oversight

Prepositioned Materiel and Equipment: DOD Would Benefit from Developing Strategic Guidance and Improving Joint Oversight

Published by the Government Accountability Office on 2012-09-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States Government Accountability Office
Washington, DC 20548




           September 20, 2012

           Congressional Committees

           Subject: Prepositioned Materiel and Equipment: DOD Would Benefit from Developing
           Strategic Guidance and Improving Joint Oversight

           The Department of Defense (DOD) positions materiel and equipment1 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. In addition, DOD uses prepositioned materiel and equipment to support a variety of
           needs including security cooperation activities, multilateral training exercises abroad,
           humanitarian assistance, and disaster relief. Fiscal challenges require DOD to carefully
           balance the investment in prepositioned materiel and equipment to achieve both national
           military objectives and other DOD priorities. Prepositioned materiel and equipment played
           an important role in operations in Iraq and Afghanistan. However, sustained operations have
           taken a toll on the condition and readiness of military materiel and equipment. DOD has
           reported to Congress that the military services are committed to reconstituting prepositioned
           materiel and equipment but must balance these efforts with the department’s other priorities,
           such as restructuring capabilities within its prepositioned materiel and equipment and
           changes in its overseas military presence. For example, DOD issued a new defense
           strategy in January 20122 that discusses the impending drawdown in Afghanistan and a
           future emphasis on the Asia Pacific region, which are likely to have implications for
           prepositioned materiel and equipment.

           Section 2229a of Title 10 of the United States Code requires DOD to report annually to the
           congressional defense committees on the status of prepositioned stocks as of the end of the
           fiscal year that precedes the fiscal year during which the report is submitted.3 Reports are to
           be submitted no later than the date of the submission of the President’s budget request for a
           given fiscal year. The reporting requirement was established by section 352 of the National
           Defense Authorization Act for Fiscal Year 2008, and was amended by section 341 of the
           National Defense Authorization Act (NDAA) for Fiscal Year 2012, which created additional
           reporting requirements. Prior to the enactment of the National Defense Authorization Act for
           2012, DOD’s reports were required to address the following six elements:



           1
            DOD uses the terms, “prepositioned materiel and equipment” and “prepositioned stocks” interchangeably in its
           report for 10 U.S.C. §2229a. Thus, at times in this report, we refer to “prepositioned materiel and equipment” as
           “prepositioned stocks.”
           2
            DOD, Sustaining U.S. Global Leadership: Priorities for 21st Century Defense, January 2012, The White House.
           (Washington, D.C.: January 3, 2012).
           3
            10 U.S.C. §2229a, as established by Pub. L. No. 110-181, §352 (2008) and amended by Pub. L. No. 112-81,
           §341 (2011).



                                                                          GAO-12-916R Prepositioned Materiel and Equipment
    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 timeline for completely reconstituting any shortfall in the prepositioned stocks.

    5. An estimate of the funding required to completely reconstitute any shortfall in the
       prepositioned stocks and a description of the Secretary’s plan for carrying out such
       complete reconstitution.

    6. A list of any operations plan affected by any shortfall in the prepositioned stocks and
       a description of the action taken to mitigate any risk that such a shortfall may create.

The National Defense Authorization Act for Fiscal Year 2012, enacted in December 2011,
added a requirement for the report to address six additional elements:

    7. A list of any non-standard items slated for inclusion in the prepositioned stocks and a
       plan for funding the inclusion and sustainment of such items.

    8. A list of any equipment used in support of Operation Iraqi Freedom, Operation New
       Dawn, or Operation Enduring Freedom slated for retrograde and subsequent
       inclusion in the prepositioned stocks.

    9. An efficiency strategy for limited shelf-life medical stock replacement.

    10. The status of efforts to develop a joint strategy, integrate service requirements, and
        eliminate redundancies.

    11. The operational planning assumptions used in the formulation of prepositioned stock
        levels and composition.

    12. A list of any strategic plans affected by changes to the levels, composition, or
        locations of the prepositioned stocks and a description of any action taken to mitigate
        any risk that such changes may create.

Section §2229a of Title 10 of the United States Code requires us to review DOD’s report
and, as appropriate, to submit to the congressional defense committees any additional
information that will further inform the committees on issues relating to the status of the




4
 A major end item is a final combination of end products that is ready for its intended use, according to the DOD
Supply Chain Materiel Management Regulation, DOD 4140.1-R, AP1.1.11.7 (May 23, 2003).



Page 2                                                         GAO-12-916R Prepositioned Materiel and Equipment
materiel in the prepositioned stocks.5 In response, we have issued several reports since
2005 addressing DOD’s reporting and management of its prepositioned materiel and
equipment. In our earlier reports we identified a number of long-standing issues and made
recommendations regarding the need for a DOD-wide strategy and enhanced joint
oversight. For example, in September 2005 and again in May 2011,6 we recommended that
DOD develop a department-wide strategy on prepositioned materiel and equipment to
integrate and synchronize at a DOD-wide level the services’ prepositioning programs for
maximizing efficiency in managing prepositioned materiel and equipment across the
department to reduce unnecessary duplication. In our May 2011 report, we also found that
DOD did not discuss all types of prepositioned materiel and equipment in its report. Also, it
did not list any operation plans affected by shortfalls in prepositioned stocks, as required.
Furthermore, DOD had limited department-wide guidance that would help ensure that its
prepositioning programs accurately reflected national military objectives, and DOD faced
organizational challenges that may hinder its efforts to gain efficiencies in managing
prepositioned materiel and equipment across the department. We have recommended,
among other things, that DOD (1) provide a more comprehensive picture of the full scope of
the services’ prepositioning programs, (2) provide a summary of plans the services have
determined include requirements for prepositioned stocks as well as a description of
shortfalls, risk mitigation measures, and an assessment of reduced risk, (3) clarify DOD’s
joint oversight structure for prepositioned stocks and leverage expertise to develop and
implement authoritative strategic guidance, linking the department’s current and future
needs for prepositioned stocks to evolving national defense initiatives. Specifically, we
recommended in May 2011 that DOD assess the continued relevance of the Global
Prepositioned Materiel Capabilities Working Group’s assigned tasks and membership as
well as the group’s charter, and make any necessary adjustments to ensure that the working
group’s objectives align with its activities.7 In addition, we included the need to strengthen
joint oversight and synchronize at a department-wide level DOD’s prepositioning efforts in
our March 2011 first annual report to Congress on potential duplication, overlap, and
fragmentation in the federal government.8 In February 2012 follow-up work on our
duplication report, we noted that DOD had taken some actions, but had not fully addressed
our recommendations.9




