oversight

Military Airlift: Peacetime Use of War Reserve Spares Reduces Wartime Capabilities

Published by the Government Accountability Office on 1990-06-25.

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

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              1!390
,I   111lt”




                      MILITARY AIRLIFT
                      Peacetime Use of War
                      Reserve Spares
                      Reduces Wartime
                      Capabilities


                                     141655
National Security and
International Affaira Division

B-236066
June 26,199O

The Honorable Richard B. Cheney
The Secretary of Defense
Dear Mr. Secretary:
This report addressesthe use of war reserve spares to support the peacetime operations of
the C-6 and C-141 long-range airlift aircraft. We conclude that the peacetime use of war
reserve spare parts could significantly reduce the Department of Defense’sability to move
and sustain its forces during the first 30 days of a conflict. We also identify shortcomings in
the reporting of the status of war reserve spares to the Joint Chiefs of Staff. In addition, we
raise the issue of whether recent changesin Eastern Europe will result in reduced tensions
and an increase in warning times, which, in turn, should reduce requirements for war reserve
spares.

This report contains a recommendation to you. As you know, 31 USC. 720 requires the head
of a federal agency to submit a written statement on actions taken on our recommendations
to the SenateCommittee on Governmental Affairs and the House Committee on Government
Operations not later than 60 days after the date of this report and to the House and Senate
Committees on Appropriations with the agency’s first request for appropriations made more
than 60 days after the date of this report.

We are sending this report to the Chairmen and Ranking Minority Members of the House and
Senate  Committees on Armed Servicesand the Subcommitteeson Defense,House and Senate
Committees on Appropriations; other appropriate congressionalcommittees; the Secretary of
the Air Force; the Director, Office of Management and Budget; and other interested parties.
Pleasecontact me at (202) 275-4268 if you or your staff have any questions concerning this
report. Major contributors to this report are listed in appendix II.

Sincerely yours,




f2s<+y
Director
Air Force Issues
  ”
Executive Summary


                   In the event of war or other contingency, about 110 C-5 and 234 C-141
Purpose            long-range aircraft will provide the principal means to airlift fighting
                   forces. During wartime, these aircraft will be flown at a much higher
                   rate than during peacetime. If the aircraft are to meet these increased
                   flying demands,they will require more spare parts to keep them oper-
                   ating. GAO reviewed the Air Force’s practices for the use and reporting
                   of war reserve spares and their impact on the Air Force’s ability to sup-
                   port the C-5 and C-141 aircraft during the first 30 days of war.

                   Spare parts to support peacetime and wartime operations are provided
Background         separately. Peacetimeoperating spares support training to prepare for
                   wartime operations. War reserve spares help the Air Force sustain
                   increased operations during war. War reserve spares for the first 30
                   days of war include base-levelsufficiency spares to support operations
                   at an aircraft’s home station and war readiness spares to support air-
                   craft at other locations.

                   Department of Defenseand Air Force policies permit the use of war
                   reserve spares in peacetime. This practice, in effect, trades off the Air
                   Force’s ability to sustain its forces during wartime for the ability to pre-
                   pare its peacetime forces for war. Becausethese spares are important to
                   wartime capability, the Air Force is required to report on their availa-
                   bility regularly to the Joint Chiefs of Staff.
                   Funding for spare parts is provided not only to buy new spare parts but
                   also to repair parts that have been used. Shortagesof peacetime oper-
                   ating spares result when flying hours exceedthose that can be sup-
                   ported by the level of spares funding that has been provided to buy new
                   spares or repair used spares.Shortagesof spare parts can adversely
                   affect military capability.


Results in Brief   Shortagesof serviceable peacetime operating spares to support the Air
                   Force’s C-5 and C-141 flying hour programs have led the Air Force to
                   rely on war reserve spares to support peacetime operations. As a result,
                   the level of war reserve spares has decreasedto the point at which the
                   C-5 and C-141 may not be able to sustain their wartime utilization rates
                   if the spares are not fully replaced when used. In addition, the level of
                   war reserve spares to support the C-5 and C-141 aircraft is not fully
                   disclosed becausecapability assessmentreports to the Joint Chiefs of
                   Staff are incomplete and incorrect.



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                                                                             WarReserveSpares
                           ExecutiveSummary




                           The Chairmen of the House and SenateCommittees on Armed Services
                           and the Secretary of Defensehave stated that changesin Eastern
                           Europe should increase contingency warning times. Most of GAO’Sfield
                           work on this assignment was completed before these changesoccurred.
                           However, the increasesin warning times noted by the Chairmen and the
                           Secretary should reduce wartime flying hour requirements and the
                           requirements for war reserve spares.This, in turn, should lessenthe
                           potential adverse impact of current shortages.


Principal Findings

War Reserve Spares Can     Current Air Force policy, adopted in 1982, allows war reserve sparesto
Be Used in Peacetime       be used when peacetime operating stocks are not available, which, in
                           effect, trades off sustainability for readiness.Before 1982, the Air Force
                           restricted the use of war reserve spares to those neededto restore an
                           aircraft to a partial or full mission-capablestatus. The current Air Force
                           policy is basedon the view that it is better to ensure peacetime training
                           and efficient maintenance operations than leave planes inoperative for
                           parts that are available from inventories of war reserve spares.As of
                           July 1989, the C-5 had about 57 percent of its required wartime spare
                           parts, and the C-141 had about 64 percent of its wartime parts.


Imbalance Exists Between   War reserve spares are being used becausepeacetime operating spares
Flying Hours and Funding   are insufficient to meet actual flying hours. The number of flying hours
                           programmed for the C-5 and C-141 has frequently exceededthe number
to Buy and Repair Spares   that could be supported by funds for purchasing and repairing peace-
                           time operating spares.Also, the actual number of flying hours has fre-
                           quently exceededthe number of programmed hours. According to Air
                           Force officials, actual hours flown are affected by training and user
                           demands.


Changing World Situation   The Chairmen of the House and SenateCommittees on Armed Services
Should Reduce              and the Secretary of Defensehave stated that recent changesin Eastern
                           Europe should increase contingency warning times. Increasesin contin-
Requirements folr War      gency warning times should reduce the tempo of operations, which, in
ReserveSpares1             turn, should decreasewartime flying hour requirements. Since war
                           reserve spares are based on wartime flying hour requirements, a
                           decreasein these requirements should result in a reduction in war


                           Page3                                     GAO/NSIAD9O-186
                                                                                  WarReserveSpares
                       ExecutiveSummary




                       reserve spares requirements. Such a reduction would mitigate the
                       adverse effect of current shortages.


