabilities within its prepositioned stocks and changes in its overseas military presence. In 2011, we reported that DOD has limited departmentwide guidance that would help ensure that its prepositioning programs accurately reflect national military objectives and recommended that DOD develop overarching guidance related to prepositioned stocks.2 DOD currently is developing a plan examining its prepositioning programs called the Comprehensive Materiel Response Plan. This effort is examining how to effectively and efficiently preposition stocks to enhance preparedness for a range of activities--such as major combat operations, security assistance, and humanitarian relief. DOD officials expect this review to be completed in the fall of 2011 and to provide additional guidance on its prepositioning programs. The National Defense Authorization Act for Fiscal Year 2008 amended Title 10 of the United States Code to require DOD to submit annual reports to the congressional defense committees on the status of prepositioned materiel and equipment at the end of each fiscal year. DOD's reports are required to address the following six elements: 1. the level of fill for major end items4 of equipment and spare parts in each prepositioned set at the end of the fiscal year covered by the report; 2. the material condition of equipment in the prepositioned stocks at the end of such fiscal year, grouped by category or major end item; 3. a list of major end items of equipment drawn from prepositioned stocks that fiscal year and a description of how the equipment was used and whether it was returned to the stocks after its use; 4. a time line for completely reconstituting any shortfall in the prepositioned stocks; 5. an estimate of the funding required to completely reconstitute any shortfall in the prepositioned stocks and a description of the Secretary's plan for carrying out the reconstitution; and 6. a list of any operation plans affected by a shortfall in the prepositioned stocks and a description of the action taken to mitigate any risk created by that shortfall. In March 2011, DOD issued its fiscal year 2010 report on the status of its prepositioned materiel and equipment from October 2009 to September 2010.5 DOD's report includes an unclassified section to address reporting elements one through five and a classified annex to address reporting element six. The law also includes a reporting requirement that directs us to review the DOD report and submit to the congressional defense committees any additional information that will further inform the committees on the status of the materiel in prepositioned stocks. For this report, our objectives were to assess the extent to which DOD has (1) addressed the six reporting requirements in the fiscal year 2010 report to Congress on its prepositioned stocks, and whether additional information would be useful; and (2) implemented recommendations that we have made since 2005 regarding prepositioning efforts.

DOD's report addressed the six required reporting elements, but decision makers would benefit from additional information in future reports to Congress. The report provides the required information from the current fiscal year, but it does not include sufficient information for decision makers to identify changes in the program from year to year. During our review of the DOD report, we identified information such as the number of items on hand in the prior year and significant changes to the required items, that, in accordance with federal internal control standards, could further inform decision makers if included in next year's report. Without this information, decision makers may be unaware of developing trends and risks needed to make funding decisions, efficiently mitigate risk, and effectively manage the program. To provide Congress with the visibility to better assess the condition of DOD's prepositioned materiel and equipment, we are making two recommendations to enhance the information that DOD provides in its future reports. Decision makers would benefit from information on the addition of new items or spare parts to the prepositioned stocks, the authorized levels, percentage levels of fill, and serviceability rates from the prior year to use as a basis for comparison. Of the 17 recommendations that we have made to improve DOD prepositioning programs and reporting since 2005, DOD has implemented 9, has actions in progress to implement 5, and has not implemented 3 recommendations. In May 2011, we made 5 recommendations to improve strategic guidance, joint oversight, and reporting on DOD's prepositioning programs. DOD concurred with these recommendations and has taken steps to begin implementation. However, until DOD completes these actions, the department may continue to face challenges in ensuring that these programs accurately reflect national military objectives, and in identifying potential efficiencies across its prepositioning programs. For the remaining open recommendations, DOD officials stated that the department is considering actions to implement 2 of the recommendations related to the Army synchronizing its prepositioning strategy with a DOD-wide prepositioning strategy. However, until DOD finalizes its strategy, the department may not be able to ensure that future investments made for the Army's prepositioning program align with departmentwide prepositioning strategy. The remaining open recommendation concerns the inclusion of information on the services' progress in replenishing their individual prepositioned sets in DOD's annual prepositioning report. This recommendation remains open because DOD did not include progress information for each of the services as recommended. Until DOD includes this information for each service in its annual report, the report may not provide decision makers with complete information on DOD's prepositioned materiel and equipment. We continue to believe that implementing these eight open recommendations will strengthen DOD's prepositioning program, improve congressional visibility over departmentwide prepositioning efforts, and facilitate decision making about future program funding. To provide Congress with the visibility to better assess the status and condition of DOD's prepositioned materiel and equipment, we recommend that the Secretary of Defense direct the Joint Staff and the Secretaries of the military services to take two actions to provide in the next annual report, in addition to the six elements currently required, the following information: (1) comparisons of all major end items or spare parts, the objective levels, percentage levels of fill, and serviceability rates for the current and previous fiscal year; and (2) an explanation of significant changes from the previous report such as the reasons for the addition of new items or changes to the objective level, level of fill, or serviceability rates.