5
 To determine if additional information would inform decision makers, we used GAO Standards for Internal
Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
6
 GAO, Defense Logistics: Better Management and Oversight of Prepositioning Programs Needed to Reduce
Risk and Improve Future Program, GAO-05-427 (Washington, D.C.: September 6, 2005); GAO, Warfighter
Support: Improved Joint Oversight and Reporting on DOD’s Prepositioning Programs May Increase Efficiencies,
GAO-11-647 (Washington, D.C.: May 16, 2011).
7
 DOD has established a Global Prepositioned Materiel Capabilities Working Group comprised of officials from
the services, joint organizations, and entities within the Office of the Secretary of Defense. The working group
was expected to provide a DOD response on a GAO recommendation in February 2007 regarding the need for a
department-wide prepositioning strategy and provide an overall view of DOD’s prepositioning programs to ensure
that the services’ programs were synchronized.
8
 GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance
Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011).
9
 GAO, Follow-up on 2011 Report: Status of Actions Taken to Reduce Duplication, Overlap, and Fragmentation,
Save Tax Dollars, and Enhance Revenue, GAO-12-453SP (Washington, D.C.: Feb. 28, 2012).



Page 3                                                       GAO-12-916R Prepositioned Materiel and Equipment
On March 30, 2012, DOD submitted its fiscal year 2011 report on the status of its
prepositioned materiel and equipment from October 2010 through September 2011.10 For
our review of DOD’s fiscal year 2011 report, we determined (1) the extent to which DOD
addressed the 12 reporting requirements, and what additional information, if any, could
more fully inform the congressional defense committees on DOD’s prepositioned materiel
and equipment; and (2) the progress DOD has made on implementing DOD-wide strategic
guidance and joint oversight of its prepositioned materiel and equipment.

To evaluate the extent to which DOD’s annual report addressed the 12 reporting
requirements set out in 10 U.S.C. §2229a, regarding prepositioned materiel and equipment,
we analyzed DOD’s report on the status of prepositioned materiel and equipment for fiscal
year 2011. We conducted a content analysis by having two analysts independently compare
the prepositioned materiel and equipment information in DOD’s fiscal year 2011 report with
the 12 reporting requirements in 10 U.S.C. §2229a. After analyzing these data and resolving
any differences, we discussed the results of our analyses with DOD and military service
officials to determine the full scope of the services’ prepositioning programs, including an
understanding of the elements included in DOD’s annual report. We also reviewed DOD’s
current (fiscal year 2011) and prior year’s (fiscal year 2010) annual prepositioning reports to
Congress and met with service officials responsible for reporting on the prepositioning
programs to discuss the methodology used for collecting and reporting on its materiel and
equipment. To determine the extent to which DOD has made progress in developing
overarching strategic guidance and joint oversight of its prepositioning programs, we
reviewed DOD guidance, the Comprehensive Materiel Response Strategy and a draft of its
forthcoming plan, and service guidance. We conducted meetings with DOD officials in the
Office of the Secretary of Defense, the Joint Chiefs of Staff, all four of the military services,
and the Defense Logistics Agency to discuss the extent to which department-wide guidance
on prepositioned materiel and equipment has been developed and the status of joint efforts,
including those conducted by DOD’s Global Prepositioned Materiel Capabilities Working
Group. We discussed the actual activities the working group had performed with service and
joint officials, including those who had participated in this working group, so that we could
compare this information with the required responsibilities in DOD’s guidance. We did not
independently assess the data DOD provided to Congress, but we discussed with service
officials the reliability of the systems used to develop the report data. We determined that
the data were sufficiently reliable to meet the objectives of this engagement. A more detailed
discussion of our scope and methodology is included in enclosure I. We conducted this
performance audit from March 2012 through September 2012 in accordance with generally
accepted government auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on our audit
objectives.




10
 DOD, Report on Status of Department of Defense Programs for Prepositioning of Materiel and Equipment: A
Report to Congress as required by Section 352 of Public Law 110-181 (March 17, 2012).



Page 4                                                    GAO-12-916R Prepositioned Materiel and Equipment
Summary
DOD’s fiscal year 2011 report partly addressed the required reporting elements11 and
omitted some additional information that, while not required by law, would be useful for
congressional oversight and decision making. Specifically, DOD’s report addressed the first
five required elements. However, information on the sixth element was incomplete because,
while DOD highlighted concerns relative to the commands’ theater objectives and strategies
and prepositioned materiel and equipment, DOD’s report did not provide a list of operation
plans affected by a shortfall in prepositioned stocks and a description of actions taken to
mitigate risk. In addition, DOD’s report did not address the six elements added by the
National Defense Authorization Act for Fiscal Year 2012. DOD officials said that those
elements were not addressed in DOD’s fiscal year 2011 report because the report was
already drafted when the requirements were enacted last December, and they plan to
address these elements in their next annual report. DOD’s report also did not contain some
additional information on prepositioned materiel and equipment, which we recommended in
our May 2011 report because it would provide a fuller scope of DOD’s prepositioning
programs. For example, the services place fuel distribution equipment and medical materiel
and equipment and other capability sets—including water, habitability equipment such as
tents, electrical power and distribution equipment, munitions and rations, among other
items—that were not addressed in DOD’s report. Without full information on all 12 reporting
requirements and complete information on the services’ prepositioned materiel and
equipment, congressional decision makers do not have a complete picture of DOD’s
prepositioned materiel and equipment, which would enable them to provide oversight and
would inform decisions in a constrained fiscal environment.