Erroneous Capability   The effect of the peacetime use of war reserve spares on C-6 and C-141
Information Reported   wartime sustainability is not being fully disclosed becausethe Military
                       Airlift Command has reported incomplete and incorrect information to
                       the Joint Chiefs of Staff. The level of war reserve spares that supports
                       the C-6 and C-141 at offshore and other locations during the first 30
                       days of war is not being reported. On the other hand, the reporting of
                       war reserve spares that support the aircraft at their home stations
                       includes both reparable and throw-away parts when only reparable
                       parts should be reported.

                       GAO recommendsthat     the Secretary of Defensedirect the Secretary of
Recommendation         the Air Force to ensure that the WeaponsSystems ManagementInforma-
                       tion System includes war reserve spares kits and separately identifies
                       the availability of reparable spares, as required by Air Force
                       instructions.


                       The Department of Defensegenerally concurred with the findings and
Agency Comments        recommendation in this report. (Seeapp. I.) The Department indicated
                       that actions have been initiated to develop more accurate reporting on
                       the status of war reserve spares.




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                                                                               WarReserveSpares
Page6   GAO/NSIAIHO-lS6WarReserveSpares
contents


Executive Summary                                                                          2

Chapter 1                                                                                  8
Introduction             Objectives,Scope,and Methodology                                 10

Chapter 2                                                                                 12
Declining Availability   PeacetimeOperating SparesInsufficient to Support
                             Flying Hour Programs
                                                                                          12
of War Reserve Spares    Air Force Policy on the Use of War ReserveSpares                 14
May Reduce Wartime       Heavy Reliance on War ReserveSparesto Support                    16
Capability                   PeacetimeOperations
                         Inventories of ServiceableWar ReserveSparesBelow                 15
                             Wartime Requirements
                         Inventories of War ReserveSparesAre Likely to Decrease           16
                             Further
                         Slow Replacementof SparesUsed                                    17
                         Other Air Force Actions to Maintain Readiness                    17
                         Need to Evaluate the Impact of Changing World Situation          18
                             on War ReserveRequirements
                         Conclusions                                                      19

Chapter 3                                                                                 20
Need to Improve the      Availability of War ReserveSparesKits Not Reported               20
                         Incorrect Reporting of Base-LevelSufficiency Spares              21
Accuracy of              Conclusions                                                      22
Capability Reporting     Recommendation                                                   22
                         Agency Comments                                                  22

Appendixes               Appendix I: Comments From the Department of Defense              24
                         Appendix II: Major Contributors to This Report                   37

Tables                   Table 2.1: C-5 and C-141 Flying Hours and Peacetime              13
                             Operating Spares
                         Table 2.2: Percent of Time War ReserveSparesWere Used            15
                             to Repair Aircraft After Depletion of Peacetime
                             Operating Spares
                         Table 2.3: Percent of Shortagesin War ReserveSpares              15
                             Kits for C-5 and C-141 Aircraft



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                                                                              WarReserveSpares
          Contents




Figures   Figure 1.1: C-6 Aircraft                                          8
          Figure 1.2: C-141 Aircraft                                        9




          Abbreviations

          DOD        Department of Defense
          GAO        General Accounting Office


          Page7                                  GAO/NSIAD!3O-186
                                                               WarReserveSpares
Chapter 1

Introduction


                           In the event of a war or other contingency, the ability of the United
                           States to move forces and equipment quickly to the conflict area is vital
                           to its war fighting capability. The U.S. strategic airlift force of military
                           C-6, C-141, and KC-10 aircraft, along with commercial aircraft from the
                           Civil ReserveAir Fleet,’ would provide for a rapid and flexible delivery
                           of fighting forces in wartime. About 110 C-5 and 234 C-141 aircraft pro-
                           vide most of the Department of Defense’s(DOD) current military long-
                           range airlift capability. Figure 1.l shows a C-5 aircraft, and figure 1.2
                           shows a C-141 aircraft.
Figure 1.1: C-5 Aircraft




                           Source: DOD




                           ‘The Civil Reserve Air Fleet is the civilian component of the military’s airlift capability.



                           Page8                                                         GAO/NSIADBO-186
                                                                                                      WarReserveSpares
                             Chapter1
                             Introduction




Figure 1.2: C-141 Aircrafi
   ,I”




                             Source: DOD


                             To meet wartime airlift requirements, however, the aircraft will have to
                             operate at levels significantly above peacetime flying rates. For
                             example, flying hours for the C-5 are expected to increase from about
                             2.5 hours per day in peacetime to 11 hours per day in wartime, and
                             flying hours for the C-141 are expected to increase from about 3.5 hours
                             in peacetime to 12.5 hours per day in wartime. These increased opera-
                             tions will require many more spare parts to keep the aircraft
                             operationaL



                             ‘Spare parts range from minor items, such as washers, nuts, and bolts, to major components, such as
                             generators, landing gear, and avionic systems.



                             Page9                                                     GAO/NSJAIMO-196
                                                                                                    WarReserveSpares
                        Chapter1
                        Introduction




                        Historically, and as a matter of policy, spare parts neededto support
                        peacetime operations are bought before those neededto sustain the air-
                        lift fleet during wartime. Wartime spare parts requirements are greater
                        than peacetime requirements, identified separately, and funded after
                        peacetime requirements have been met.
                        Peacetimeoperating spares support training to ensure an adequate force
                        is available for initial wartime operations (readiness). War reserve
                        spares support increased requirements during wartime (sustainability)
                        and are divided into base-levelsufficiency spares,war readiness spares
                        kits, and other war reserve materiel. Base-levelsufficiency spares, when
                        added to the available peacetime operating spares, support aircraft at
                        their home stations, and war readiness spares kits are air-transportable
                        packagesmoved to other locations to support aircraft that are away
                        from their home stations. Base-levelsufficiency spares and war readi-
                        nessspares kits are intended to support military operations during the
                        first 30 days of war. The other war reserve materiel is prestocked at
                        depots and is intended to support operations beyond the first 30 days.


                        Our objectives were to review the Air Force’s use and reporting of war
Objectives, Scope,and   reserve spares and assesstheir impact on the spares that C-5 and C-141
Methodology             aircraft would require during the first 30 days of war. We reviewed the
                        C-6 and C-141 becausethey represent the bulk of the military’s strategic
                        airlift fleet and provide the principal means for the rapid long-range air-
                        lift of military forces.3
                        We reviewed documents, including correspondence,reports, studies, and
                        regulations dealing with the availability and use of spare parts for the
                        C-6 and C-141 and information reported on the impact of spares availa-
                        bility on the wartime capability. We did not assessthe reliability of the
                        automated data systems providing these data. We also held discussions
                        with officials at DOD, Department of the Air Force, Air Force Logistics
                        Command, San Antonio Air Logistics Center, Warner Robins Air Logis-
                        tics Center, Military Airlift Command, 22nd Air Force, 834th Airlift
                        Division, 60th Military Airlift Wing, and the 619th Military Airlift
                        Squadron.