DOD has not made progress in implementing DOD-wide strategic guidance and joint efforts
to enhance oversight of its prepositioning programs since we last reported on this issue in
2011. Our prior work emphasizes the need for strategic planning as an important element in
results-oriented management and that strategic planning can help clarify priorities and unify
an agency in pursuit of shared goals. Moreover, setting timelines for implementation can
build momentum and show progress. However, DOD has not set a timeline for developing or
implementing strategic guidance on its prepositioned programs. In fall 2011, a DOD official
stated that DOD had plans to provide such guidance that would enhance oversight, increase
program efficiencies, and expand guidance to link prepositioning programs with national
military objectives; however by spring 2012, officials said that DOD had changed its plans
due to other departmental priorities. According to a DOD official, it is now unclear when
DOD plans to issue department-wide strategic guidance on its prepositioning programs.
However, without establishing a timeline for developing and implementing such guidance,
DOD cannot be assured that its prepositioning programs accurately reflect national military
strategies or new departmental priorities, such as the strategic shift in attention to the Asia
Pacific region. In addition, DOD’s efforts to improve joint oversight of its prepositioning
programs have been limited. We have previously reported that an increased emphasis on
joint program management and oversight is needed to reduce unnecessary duplication and
achieve cost efficiencies. DOD has established a working group made up of officials
representing various services and offices within the department, which was expected to
provide joint oversight and ensure the services’ prepositioning programs, were
synchronized. However, the working group has not carried out all of its assigned



11
 10 U.S.C. §2229a.



Page 5                                              GAO-12-916R Prepositioned Materiel and Equipment
responsibilities and without strategic guidance that emphasizes the importance of joint
oversight and delineates clear lines of authority, the working group may not make changes
to the way it has been operating. As a result, DOD may not be able to fully recognize
potential efficiencies that could be gained by aligning the services’ prepositioning programs
with each other and new departmental priorities.

We recommend that DOD set a timeline for implementing department-wide strategic
guidance and ensure the guidance aligns prepositioning programs with national defense
strategies and new departmental priorities. The guidance should also emphasize joint
oversight to maximize efficiencies in prepositioned materiel and equipment across the
department. In commenting on a draft of our report, DOD concurred with our
recommendation. DOD’s comments are reprinted in enclosure II.

Background
Through their individual programs, each of the military services maintains preconfigured
groups of combat and logistics materiel and equipment on ships and ashore at locations
around the world. These preconfigured groups of materiel and equipment—or sets—are
intended to speed the response times of U.S. forces to operating locations and reduce the
strain on airlift and sealift assets. The Army stores sets of combat brigade materiel and
equipment, supporting supplies, and other materiel and equipment at land sites in several
countries and aboard ships in the Pacific and Indian oceans. The Marine Corps stores
materiel and equipment for its forces aboard ships stationed around the world and at land
sites in Norway. The Air Force stores ammunition at land sites and aboard stationary ships,
and prepositions materiel and equipment, vehicles, and supporting supplies at several land
sites. Additionally, the Navy stores materiel and equipment and supplies at similar locations
to support the offloading of ships, deployable hospitals, and construction projects.

DOD’s prepositioned materiel and equipment is intended to support national military
objectives which are described in strategic and operational documents, including the
National Defense Strategy, the National Military Strategy, and the geographic combatant
commanders’ plans. The Office of the Undersecretary of Defense for Acquisition,
Technology, and Logistics and the Joint Staff Logistics Directorate provide implementation
governance and oversight of DOD’s materiel and equipment, including prepositioned
materiel and equipment. DOD apportions prepositioned materiel and equipment among the
combatant commands according to joint strategic guidance planning. Combatant
commanders periodically review plans, assess risk, and report the results to the Chairman of
the Joint Chiefs of Staff. By providing needed prepositioned materiel and equipment, the
military services can reduce the risk associated with a plan.

DOD’s Fiscal Year 2011 Report Partially Addressed Required Elements and
Omitted Some Additional Information that Would Provide a More Complete
Picture of Its Prepositioned Materiel and Equipment
DOD’s fiscal year 2011 report on prepositioned materiel and equipment, submitted in
response to section §2229a, addressed five of the reporting requirements, partially
addressed the sixth requirement, and did not address the six additional reporting elements
recently added by the National Defense Authorization Act for Fiscal Year 2012. Also, DOD
improved some aspects of its reporting on prepositioned materiel and equipment compared
to its previous fiscal year’s report, but its fiscal year 2011 report omitted certain information



Page 6                                                GAO-12-916R Prepositioned Materiel and Equipment
which, while not required by law, would be useful to decision makers in obtaining a more
complete understanding of DOD’s prepositioning programs.

DOD’s Report Addressed Five Reporting Elements, Partially Addressed One, and
Did Not Address the Remaining Six Elements
DOD provided information on the first six reporting elements, enumerated in section §2229a,
in its fiscal year 2011 annual report on prepositioning, but the sixth element was only
partially addressed. In addition, DOD did not provide information on the remaining six
elements required by the statute. Our assessment is summarized in the following table.

Table: Summary of the DOD Fiscal Year 2011 Report’s Response to the 12 Reporting Elements set out in
10 U.S.C. §2229a