                        Most of our field work was completed before the recent changesin
                        Eastern Europe occurred. These changes,as well as future negotiations
                        on conventional force reductions in Europe, could reduce tension
                        3The Civil Reserve Air Fleet accounts for most of the remaining long-range airlift capability.



                        Page10                                                      GAO/NSIAD-90-186
                                                                                                  WarReserveSpares
Chap&w1
Introduction




between the East and West and increase contingency warning times.
These results, in turn, could reduce requirements for wartime flying
hours and war reserve spares.These potential results and their impacts
on war reserve spares shortages are discussedin chapter 2.
We performed our review between November 1988 and October 1989 in
accordancewith generally acceptedgovernment auditing standards.




Page11                                   GAO/NSIAD-90-186
                                                       WarReserveSpares
Chapter 2                                                                                       I
DecljningAvailability of Ww ReserveSpares
May ReduceW-e         Capability

                         Shortagesof peacetime operating spares to support the C-6 and C-141
                         flying hour programs have causedthe Air Force to rely on war reserve
                         spares to support peacetime operations. As a result of this reliance and
                         the slow repair or replacement of spares used, the level of war reserve
                         spares has decreasedto the point at which the C-5 and C-141 may not be
                         able to sustain their currently required wartime utilization rates.
                         Although the peacetime use of war reserve spares supports increased
                         readiness,such use degradesthe Air Force’s ability to sustain wartime
                         requirements unless the spares are replaced.

                         The Chairmen of the House and SenateCommittees on Armed Services
                         and the Secretary of Defensehave stated that changesin Eastern
                         Europe should increase contingency warning times. These changes
                         should reduce the tempo of wartime flying hour requirements and the
                         requirements for war reserve spare parts. A review of the changing
                         world situation and its potential impacts on war reserve spares require-
                         ments is neededto measure the potential adverse effect of current
                         shortages.

                         Using peacetime operating spares faster than they can be repaired or
Peacetime Operating      replaced increasesthe demand on the inventories of war reserve spares.
Spares Insufficient to   Although the Air Force bought peacetime operating spares to meet its
Support Flying Hour      programmed peacetime flying hour requirements during the three fiscal
                         years before 1987, it frequently exceededits programmed flying hour
Programs                 program. Further, the Air Force did not always fund the repair of spares
                         at the required level, causing increased backlogs of used parts awaiting
                         repair. The backlogs have resulted in shortages of serviceable spare
                         parts to support peacetime training. This shortfall has been met by
                         withdrawals from its war reserve inventories. Since fiscal year 1987,
                         funding for both peacetime operating spares and repairs of used spares
                         has been below the level neededto support the C-6 and C-141 peacetime
                         flying hour programs. This places further demand on inventories of war
                         reserve spares. The extent to which (1) actual flying hours exceeded
                         programmed flying hours for the C-5 and C-141 and (2) spares require-
                         ments exceededbudgets for fiscal years 1987 through 1989 is shown in
                         table 2.1.




                         Page12                                    GAO/NSIAD90-186
                                                                                 WarReserveSpares
                                        Chapter2
                                        DecliningAvailability of WarReserveSpares
                                        May ReduceWartimeCapability




Table 2.1: C-5 and C-141 Flying Hours
and Peacetime Operating Spares          Dollars in millions
                                                                                              Fiscal year
                                                                                      1987            1988     1989
                                        C-5 flying hours
                                          Programmed                                 55,585        53,133     58,136
                                          Flown                                      62,032        56,457     64,916
                                          Percent                                       112           106        112
                                        C-5 spares
                                          Required                                   $124.5        $150.0     $205.9
                                          Funded                                     $108.6        $120.2     $173.3
                                          Percent                                        87            80           84
                                        C-141 flying hours
                                          Programmed                                283,022       276,079    275,326
                                          Flown                                     285,964       261,974    280,268
                                          Percent                                       101            95        102
                                        C-l 41 spares
                                        Required                                      $46.7         $34.1      $40.8
                                          Funded                                      $46.3         $27.3      $34.1
                                          Percent                                        99            80         84


                                        The Air Force’s budget for fiscal years 1990 and 1991 indicates that
                                        funding for flying hours will exceedavailable funding neededto repair
                                        spare parts. For these years, purchases of peacetime operating spares
                                        are budgeted at 100 percent of requirements, whereas the repair budget,
                                        which includes parts neededto repair spares,is programmed to be less
                                        than 100 percent of requirements. Repairs are budgeted at about 87 per-
                                        cent and about 84 percent for fiscal years 1990 and 1991, respectively.
                                        According to Air Force officials, the number of flying hours
                                        programmed for the C-5 and C-141 is the minimum neededto train air-
                                        crews for wartime missions. About 25 percent of the hours provides
                                        training in emergency procedures, air refueling, and similar tasks that
                                        cannot be accomplished on regular mission flights, Another 20 percent
                                        provides joint airborne training with the services, and the remaining 65
                                        percent provides training while meeting the airlift demands of cus-
                                        tomers. Air Force officials said that exceedingprogrammed C-5 flying
                                        hours occurs when airlift is used to support unplanned contingencies.
                                        Air Force officials also said that becausefunding for peacetime spares is
                      Y                 neededabout 2 years before the spares are intended to be used and
                                        becausecontingency-driven requirements cannot be predicted accu-
                                        rately, inventories consistently understate the actual usageof spares.


                                        Page13                                      GAO/NSIAD-90-186
                                                                                                  WarReserveSpares



                                                                                                               Y,4,i.
                      Chapter2
                      DecliningAvailability of WarReserveSpares
                      May ReduceWartimeCapability




                      DODcommented that to highlight the significance of contingency-driven
                      requirements, the Air Force has included historical data on contingency
                      flying hours in the fiscal year 1991 Program Objective Memorandum.
                      According to DOD,the data were included to underscore the need for full
                      funding of peacetime requirements, including those to repair spare
                      parts. DODofficials also said they believe the current shortages in war
                      reserve material result from shortfalls in the funding neededto repair
                      spare parts, including war reserve spares.
                      We suggestedthat one way to reduce the shortages in war reserve mate-
                      riel would be to adjust the flying hour program to account for contin-
                      gency flying. DOD officials said that someadjustments could be made,
                      However, they added that contingency flying would not satisfy many of
                      the pilot training requirements included in the flying hour programs.

                      One factor facilitating the use of war reserve spares in recent years was
Air Force Policy on   the Air Force’s adoption in 1982 of a more liberal policy for their use.
the Use of War        Before 1982, Air Force policy provided that war reserve spares could be
Reserve Spares        used to repair a system or component or another spare only if the air-
                      craft would be returned to a partial or full mission-capablecondition. It
                      also required Chiefs of Supply to verify that parts were not available
                      from peacetime operating stock and that maintenance could not repair
                      the parts in time for a scheduled mission.