                                                                                               Our assessment of
 Reporting elements                                                                            DOD’s report
 (1) The level of fill for major end items of equipment and spare parts in each                Addressed
 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        Addressed
 fiscal year, grouped by category or major end item.
 (3) A list of major end items of equipment drawn from prepositioned stocks during such        Addressed
 fiscal year and a description of how that equipment was used and whether it was
 returned to the stocks after being used.
 (4) A time line for completely reconstituting any shortfall in the prepositioned stocks.      Addressed
 (5) An estimate of the amount of funds required to completely reconstitute any shortfall      Addressed
 in the prepositioned stocks and a description of the Secretary’s plan for carrying out
 such complete reconstitution.
 (6) A list of any operations plan affected by any shortfall in the prepositioned stocks and   Partially addressed
 a description of any action taken to mitigate any risk that such a shortfall may create.
 (7) A list of any non-standard items slated for inclusion in the prepositioned stocks and a Not addressed
 plan for funding the inclusion and sustainment of such items.
 (8) A list of any equipment used in support of Operation Iraqi Freedom, Operation New Not addressed
 Dawn, or Operation Enduring Freedom slated for retrograde and subsequent inclusion in
 the prepositioned materiel and equipment.
 (9) An efficiency strategy for limited shelf-life medical stock replacement.                  Not addressed
 (10) The status of efforts to develop a joint strategy, integrate service requirements, and   Not addressed
 eliminate redundancies.
 (11) The operational planning assumptions used in the formulation of prepositioned            Not addressed
 stock levels and composition.
 (12) A list of any strategic plans affected by changes to the levels, composition, or         Not addressed
 locations of the prepositioned stocks and a description of any action taken to mitigate
 any risk that such changes may create.
Source: GAO analysis.



We assessed five of the elements as being addressed because the information provided in
the report was responsive to the reporting requirements set out in section §2229a. We
assessed the sixth element as being partially addressed because the report did not provide
all the required information. Element six requires DOD to list any operation plan affected by
a shortfall in prepositioned stocks and a description of the action taken to mitigate any risk
such a shortfall may create. In the report, DOD stated that it did not directly relate
prepositioning shortfalls to any operation plan execution risk. Instead, the report highlighted
capability gaps relative to the combatant commands’ theater objectives and strategies. For
example, it identified needed investments in overseas infrastructure and prepositioned


Page 7                                                           GAO-12-916R Prepositioned Materiel and Equipment
support capabilities to meet future challenges and a variety of operational demands.
However, without the information required in element six, Congress may lack information
about risk as it applies specifically to operation plans affected by shortfalls in prepositioned
stocks and the extent to which DOD has mitigation measures to reduce these risks. We
recommended in our May 2011 report that DOD’s report provide this information, together
with readiness information DOD already collects and reports, which would enable DOD to
provide Congress with fuller information about how prepositioning materiel and equipment
shortfalls specifically affect the operational readiness of the force. DOD concurred with our
recommendation and said it would include relevant information pertaining to prepositioned
materiel and equipment that does not conflict with other risk or assessment reporting
mechanisms. However, in its comments, DOD stated that the department already provides a
comprehensive and more holistic approach to risk and mitigation strategies each year and
that reporting additional risks and mitigation strategies for specific execution of concept
plans using only prepositioning program shortfalls could result in sub-optimized decision
making. We continue to believe that without clearly articulating the extent to which shortfalls
in prepositioned stocks, relative to other factors, contribute to the risks, Congress may be
less able to determine the extent to which funding directed towards reconstituting DOD’s
prepositioned stocks will reduce risk relative to funding directed towards other programs.

DOD’s fiscal year 2011 report also did not address the six new reporting elements added by
the National Defense Authorization Act for Fiscal Year 2012, but DOD plans to address
them in the next annual report for fiscal year 2012. According to DOD officials, they did not
address the added six elements because they did not have sufficient time to compile the
additional information for the fiscal year 2011 report—explaining that at the time the
requirement for the six additional elements was enacted in December 2011, DOD’s fiscal
year 2011 report had already been drafted. Joint Staff officials said they will need to provide
considerable lead time for the services to assemble the information needed to respond to
the new elements.

DOD’s Fiscal Year 2011 Report Improved Reporting of Some Information but
Omitted Other Useful Data on Prepositioned Programs
DOD has improved the reporting of some information, but its fiscal year 2011 report did not
include other information on prepositioned materiel and equipment which, while not required
by law, would provide decision makers with a more complete picture of DOD’s
prepositioning programs. DOD made some positive changes in its reporting on
prepositioned materiel and equipment since its fiscal year 2010 report. In September 2011,12
we reported that DOD’s annual report would provide Congress with the visibility to better
assess the status and condition of prepositioned materiel and equipment if information was
provided on (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




12
 GAO-11-852R.



Page 8                                               GAO-12-916R Prepositioned Materiel and Equipment
rates.13 DOD concurred with our recommendations and included this information in its fiscal
year 2011 report, resulting in a more informative report for Congress.

However, DOD’s fiscal year 2011 report did not include information on the full range of
DOD’s prepositioning programs, which would provide Congress more comprehensive
information when weighing the scope of options available to meet national military objectives
within these programs. This could be especially helpful in finding potential efficiencies to be
gained in today’s increasingly fiscally constrained environment. Accordingly, we have
recommended in the past that DOD provide a fuller scope of the services’ prepositioning
programs, to include (1) a representative summary description including the dollar value
and, as appropriate, level of fill and information on serviceability, of (a) Army operational
projects14 and Army war reserve sustainment stocks,15 (b) Air Force munitions, medical
stocks, rations, and fuel elements of its War Reserve Materiel program, and (c) Marine
Corps materiel prepositioned to support an entire deployed Marine Corps force, such as its
capability sets; and (2) all sources of funding for the services prepositioned materiel and
equipment, including working capital funds. DOD concurred with our recommendation and
stated it would determine elements in the services’ programs that are appropriate to include
in future reports, but generally did not include this information in its fiscal year 2011 report.

Specifically, in DOD’s fiscal year 2011 report, we determined that the following information
was not included:

    Army: DOD’s report included Army operational projects and war reserve sustainment
     stocks stored at land sites and aboard prepositioning ships that were not in the fiscal
     year 2010 report. However, the fiscal year 2011 report did not include other Army-owned
     items that are managed by the Defense Logistics Agency, such as rations. Army officials
     said that it is not their responsibility to report this information because they do not
     manage it, while Defense Logistics Agency officials told us that the Army should report it
     because they own the items. Including this information in DOD’s report would result in
     more complete information for decision makers on the Army’s prepositioning program.