                      The new Air Force policy stated that it was no longer necessarythat an
                      aircraft be returned to a partial or full mission-capablecondition for war
                      reserve spares to be used or that the need to use these spares be veri-
                      fied. This change was taken in responseto declining peacetime readiness
                      rates of aircraft causedby shortages in peacetime operating spares and
                      restrictions on the use of war reserve spares.4The Air Force recognized
                      that changing the policy would increasethe use of war reserve spares,
                      thus sacrificing sustainability for readiness.Air Force officials told us
                      that the change was basedon the view that it was better to ensure
                      peacetime training and efficient maintenance operations than have air-
                      craft be inoperative becauseof neededparts that were available from
                      inventories of war reserve spares.


                      4The DOD directive governing the management of war reserve spares allows the services to use these
                      spares to support urgent peacetime requirements. At the same time, in recognition of their impor-
                      tance to any sustained war effort, it requires that peacetime use be miniied     and stringently con-
                      trolled. It also requires that items be promptly replaced in inventories of war reserve spares.



                      Page14                                                    GAO/NSIABsO-186
                                                                                             WarReserveSpares
                                         Chapter2
                                         Declhhg Availability of Warl&serve Spares
                                         MayReduceWarthe CaPability




                      Becauseof shortfalls in peacetime operating spares,the Air Force has
Heavy Reliance on     used, to a substantial extent, war reserve spares to support its peace-
War Reserve Spares to t.rme flying hour program. As shown in table 2.2, since 1984 the Air
Support Peacetime     Force’s use of war reserve sparesto repair conditions that prevented or
                      impaired aircraft operations after depletion of peacetime operating
Operations            spares averaged about 52 percent for the C-5 aircraft and 69 percent for
                                         the C-141 aircraft.6
Table 2.2: Percent of Time War Reserve
Spares Were Used to Repair Aircraft      Calendar year                                                                   C-5           c-141
After Depletion of Peacetime Operating   1984                                                                              53               58
Spares
                                         1985
                                         ______                                                                            53               59
                                         1986                                                                              57               59
                                         1987                                                                              50               59
                                         1988                                                                              47               58


                                         According to Military Airlift Command officials, the reduced use of war
                                         reserve spares in recent years was due to depleted supplies of war
                                         reserves,not to better stocks of peacetime operating spares or decreased
                                         demand.

                                         Comparing on-hand war reserve spares to authorized quantities is one
Inventories of                           criterion the Air Force usesto assessthe capability of C-5 and C-141
Serviceable War                          aircraft to sustain operations during the first 30 days of war. According
Reserve Spares Below                     to Air Force criteria, a shortage of 36 percent or more in war reserve
                                         spares would prevent the wartime mission from being undertaken.
Wartime Requirements                     Table 2.3 shows the extent to which C-5 and C-141 war reserve spares
                                         kits were below requirements at the end of fiscal years 1985 through
                                         1989.
Table 2.3: Percent of Shortages in War
Reberve Spares Kits for C-5 and C-141    Fiscal year                                                                     C-5           c-141
Alrcratt                                 1985                                                                              30               20
                                         1986                                                                              30               19
                                         1987                                                                              27               19
                                         1988                                                                              37               29
                                         1989                                                                              26               28


                     Y




                                         “The remaining sources of repair parts were mostly cannibalization (taking parts from one aircraft to
                                         repair another aircraft) and, to a lesser extent, other sources of supply.



                                         Page16                                                     GAO/NS~QO-186WarReserveSpares
                                                                                            ,
                     Chapter2
                     DecliningAvailability of WaxReserveSpaxee
                     May ReduceWartimeCapability




                     The overall shortage of war reserve spares is greater than the shortages
                     identified in table 2.3 becausethey do not include base-levelsufficiency
                     spares that are used before the war reserve spares kits are used.
                     Although information on the shortages of base-levelsufficiency spares
                     was not available for the time period shown in table 2.3, information
                     accumulated over a 4-month period during our review shows the level of
                     shortages in base-levelsufficiency spares. For example, between April
                     and July 1989, Air Force inventory reports, which include information
                     on both base-levelsufficiency spares and war reserve spares kits,
                     showed an average shortfall of about 43 percent for the C-5 (about
                     9,000 of the 20,500 items authorized) and about 36 percent for the
                     C-141 (about 13,000 of the 36,000 items authorized). About 44 percent
                     of the C-5 shortfall and about 62 percent of the C-141 shortfall were in
                     the inventory but were awaiting repair, which takes about 2 months.
                     Preliminary data from the Air Force’s automated WeaponsSystems
                     Management Information System, intended to provide data on unit
                     resourcesand training measured against requirements, indicate these
                     shortages will significantly reduce the hours of operation and the ton-
                     nage that can be moved by the C-5 and the C-141 during the first 30
                     days of war (figures are classified).
                     DOD commented that,    in accordancewith Air Force policy, a shortage of
                     36 percent or more in required war reserve spares requires a unit to
                     obtain additional resourcesand/or training to undertake its wartime
                     missions. However, DOD added that if the situation dictated, a unit may
                     be directed to undertake portions of its missions with the resourcesit
                     has at the time. DOD also commentedthat preliminary data from the
                     WeaponsSystems ManagementInformation System was 2 to 3 years old
                     and that the Air Force is reluctant to rely exclusively on these data. We
                     recognizethe problem the Air Force is having in developing complete
                     data. This issue is discussedin chapter 3.


                     A shortage of funds to buy war reserve spares and repair spare parts
Inventories of War   will likely decreaseinventories of war reserve spares even further.
Reserve Spares Are   According to the Air Force, the war reserve spares funding require-
Likely to Decrease   ments for fiscal year 1989 were $3.3 million and $6.7 million for the C-5
                     and C-141, respectively. By fiscal year 1991, funding requirements will
Fbrther              increase to about $18 million and about $49 million for the C-5 and
                     C-141, respectively, as more war reserve spares are used to support
           Y         peacetime operations. However, according to Air Force officials, the Air
                     Force has not programmed war reserve spares funding for these years
                     becauseof other competing funding priorities. This, and the lack of


                     Page16                                      GAO/NSIADM-186WarReserveSpares
                           chapter 2
                           Deching Availability of War ReserveSpares
                           May ReduceWartimeCapability




                           repair or replacement of war reserve spares used to support peacetime
                           operations, will likely causefurther reductions in inventories of war
                           reserve spares.