    Air Force: DOD’s report did not include Air Force munitions, auxiliary fuel tanks, missile
     launchers, pylons, ejector racks, and adapters, medical stocks, fuel, and Defense
     Logistics Agency-managed items such as rations. DOD’s fiscal year 2010 report
     provided a more complete picture of the Air Force prepositioned materiel and equipment
     in accordance with what we had recommended, in that it included munitions, rations, and
     fuel in that report. Air Force officials told us that similar data were submitted for inclusion



13
  The objective level of fill denotes the desired quantity of an item the service determines is necessary in its
current prepositioning program, the level of fill shows the percent relationship of on-hand to objective quantities,
and serviceability rates show the percentage of end items that are mission capable among those that are on-
hand in prepositioned materiel and equipment.
14
  Army operational projects stock is authorized material above unit authorizations designed to support Army
operations or contingencies stocks stored at land sites and aboard prepositioning ships. It includes equipment
and supplies for special operations forces, bare base sets, petroleum and water distribution, mortuary
operations, and prisoner-of-war operations.
15
  War reserve sustainment stock is replacement equipment for losses in early stages of operations or until
resupply is established and is stored at land sites and aboard prepositioning ships. It includes major end items
such as tracked vehicles, and secondary items such as meals, clothing, petroleum supplies, construction
materials, ammunition, medical materials, and repair parts.



Page 9                                                          GAO-12-916R Prepositioned Materiel and Equipment
       in the fiscal year 2011 report. However, the information was omitted from DOD’s final
       report to Congress for reasons that officials could not recall.

      Marine Corps: The Marine Corps prepositions fuel distribution equipment and medical
       stocks to support an entire deploying brigade or force, and other capability sets including
       water, habitability equipment such as tents, electrical power and distribution equipment,
       and rations. However, these items were not included in DOD’s report

      Navy: DOD’s report did not include details about the Navy’s prepositioned materiel and
       equipment. For example, it did not include equipment categories, consisting of rolling
       stock such as vehicles and generators and non-rolling stock, such as tents and
       communications gear.

Continued Lack of Overarching Strategic Guidance and Limited Joint Service
Efforts Hinder Oversight, and Could Result in Overlap, Duplication, and
Inefficiencies among the Services’ Prepositioning Programs
DOD has not made progress in implementing overarching DOD-wide strategic guidance and
joint efforts to enhance oversight of its prepositioned programs since we last reported on
these issues in 2011. In the absence of clearly stated departmental needs and priorities for
prepositioned materiel and equipment, the services may not be able to shape their
prepositioning programs to most effectively and efficiently meet changing departmental
priorities. Furthermore, without department-wide guidance and joint oversight, DOD may not
be able to fully recognize potential efficiencies that could be gained by synchronizing the
services’ prepositioning programs with each other and with the new defense strategy that
includes reducing troops in Afghanistan and shifting focus to the Asia Pacific region.

DOD Lacks Overarching Strategic Guidance for Its Prepositioned Programs
DOD had planned to develop department-wide strategic guidance for its prepositioning
programs, but these efforts have not materialized because of other departmental priorities.
Our prior work emphasizes that strategic planning is an important element in results-oriented
management and that it can help clarify priorities and unify an agency in pursuit of shared
goals.16 Moreover, setting timelines for implementation can build momentum and show
progress.17 In June 2008, DOD issued an instruction directing the Undersecretary of
Defense for Policy to develop and coordinate Guidance for Development of the Force for
approval by the Secretary of Defense that identifies an overall prepositioned materiel and
equipment strategy to achieve desired capabilities and responsiveness in support of the
National Defense Strategy.18 DOD’s guidance for prepositioning materiel and equipment
would provide the services with information on the medium- and long-term department-wide
priorities they need to effectively determine the resources needed to meet future
contingencies, thus linking DOD’s prepositioning programs with the overall national defense
strategies.



16
 GAO, Agencies’ Strategic Plans under the Government Performance and Results Act: Key Questions to
Facilitate Congressional Review, GAO/GGD-10.1.16 (Washington, D.C.: May 1997).
17
 GAO, Results-Oriented Cultures: Implementation Steps to Assist Mergers and Organizational Transformations,
GAO-03-669 (Washington, D.C.: July 2, 2003).
18
     Department of Defense Instruction 3110.06, War Reserve Materiel (WRM) Policy (June 23, 2008).



Page 10                                                       GAO-12-916R Prepositioned Materiel and Equipment
We reported in May 2011 that DOD had limited department-wide guidance that would help
ensure that its prepositioning programs accurately reflect national military objectives such as
those included in the National Defense Strategy and the National Military Strategy.19 We
noted that DOD had developed department-wide guidance at the time, referred to as
Guidance for Development of the Force, but that it did not contain any information related to
prepositioned materiel and equipment even though DOD’s 2008 instruction on prepositioned
materiel and equipment specifically directed the development of such guidance. We
recommended that DOD develop appropriately detailed authoritative strategic guidance, and
that the guidance include planning and resource priorities linking the department’s current
and future needs for prepositioned materiel and equipment to evolving national defense
objectives. In response, DOD stated that it would develop strategic direction concerning
prepositioned materiel and equipment. In the fall of 2011, a DOD official stated that an
ongoing department-wide review—which would result in the Comprehensive Materiel
Response Plan—would enhance joint oversight, increase program efficiencies, expand
guidance to link prepositioning programs with national military objectives, and might lead to
revisions in the department’s prepositioning strategy.

However, DOD’s Comprehensive Materiel Response Strategy, issued in May 2012, and its
forthcoming plan, scheduled for issuance in September 2012, do not provide guidance for its
prepositioning programs. DOD officials said that is because, in spring 2012, they received
new direction for this effort, and the strategy and forthcoming plan now focus on integrating
and synchronizing materiel response to support the full range of military activities, which is
much broader than prepositioned materiel and equipment. According to DOD officials, the
Comprehensive Materiel Response Plan is currently in draft, involves three overlapping
phases, and is not scheduled to be fully implemented until fiscal year 2020. An official
further stated that it is unclear when DOD plans to issue department-wide strategic guidance
on its prepositioning programs. Moreover, with this shift in focus, DOD does not currently
have a set timeline for developing and implementing strategic guidance that focuses
specifically on prepositioned materiel and equipment.