                           Contributing to the shortfall in war reserve spares is the fact that it
Slow Replacement of        frequently takes months and years to replace these spares, even when
Spares Used                adequate funding is available. For example, of 3,332 C-5 and C-141
                           parts for base-levelsufficiency spares and war reserve spares kits on
                           order at one operating location, 2,541(76 percent) had been on order
                           more than 1 year. One item, a test program logic computer used on the
                           C-141, had been on order for over 3 years at the time of our review.
                           Military Airlift Command officials told us that when replacement parts
                           are received the war reserve parts are frequently not returned to war
                           reserve inventories but are used for supporting peacetime operations.

                           The Air Force, in addition to using base-levelsufficiency spares and war
Other Air Force            reserve spares kits to support peacetime operations, is using its other
Actions to Maintain        war reserve materiel and increasing its use of cannibalization (taking
Readiness                  parts from one aircraft to fix another). However, these measuresallow
                           the Air Force to support its flying hour program but further reduce its
                           ability to sustain wartime operations.


Use of Other War Reserve   In January 1989 Air Force Headquarters directed the Air Force Logis-
Materiel                   tics Command to release its other war reserve materiel to support peace-
                           time operations and fill shortages in base-levelsufficiency spares and
                           war reserve spares kits. In the short term, use of other war reserve
                           materiel to support peacetime operations can slow the rate of with-
                           drawals from base-levelsufficiency spares and war reserve spares kits.
                           However, in the long term, other war reserve materiel, like base-level
                           sufficiency spares and war reserve spares kits, may be depleted and
                           thus may not be available to support wartime operations.
                           A November 1988 Air Force Inspector General inspection raised a ques-
                           tion about how much other war reserve materiel is actually available.
                           The inspection found that the Air Force was experiencing difficulty
                           managing other war reserve materiel. It also noted that replacement of
                           the materiel after it was used for peacetime purposes was the exception
                           rather than the rule.




                           Page 17                                     GAO/NSIAD-90-188
                                                                                     WarReserveSpares
                       Chapter2
                       Declhing Availability of WarReeerveSpan%
                       May ReduceWarthe CapabUhy




Cannibalization        Early in 1989 the Military Airlift Command noted that the amount of
                       cannibalization, which normally takes place only after base-level suffi-
                       ciency spares and war reserve spares kits have been used, had increased
                       over fiscal year 1988 levels. For example, the number of times C-5 air-
                       craft were cannibalized for serviceable parts increased from 1,566 times
                       during the first 6 months of calendar year 1988 to 2,739 times for the
                       sameperiod in 1989. For the C-141, cannibalization for serviceable parts
                       increased from 3,113 to 4,314 times over the sameperiod. At one loca-
                       tion, up to six C-5 and two C-141 aircraft were being cannibalized during
                       our review. A Military Airlift Command study of the C-5 at this location
                       showed over 8,500 maintenance hours were required over a 3-month
                       period to remove and later replace the cannibalized parts.

                       DOD concurred and noted that   a number of actions were underway to
                       improve managementof other war reserve materiel. However, DOD does
                       not expect these actions to be completed until December1992.

                       On January 19,1990, the Chairman of the House Committee on Armed
Need to Evaluate the   Servicesstated that, according to information he had received, the
Impact of Changing     warning time for a contingency in Europe had increased from about 14
World Situation on     days to between 34 and 44 days. The Chairman added that the increase
                       in warning time had been developed before the changesin Eastern
War Reserve            Europe. On March 29,1990, the Chairman of the SenateCommittee on
Requirements,          Armed Servicesstated that the warning time for a contingency in
                       Europe had increased from between 10 to 14 days to between 33 and 44
                       days. The Chairman added that this increase in warning time had been
                       developed before the changesin Eastern Europe. During April 26,1990,
                       testimony before the House and SenateCommittees on Armed Services,
                       the Secretary of Defensestated that the need to reinforce our European
                       forces rapidly during a contingency will be substantially reduced by the
                       changesoccurring in Europe.
                       The recent changesin Eastern Europe noted by the Chairmen of the
                       House and SenateCommittees on Armed Servicesand the Secretary of
                       Defenseshould result in an easing of tensions between the East and the
                       West. These changesand future negotiations on conventional force
                       reductions in Europe should result in increased contingency warning
                       times and a reduction in the planned tempo of operations. These results,
                       in turn, should reduce requirements for wartime flying hours. Since war
                       reserve requirements are basedon wartime flying requirements, a
                       reduction in planned wartime flying should result in a reduction in the



                       Page18                                     GAO/NSIAIMO-186
                                                                                WarReaerveSpares
              Chapter2
              DecUng AvaiLabilityof WarReserveSpares
              May ReduceWartime Capability




              requirements for war reserve spares. These issuesand their implications
              for war reserve requirements need to be addressed.
              DOD agreed and stated that    as wartime operational requirements change
              to meet the threat, logistics support also will changeto meet the require-
              ments, DOD also noted that if changesin warning times and flying hour
              requirements occur, the amount of war reserves required to support the
              new operational requirements will be adjusted accordingly. DOD added
              that it is Air Force policy that all war reserve authorization documents
              be reviewed annually to accommodatechangesin force structure.


Conclusions   The Air Force stressesthe importance of an appropriate balance in mili-
              tary capability. It is meeting and frequently exceeding its programmed
              flying hour programs necessaryto maintain readiness.However, in the
              process,it is using its war reserve spares and degrading its ability to
              sustain its forces. Thus, given the current shortages of war reserve
              spares, it is unlikely that the C-5 and the C-141 could sustain the
              planned surge rates of 11 and 12.6 hours per day, respectively, for a 30-
              day period required during wartime.

              We are not suggestingthat the Air Force return to its policy of
              restricting the use of war reserve spares.Such restrictive use would
              likely improve inventories of war reserve spares,but it may have a neg-
              ative effect on readiness.Clearly, trade-offs exist. A central issue raised
              by the shortages of war reserve spares is whether the allocated
              resourcesare appropriately balanced between maintaining the day-to-
              day peacetime readinessof the airlift force and providing sufficient
              spares so that the Military Airlift Command can sustain required levels
              of operations during the first 30 days of wartime operations. Thus, a
              review of the implications of the changing world situation on war
              reserve requirements is neededto measure the potential adverse effect
              of current shortages.
              As we discuss in chapter 3, the Joint Chiefs of Staff is responsible for
              assessingthe capabilities of the services,but it is limited in its ability to
              do so becauseof inaccurate data on war reserve spares for the C-5 and
              c-141.




              Page19                                       GAO/NMAlBO-196WarReserveSpares
Need to Improve the Accuracy of
Capability Reporting

                      Since the end of fiscal year 1986, the Military Airlift Command has pro-
                      vided the Joint Chiefs of Staff information that doesnot accurately
                      reflect the status and levels of resourcesof C-5 and C-141 units. The war
                      reserve spares kits were not reported, and the base-levelsufficiency
                      spares were incorrectly reported. According to the Air Force, the auto-
                      mated WeaponsSystems Management Information System, currently
                      being extended to the C- 5 and C-141 aircraft, is expected to correct
                      these deficiencies. The automated system will use aircraft wartime utili-
                      zation factors and spares availability information from supply and
                      maintenance systems, such as aircraft failure rates, and service repair
                      capability to determine overall wartime capability.

                      The Status of Resourcesand Training System is supposedto provide an
Availability of War   indication, at a point in time, of a unit’s ability to undertake its missions.
Reserve Spares Kits   For example, it measurescurrent capability against wartime require-
Not Reported          ments, as shown in a unit’s DesignedOperational Capability statement.
                      The Joint Chiefs of Staff is responsible for advising the Secretary of
                      Defenseon critical deficiencies and strengths in force capabilities and
                      assessingthe effect of such deficiencies and strengths on meeting
                      national security objectives and policy and on strategic plans.

                      The level of war reserve spares kits affects the ability of C-5 and C-141
                      units to sustain operations at locations away from their home stations.
                      However, information on the availability of spare parts in the kits is not
                      reported to the Joint Chiefs of Staff becauseDesignedOperational Capa-
                      bility statements for the C-5 and C-141 units specify a fight-in-place
                      wartime mission. Thus, the Joint Chiefs of Staff doesnot have an accu-
                      rate indication of the status of C-6 and C-141 units and their resources.

                      DesignedOperational Capability statements specify whether a unit’s
                      mission is to fight in place or deploy and then fight. Units that are to
                      fight in place will be supported by base-level sufficiency spares and
                      those that are to deploy are to be supported by war reserve spares kits.
                      Most units normally have either base-level sufficiency spares or war
                      reserve spares kits but not both. Strategic airlift aircraft, on the other
                      hand, are authorized to have both becausethey operate to and from
                      their home stations through enroute locations around the world.
                      However, the status of war reserve spares kits is not incorporated into
                      the DesignedOperational Capability statement. Thus, their levels are
                      not reported to the Joint Chiefs of Staff.



                      Page20                                       GAO/NSIAJMO-186
                                                                                WarReserveSpares
                         chapter 9




                         DOD commented that   the Status of Resourcesand Training System is one
                         of several means the Joint Chiefs of Staff usesto advise the Secretary of
                         Defenseon critical deficiencies and strengths in force capabilities.
                         According to DOD, the system is an internal managementtool that indi-
                         cates, at a selectedpoint in time, a unit’s status and its level of resources
                         and training measured against the resourcesand training required to
                         undertake its wartime missions.
                         DOD commented that,    in January 1988 the Military Airlift Command was
                         authorized to report a fleet-wide readiness status for its war reserve
                         spares kits but elected not to do so until improvements were made in the
                         WeaponsSystems ManagementInformation System. According to DOD,
                         the Military Airlift Command is reporting readiness information to the
                         Joint Chiefs of Staff, and the accuracy of the information will continue
                         to improve as system problems are resolved.

                         Incorrect information is reported on the availability of the base-level
Incorrect Reporting of   sufficiency spares required to sustain wartime operations of the C-5 and
Base-LevelSufficiency    C-141 at their home stations during the first 30 days of war. This erro-
Spares                   neous reporting is the result of the Military Airlift Command not fol-
                         lowing a November 1986 Air Force regulation on the reporting of
                         capability information. DOD agreedthat information provided by the Mil-
                         itary Airlift Command is not in accordancewith Air Force directives.

                         Air Force regulations require that capability be measured against avail-
                         able investment spares,which consist of major aircraft componentsthat
                         are removed from the aircraft, repaired, and replaced as needed.How-
                         ever, the Military Airlift Command combined investment spares with
                         throw-away expensespares,which are items that are used once and
                         then discarded. This practice overstates C-5 and C-141 capability.
                         Military Airlift Command officials said that they believe the require-
                         ment that only investment spares be reported is a limitation of the
                         WeaponsSystems ManagementInformation System and that expense
                         items are a viable portion of their capability assessment.While we did
                         not review the merits of the Air Force’s decision to include only invest-
                         ment spares in the system, we believe the Military Airlift Command’s
                         inclusion of expensespares with investment spares is incompatible with
                         the capability reporting on other aircraft. It also results in an overstated
                         capability relative to those other aircraft. If the Military Airlift Com-
                         mand believes that both categoriesof spares should be reported, it needs



                         Page21                                      GAO/NSIALMO-186
                                                                                  WarReserveSpares
                  chaptera
                  Needto Improvethe Accuracyof
                  QpablW *portine




                  to identify the categoriesseparately to provide decisionmakers with a
                  more accurate picture of the aircraft’s capabilities.

                  The Military Airlift Command is reporting incomplete and incorrect
Conclusions       information to the Joint Chiefs of Staff. This limits the usefulness of
                  these reports in the Joint Chiefs’ of Staff assessmentof the Military Air-
                  lift Command’s status and level of resources.The spares available in
                  war readiness spares kits, which support aircraft at deployed locations,
                  are not reported. Also, since the end of fiscal year 1986, information
                  reported on the availability of base-levelsufficiency spares,which sup-
                  port wartime operations at the aircraft’s home station, has generally
                  overstated capability. This resulted becausethe Military Airlift Com-
                  mand reported capability based on the combined quantity of both
                  investment and expensespares, not on available investment spares as
                  required.

                  We recommend that the Secretary of Defensedirect the Secretary of the
Recommendation    Air Force to ensure that the WeaponsSystems ManagementInformation
                  System includes the availability of spares in war reserve spares kits and
                  separately identifies the availability of the investment spares, as
                  required by Air Force instructions.

                  DODgenerally concurred with our findings and recommendation. (See
Agency Comments   app. I.) DODcommented that actions to develop more accurate reporting
                  on the status of war reserve spares have started. According to DOD,(1)
                  the Air Force has adjusted the WeaponsSystems Management Informa-
                  tion System to provide reasonablestrategic war reserve spares kits and
                  base-levelsupply sufficiency data and (2) the Commander-in-Chief, Mili-
                  tary Airlift Command, has approved the system for use. Other DODcom-
                  ments have been incorporated into the report where appropriate.