While no department-wide strategy exists that specifically addresses prepositioned materiel
and equipment, some services have developed strategies to guide their efforts. For
example, the Army and the Marine Corps have developed individual strategies for their
prepositioning of materiel and equipment, which officials said were coordinated within DOD
before issuance. However, without overarching department-wide guidance, there is no
assurance that these strategies are linked to the department’s objectives or to each other.
As far back as 2005, we reported that each of the military services and the Defense
Logistics Agency were planning the future of their prepositioning programs without the
benefit of an overall plan or joint doctrine to coordinate their efforts. Thus, it was unclear to
us how the programs would fit together to meet the evolving defense strategy. DOD officials
representing the Joint Staff and the services agreed with our assessment and shared our
concerns. Seven years later, little progress has been made. Individual prepositioning
programs not linked to overarching strategic guidance could lead to inconsistencies and
overlap and duplication between the services’ prepositioning strategies and the new defense
strategy within the department. Without a set timeline for the development and
implementation of department-wide strategic guidance that aligns DOD’s prepositioning
programs with national defense strategies and new departmental priorities, DOD could face



19
 GAO-11-647.



Page 11                                              GAO-12-916R Prepositioned Materiel and Equipment
difficulties in effectively planning and implementing its prepositioning programs and risks the
potential for duplicative or unaligned efforts among the services.

DOD Has Made Limited Efforts to Enhance Joint Oversight of Its Prepositioning
Programs
DOD’s efforts to improve joint oversight of its prepositioning programs have been limited in
part because the Global Prepositioned Materiel Capabilities Working Group was expected to
provide joint oversight but has not been functioning as intended. We have previously
reported that an increased emphasis on joint program management and oversight of
prepositioned materiel and equipment is needed to reduce unnecessary duplication and
achieve cost savings and efficiencies. Although DOD has developed and initiated some joint
efforts, many of these initiatives do not specifically address prepositioning materiel and
equipment, but rather focus broadly on supporting the full range of military activities.

DOD Instruction 3110.06, War Reserve Materiel (WRM) Policy, directed the establishment
of the Global Prepositioned Materiel Capabilities Working Group comprised of officials from
the services, joint organizations, and entities within the Office of the Secretary of Defense.20
In particular, according to DOD officials involved with the group since its inception, the intent
of the working group was to provide an overall view of DOD’s prepositioning programs and
ensure that the services’ programs were synchronized. Based on its charter, the working
group’s joint prepositioning activities include, among other things, providing oversight of
DOD’s prepositioning program, addressing joint issues concerning requirements and
positioning of prepositioned materiel and equipment, and making recommendations that
balance limited resources against operational risk for use during budget and program
reviews. However, the group has not carried out all of the responsibilities specified in the
instruction or in its own charter related to prepositioned materiel and equipment. Rather,
officials said that the main responsibility of the working group has been to consolidate the
services’ individual submissions on their prepositioning programs into DOD’s annual report
for Congress. According to DOD officials, the working group has met only sporadically and
has not yet addressed many of the duties specified in its charter. Without strategic guidance
that emphasizes the importance of joint oversight of prepositioned materiel and equipment,
the working group may continue to operate as it has been with little change to enhance
jointness across the services.

We identified the need to strengthen joint oversight and synchronize prepositioning
programs at a department-wide level in our first annual report to Congress on potential
duplication, overlap, and fragmentation in the federal government.21 Although DOD has
developed some joint activities, many of these efforts are either in very early stages or do
not specifically address prepositioned materiel and equipment but focus instead on more
broadly supporting the full range of military activities. For example, DOD has an initiative
entitled the Global Campaign Plan for Distribution that focuses on the global distribution of
DOD assets, and its forthcoming Comprehensive Materiel Response Plan calls for the
integration and synchronization of DOD assets across the services. However, neither of
these plans contains details on where to position or how to manage prepositioned materiel
and equipment.



20
     Department of Defense Instruction 3110.06, War Reserve Materiel (WRM) Policy (June 23, 2008).
21
 GAO-11-318SP.



Page 12                                                       GAO-12-916R Prepositioned Materiel and Equipment
Our May 2011 report noted that DOD and service officials believed that better
synchronization and integration among the services’ prepositioning programs and other
components within DOD may result in efficiencies or cost savings. We stated, in particular,
that efficiencies or cost savings may be gained by an increased emphasis on joint program
management, as appropriate, and by leveraging components in DOD, such as the Defense
Logistics Agency. In March 2011, the Office of Secretary of Defense’s Cost Assessment and
Program Evaluation office briefed senior DOD officials on a study that resulted in
reassessing DOD’s prepositioned materiel and equipment. This Global Prepositioned
Materiel Capabilities Study reviewed prepositioned materiel and equipment capabilities and
usage in selected operations during a 20-year period. According to officials who worked on
the study, the study assessed the services’ prepositioning programs from DOD-wide and
joint service perspectives and raised issues about prepositioned capability requirements.
The study supported changes that DOD subsequently made in Army and Marine Corps
prepositioned materiel and equipment sets. However, according to DOD officials, the study
was conducted on a one-time basis and DOD does not have any plans to assess
prepositioned materiel and equipment on a routine or scheduled basis. Without sustained
joint oversight and an emphasis on prepositioning programs, DOD may not be able to fully
recognize potential efficiencies that could be gained by synchronizing the services’
prepositioning programs with each other and overarching departmental objectives and
priorities.