                  Page22                                     GA0/NSIAD90436WarReserveSpares
Page23   GAO/NSIAD-30-186
                       WarReserveSpares
Appendix     I




CommentsFrom the Department of Defense                                                                                *


supplementing those in the
report text appear at the
                                                  ASSISTANT    SECRETARY       OF DEFENSE
end of this appendix.                                    WASHINOTON. D.C.   2030!-8000




                                                                                April    23,   1990



                             (L/SD)


                             Mr. Frank C. Conahan
                             Assistant Comptroller General
                             National Security and International
                               Affairs Division
                             U.S. General Accounting Office
                             Washington, DC 20548
                             Dear Mr. Conahan:
                                  This is the Department of Defense (DOD) response to the General
                             Accounting  Office (GAO) Draft Report, "MILITARY AIRLIFT: Peacetime
                             Use of War Reserve Spares Reduces Wartime Capability,"  dated
                             February 21, 1990 (GADCode 392461) OSDCase 8245. The Department
                             generally concurs with the findings and recommendations.
                                      The Air Force Logistics Commandhas adjusted the Weapons Systems
                              Management Information System to provide reasonable strategic War
                              Reserve Spares Kits/Base Level Supply Sufficiency data for Status of
                              Resources and Training System reporting.                der in Chief,
                                                                            The Connnan
                             -Military    Airlift  Coarnandhas approved the use of the WeaponsSystems
                              Management Information System.
                                  The detailed DODconnnents on the report findings and
                             recommendations are provided in the enclosure.    The DODappreciates
                             the opportunity to conrnent on the draft report.
                                                                                 Sincerely,



                                                                                 Principal Deputy

                             Enclosure




                                   Page24                                                 GAO/NSIAD90-186WarReserve
                                                                                                                 Spares
                               AppendixI
                               CommentsFromthe Departmentof Defense




                                        QACDRNITREPORT- DATED-       21, 1990
                                            (@LOCODE392461) 08D UUE 8245
                                   “MILITARX AIRLIFT: PEACETIMEUSE OF W R&SEPLVE
                                           SPARESREDUCEStamTIm CAPABILITY"



                                                        *****




                         .   JEINDXNG  J& Back;acound: Airlift     Reauirementz. The CA0 reported
                             that most of the DODlong range airlift        capability is provided by
                             about 110 C-5 and 234 C-141 aircraft.        The GAOexplained that, in
                             order to meet wartime airlift      requirements, the aircraft will
                             have to operate at levels significantly       above peacetime flying
                             rates--with  the C-5 aircraft     expected to increase its flying
                             hours from about 2.5 hours per day in peacetime to 11 hours in
                             wartime, and the C-141 aircraft      from about 3.5 to 12.5 hours per
                             by.    The GAOobserved that such increased operations would
                             require many more spare parts to keep the aircraft       operational.
                             The GAOalso reported that, historically     and as a matter of
                             policy, spare parts needed to support peacetime operations are
                             bought before those needed to sustain the airlift    fleet during
                             wartime. The GAOexplained that wartime requirements are above
                             peacetime levels, identified   separately, and funded after the
                             peacetime levels have been met. The GAOfurther explained that
                             peacetime operating spares support training to ensure initial
                             wartime readiness, while war reserve spares support wartime
Now on pp. 2,8-10.           sustainability.    (p. 2, pp. g-lo/GAO Draft Report)

                             WD:              Concur.
                         .   rINRTNG:     J?mmtb    Q-=thciBmeSpateft AIce mwfici-+   To
                                                             . The GAOfound that, during the
                             3 years prior to 1987, the Air Force bought peacetime operating
                             spare parts to meet its programmed peacetime flying hour
                             requirements, but the Air Force frequently exceeded the
                             programmed flying hour program. The CA0 also noted that the Air
                             Force did not always fund the repair of spares at the required
                             level, causing increased backlogs of used parts awaiting repair.




                     Y




                              Page26                                       GAO/NSJADBO-188
                                                                                        WarReserveSpares
                               AppendixI
                               CommentsFromthe Departmentof Defense




                           The GAOobserved that this has resulted in shortages of
                           serviceable spare parts to support peacetime training,  which has
                           been met by Air Force withdrawals from its war reserve
                           inventories.    The GAOfound that, since 1987, funding for both
                           peacetime operating spares and for repairs of used spares has
                           been below the level needed to support the C-5 and C-141
                           peacetime flying hour programs-- thus placing further demand on
                           war reserve inventories.
                           The GAOalso found that the Air Force FY 1990-FY 1991 budget
                           indicates that flying hours will continue to exceed available
                           funding to repair spares--with the repair budget for FY 1990 and
                           PY 1991 at about 87 percent and 84 percent, respectively,      of
                           requirements.    The GAOreported that, according to Air Force
                           officials,   the number of flying hours programmed for the C-5 and
                           the C-141 aircraft    are the minimum needed to train the air crews
                           for wartime missions--and that exceeding programmed C-5 flying
                           hours occurs when airlift    is used to support unplanned
                           contingencies.     The GAOalso reported that, according to Air
                           Force officials,    because funding for peacetime spares is needed
                           about 2 years prior to their intended use and because it is
                           impossible to accurately predict contingency-driven     requirements,
Now on pp. 2, 12-14.       inventories consistently    understate the actual spares usage.
                            (p. 2, pp. 13-IS/GAO Draft Report)
                           s:              Concur. In order to highlight    the significance
                           of the contingency-driven  requirements, the Air Force has
                           included contingency flying hours in the FY 1991 Program
                           Objective Memorandum,based on historical    data. The intent is
                           to underscore the need for full funding of both peacetime
                           requirements and the repair program.
                       l   ITINOINaC:-
                           The GAO reported  that, prior to 1982, Air Force policy provided
                           that war reserve spares could be used to repair a system or
                           component or another spare &     if it returned an aircraft  to a
                           partial or fully mission capable condition--and  also required
                           that Chiefs of Supply verify the parts were not available from
                           peacetime operating stock. The GAOfound that, in 1982, however,
                           the Air Force adopted a new policy under which it was no longer
                           necessary that an aircraft be returned to a partial or fully
                           mission capable condition in order to use war reserve spares, nor
                           was it required that the need to use these spares be verified.
                           The GAOexplained that this change was made in response to



                                                            2




                              Page26                                    GAO/NSIAD-90-186
                                                                                      WarReserveSpares
                           AppendixI
                           CommentsFromthe Departmentof Defense




                          declining peacetime aircraft  readiness rates caused by shortages
                          in peacetime operating spares and the restrictions   on the use of
                          war reserve spares. According to the GAO, the Air Force
                          recognized that changing the policy would increase the use of war
                          reserve spares, and thus sacrifice sustainability   for readiness,
                          but said the policy change was based on the view that it is
                          better to ensure peacetime training and efficient  maintenance
                          operations, than it wa8 to leave planes inoperative for want of
                          parts when those parts were available from war reserve spares
Now on pp, 2-3, 14.       inventories.   (pp. 2-3, pp. 16-17/GAO Draft Report)