Conclusions
DOD’s prepositioned materiel and equipment have been critical to forces in support of
recent operations. As DOD plans to reduce troops in Afghanistan and shift its strategic
emphasis to the Asia Pacific region, prepositioned materiel and equipment will likely
continue to play a vital role in shaping U.S. defense strategy and achieving success in future
operations. DOD’s fiscal year 2011 report to Congress on its prepositioned materiel and
equipment made some notable improvements compared with the department’s previous
reports. By including information on comparisons of all major end items or spare parts,
objective levels, percentage levels of fill, and serviceability rates for the current and previous
fiscal year, as well as explanations of significant changes from the previous year, decision
makers now have a better understanding of changes in the department’s prepositioned
materiel and equipment from year to year. However, until DOD fully addresses all 12
reporting elements, including the sixth element of section §2229a, and includes more
complete information on the services’ prepositioned programs, the report may continue to
hinder a complete understanding of DOD’s prepositioned materiel and equipment.
Furthermore, because DOD did not address recently enacted reporting elements 7 through
12 of §2229a, Congress does not have the benefit of considering information related to
those elements while making decisions that weigh competing departmental priorities.
Because we have previously recommended that DOD fully address reporting element six,
we are not making the same recommendation in this correspondence. However, we
continue to believe that providing a list of operation plans affected by a shortfall and the
action taken to mitigate any risks created by that shortfall would result in a more complete
picture of DOD’s prepositioned materiel and equipment.




Page 13                                               GAO-12-916R Prepositioned Materiel and Equipment
Changing national and defense strategies and the ongoing evolution in the types of
contingencies that may require DOD involvement create challenges for the department in
determining future demand for prepositioned materiel and equipment. These challenges
underscore the importance and urgency of developing department-wide strategic guidance
that clearly articulates departmental needs and priorities for prepositioned materiel and
equipment and aids the services in shaping their programs to most effectively and efficiently
meet those needs and priorities. Since 2005, we have identified the need to establish an
overarching strategy for the services’ prepositioning programs and while DOD has
concurred with our recommendation in this area, its planned efforts have not materialized,
and it has not provided department-wide direction for managing prepositioned materiel and
equipment. Furthermore, as DOD—and the nation—face fiscal constraints in the coming
years, setting a timeline for developing overarching strategic guidance that emphasizes joint
oversight of DOD’s prepositioning programs is essential to reduce any unnecessary overlap,
duplication, and inefficiencies among the services and to maximize cost savings while
minimizing risks.

Recommendation for Executive Action
To more effectively plan and implement its prepositioned materiel and equipment programs,
improve oversight, and reduce potential for duplicative efforts, the Secretary of Defense
should direct the Undersecretary of Defense for Acquisition, Technology, and Logistics, in
coordination with the Chairman of the Joint Chiefs of Staff, to set a timeline for implementing
our prior recommendation to develop overarching strategic guidance on DOD’s
prepositioning programs. The strategic guidance should ensure that DOD’s prepositioning
programs align with national defense strategies and new departmental priorities. It also
should emphasize joint oversight to maximize efficiencies in prepositioned materiel and
equipment across the department.

Agency Comments and Our Evaluation
We provided a draft of this report to DOD for comment. In written comments, DOD
concurred with our recommendation. DOD’s comments are reprinted in their entirety in
enclosure II.

DOD concurred with our recommendation that the Secretary of Defense direct the
Undersecretary of Defense for Acquisition, Technology, and Logistics, in coordination with
the Chairman of the Joint Chiefs of Staff, to set a timeline for implementing our prior
recommendation to develop overarching strategic guidance on DOD’s prepositioning
programs. DOD said it is in the process of developing its Comprehensive Materiel Response
Plan with the intent of combining supply chain activities associated with the most often used,
common items required by the warfighter to support the range of military activities. DOD also
said its intent is to improve accessibility to its prepositioned capability sets by expanding its
application beyond combat operations to include security, engagement, and relief and
reconstruction activities. According to DOD, the Comprehensive Materiel Response Plan,
once published, will reach full operational capability by 2020.

DOD comments indicate that it intends to move forward with its broader approach to
integrate and synchronize materiel response to support the full range of military activities—a
plan that would take another 8 years to fully implement—but do not address the need to
provide overarching guidance specifically on its prepositioned programs and thus do not



Page 14                                              GAO-12-916R Prepositioned Materiel and Equipment
establish a timeline for doing so. As we discuss in our report, the Comprehensive Materiel
Response Strategy, issued in May 2012, and its forthcoming plan are focused broadly on
integrating and synchronizing materiel response to support the full range of military activities
and do not provide guidance for prepositioned programs. While we recognize the
importance of broad strategic planning, developing and implementing overarching guidance
specifically on prepositioned programs would help set priorities and make it clear that DOD’s
prepositioned programs accurately reflect national military strategies or new departmental
priorities, such as the strategic shift in attention to the Asia Pacific region. In addition, DOD
commented that in the interim, it will continue to focus on ensuring that combatant
commander equipment requirements identified in operational and contingency plans are
satisfied by the services and aggressively explore improvements to the current
prepositioned equipment strategy including pursuing opportunities for increased jointness
across service programs. However, we are concerned that DOD did not identify any specific
actions that it plans to undertake to improve joint oversight or reduce potential inefficiencies
among the services’ prepositioning programs. We have identified the need to establish an
overarching strategy for prepositioning programs since 2005, and we continue to emphasize
the need for setting a timeline for developing and implementing such guidance, with
particular emphasis on joint oversight to reduce unnecessary duplication and overlap among
the services and to maximize cost savings while minimizing risks. Furthermore, with DOD’s
impending drawdown from Afghanistan and new emphasis on the Asia Pacific region, it is
imperative that DOD make establishing strategic guidance on its prepositioned programs a
priority to help ensure that it can effectively and most efficiently respond to future threats.


We are sending copies of this report to the appropriate congressional committees; the
Secretary of Defense; the Undersecretary of Defense for Acquisition, Technology, and
Logistics; the Chairman of the Joint Chiefs of Staff; the Secretaries of the
Army, the Navy, and the Air Force; and the Commandant of the Marine Corps. In addition,
this report will be available at no charge on GAO’s website at http://www.gao.gov. If you or
your staff members have any questions regarding this report, please contact me at
(202) 512-5431 or russellc@gao.gov. Contact points for our Office of Congressional
Relations and Public Affairs may be found on the last page of this report. GAO staff
members that made major contributions to this report are listed in enclosure III.




Cary Russell
Acting Director
Defense Capabilities and Management Team

Enclosures - 3




Page 15                                              GAO-12-916R Prepositioned Materiel and Equipment
List of Committees

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

The Honorable Daniel Inouye
Chairman
The Honorable Thad Cochran
Ranking Member
Subcommittee on Defense
Committee on Appropriations
United States Senate

The Honorable Howard P. McKeon
Chairman
The Honorable Adam Smith
Ranking Member
Committee on Armed Services
House of Representatives

The Honorable C.W. Bill Young
Chairman
The Honorable Norman D. Dicks
Ranking Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives




Page 16                          GAO-12-916R Prepositioned Materiel and Equipment
Enclosure I: Scope and Methodology
To evaluate the extent to which DOD’s annual report addressed the 12 reporting
requirements set out in 10 U.S.C. §2229a, regarding prepositioned materiel and equipment,
we analyzed DOD’s report on the status of prepositioned materiel and equipment for fiscal
year 2011. We performed a content analysis by having two analysts independently compare
the prepositioned materiel and equipment information in DOD’s fiscal year 2011 report with
the 12 reporting requirements in 10 U.S.C. §2229a. Each analyst independently coded each
response into one of the categories for reporting requirements and any discrepancies in the
coding of the responses were discussed and resolved by the analysts. After analyzing these
data, we discussed the results of our analyses with DOD and military service officials to
determine the full scope of the services’ prepositioning programs, including an
understanding of the elements included in DOD’s annual report. We reviewed DOD’s current
(fiscal year 2011) and prior year’s (fiscal year 2010) annual reports to Congress on
prepositioned materiel and equipment and met with DOD officials to understand the
methodology used to collect and report on the status of prepositioned materiel and
equipment. We reviewed DOD policies and service guidance that guide the prepositioned
materiel and equipment programs to understand the variations of information reported by
the services on the status of prepositioned materiel and equipment. We met with DOD and
service officials to discuss the methodology used to collect and report the status of materiel
and the reliability of data from their reporting systems. We did not independently assess the
data DOD provided to Congress, but we discussed with these officials the reliability of the
systems used to develop the data and determined that the data were sufficiently reliable to
meet the objectives of this engagement. Further, to determine whether additional
information on the status of prepositioned materiel and equipment could be useful to
Congress, we reviewed our prior reports and relevant DOD and service guidance. In
addition, we discussed information that was omitted from DOD’s current report with DOD
and service officials including those at the Office of the Undersecretary of Defense for
Acquisition, Technology, and Logistics; Deputy Assistant Secretary of Defense for Supply
Chain Integration; U.S. Joint Staff, U.S. Army, Headquarters, Operations and Logistics
Readiness Directorate; U.S. Air Force, Headquarters, Logistics, Expeditionary Equipment
Division; U.S. Navy, Chief of Naval Operations, Medical Readiness Platforms; and the
Marine Corps Prepositioned Programs Office.

To determine the extent to which DOD has made progress in developing overarching
strategic guidance and joint oversight of its prepositioning programs, we reviewed prior GAO
reports, DOD guidance, the Comprehensive Materiel Response Strategy and a draft of its
forthcoming plan, and service guidance. We discussed the extent to which department-wide
guidance specific to prepositioned materiel and equipment and joint oversight has been
developed with officials from the Office of the Secretary of Defense, the Joint Chiefs of Staff,
all four of the military services, and the Defense Logistics Agency. We reviewed prior GAO
reports and supporting evidence to understand the history of DOD’s efforts to oversee its
prepositioning programs at a joint level. We also examined DOD guidance on the Global
Prepositioned Materiel Capabilities Working Group’s responsibilities, including the DOD
Instruction 3110.06, War Reserve Materiel (WRM) Policy (2008), and the working group’s
charter. Further, we discussed the actual activities the working group had performed with
service and joint officials, including those who had participated in this working group, so that
we could compare this information with the required responsibilities in DOD’s guidance.




Page 17                                              GAO-12-916R Prepositioned Materiel and Equipment
We conducted this performance audit from March 2012 through September 2012 in
accordance with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.




Page 18                                           GAO-12-916R Prepositioned Materiel and Equipment
Enclosure II: Comments from the Department of Defense




Page 19                                 GAO-12-916R Prepositioned Materiel and Equipment
Page 20   GAO-12-916R Prepositioned Materiel and Equipment
Enclosure III: GAO Contact and Staff Acknowledgments
GAO Contact: Cary B. Russell, (202) 512-5431 or russellc@gao.gov

In addition to the contact named above, individuals who made key contributions to this
report include: Alissa H. Czyz, Assistant Director; Tracy W. Burney; Grace A. Coleman;
Lionel C. Cooper; K. Nicole Willems; and Michael D. Silver.




Page 21                                           GAO-12-916R Prepositioned Materiel and Equipment
Related GAO Products
Defense Logistics: Department of Defense Has Enhanced Prepositioned Stock
Management but Should Provide More Detailed Status Reports, GAO-11-852R
(Washington, D.C.: September 30, 2011).

Warfighter Support: Improved Joint Oversight and Reporting on DOD’s Prepositioning
Programs May Increase Efficiencies. GAO-11-647. (Washington, D.C.: May 16, 2011).

Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars,
and Enhance Revenue. GAO-11-318SP. (Washington, D.C.: March 1, 2011).

Defense Logistics: Department of Defense’s Annual Report on the Status of Prepositioned
Materiel and Equipment Can Be Further Enhanced to Better Inform Congress.
GAO-10-172R. (Washington, D.C.: November 4, 2009).

Defense Logistics: Department of Defense’s Annual Report on the Status of Prepositioned
Materiel and Equipment Can Be Enhanced to Better Inform Congress. GAO-09-147R.
(Washington, D.C.: December 15, 2008).

Defense Logistics: Improved Oversight and Increased Coordination Needed to Ensure
Viability of the Army’s Prepositioning Strategy. GAO-07-144. (Washington, D.C.: February
15, 2007).

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




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Page 22                                           GAO-12-916R Prepositioned Materiel and Equipment
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