                      .
                          m          Ocellaf;ipnn. The GAOfound that, because of short-
                          falls in peacetime operating spares, to a substantial extent, the
                          Air Force has used its war reserve spares to support its
                          peacetime flying hour program. According to the 0,          since 1984,
                          the Air Force use of war reserve spares to repair conditions that
                          prevented or impaired aircraft  operations after depletion of
                          peacetime operating spares averaged about 52 percent for the C-5
                          aircraft  and 59 percent for the C-141 aircraft.    The GAOpointed
                          out that, according to Military Airlift   Comman d officials,    the
                          reduced use of war reserve spares in recent years was due to
                          depleted supplies of war reserves--not to better stocks of
Now   on pp. 3,15.        peacetime operating stocks or decreased demand. (PP. 3-4,
                          pp. 17-lE/GAO Draft Report)
                          poD:            Concur.
                                                 le  War Reserve mrer   Inventories Below
                                                    The GACreported that comparing war
                          reserve spares on hand to authorized quantities is one criterion
                          used by the Air Force to assess the capability    of the C-5 and
                          C-141 aircraft   to sustain operations during the first 30 days of
                          war. The GAOfurther reported that Air Force criteria      indicates
                          that a shortage of 36 percent or more in required war reserve
                          spares would prevent the wartime mission from being undertaken.
                          The GAOfound that, for FY 1989, the percentage of shortages in
                          war reserve spdres kits for the C-5 and the C-141 aircraft was 26
                          percent and 28 percent, respectively.     The GAOpointed out,
                          however, that the overall shortage of war reserve spares is
                          significantly  greater, because these shortages do not include
                          base level sufficiency    spares that are used before war reserve



                                                          3




                           Page27                                       GAO/NSIAD-90-180WarReserveSpares
                           AppendixI
                           CommentsPromthe Departmentof Defense




                          kits.     The GAOfound, for example, that between April and
                          July 1909, Air Force inventory reports (which include both base
                          level sufficiency    spares and war reserve spares kits), showed an
                          average shortfall    of about 43 percent for the C-5 aircraft,   and
                          about 36 percent for the C-141 aircraft.      The CiACnoted that
                          about 44 percent of the C-5 shortfall     and 62 percent of the C-141
                          shortfall    were in the inventory, but awaiting repair.    The GAO
                          reported that preliminary data from the Air Force automated
                          Weapons Systems Management Information System indicated that war
                          reserve spares shortages will significantly     reduce the hours of
                          operation and the tonnage that can be moved by the aircraft
Now on pp.4   15-16       during the first 30 days of war. (p. 4, pp. 18-2O/GAODraft
                          Rsport)
                          WD:             Concur. In accordance with current Air Force
                          policy, a 36 percent or more shortage in required war reserves
                          spares requires the unit to obtain additional resources and/or
                          training to undertake its wartime mission, but if the situation
                          dictates, it may be directed to undertake portions of its
                          wartime mission with the resources on hand.
                          With respect to the use of the automated Weapons Systems
                          Management Information System, the SACused preliminary Weapons
                          Systems Management Information System reports based on spares
                          kits which were 2 to 3 years old. The Air Force is reluctant to
                          rely exclusively on the WeaponsSystems Management Information
                          System until final requirements in the kit computation are made.
                          The DODis taking action to improve the accuracy of the data by
                          the end of 1990. (See the DODresponse to Recommendation 1.)
                      .   ZilUW!U:     P--e     For Futwx4 War mm-      -=a       I-ntoriea   .
                          The GACreported that, according to the Air Force, the war
                          reserve spares funding requirement for FY 1989 was $3.3 million
                          for the C-5 aircraft  and $6.7 million for the C-141 aircraft.
                          The GAOreported that, by FY 1991, requirements will increase to
                          about $18 million for the C-5 and $49 million for the C-141--as
                          more war reserve spares are used to support peacetime operations.
                          The GACfurther reported, however, that according to Air Force
                          officials,  fund5 have not been programmed for war reserve spares
                          funding for these years because of other competing priorities.
                          The GACalso noted that contributing    to the shortfall     in war
                          reserve spares is that it frequently takes months and years to
                          replace the spares, even when the money is available.         The GAO
                          concluded that these factor5 are likely to cause further



                                                          4




                            Page28                                     GAO/NSIAD-90-186
                                                                                     WarReserveSpares
                           AppendixI
                           CommentsFromthe Departmentof Defense




Nowonpp.3,16.            reductions in war reserve spares inventories.                (P. 4,
                         pp. 20-21/GAo Draft Report)
                         m:              Concur. It should be recognized, however, the
                         use of more war reserve spares to support peacetime operation5
                         will not produce larger war reserve spares requirements.      Once
                         an asset has been classified   as a war reserve spare it is
                         considered protectable.    These protectable assets, whether in
Seecommentl.             the kit or unservicable, are always classified    as War Reserve
                         Materiel assets in the budget process. Therefore, use of War
                         Reserve Materiel will not increase the war reserve spares
                         requirement.   Changes in authorizations,   due to demand rate
                         changes, modifications,   or increases in the number of aircraft,
                         will increase requirements.
                     .   kzpJDING0: @her Air Force Actions To Maintain Readiness. The
                         GAOfound that, in addition to using its base level sufficiency
                         spares and war reserve kits to support peacetime operations, the
                         Air Force is also using other war reserve material and increasing
                         cannibalization          to maintain readiness.            The GAOreported that, in
                         January 1989, Air Force Headquarters directed the Logistics
                         Commandto release its other war reserve material to support
                         peacetime operations and fill                    shortages in base level sufficiency
                         spares and war reserve kits.                    The GAOobserved that, while this
                         can--in the short tenn--slow the rate of withdrawals of base
                         level sufficiency            spares and war reserve spares kits, over time
                         other war reserve material may also be depleted and not be
                         available    to     support       wartime     operations.     The GAOnoted that
                         there is also some question as to how much other war reserve
                         material is available, based on an Air Force Inspector General
                         report that found the Air Force had lost control over the amount
                         of serviceable spares               available and had not replaced them when
                         used. In addition,             the GAOreported that, early in 1989, the
                         Military    Airlift         Commandnoted that cannibalization,           which
                         normally takes place only after base level sufficiency                     spares and
                         war reserve spares kits are used, had increased over 1988 levels
                         for both the C-5 aircraft                 and the C-141 aircraft.      The GAO
                         concluded that these measures, while allowing the Air Force to
                         support its flying hour program, further reduce the Air Force
Now on pp,3, 17-16       ability   to sustain          wartime      operations.      (pp. 3-4, pp. 21-23/GAO
                         Draft Report)
                         ~RE~PONSE: Concur. The management of Other War Reserve
                         Materiel was a manual, labor intensive process, requiring the




                           Page29                                               GAO/NSIAD-99-186
                                                                                              WarReserveSpares
     AppendivI
     CemmentakomtheDeparbmentofDefense




    use of a variety of forms to maintain the accountability      of
    assets. A complete review of the Other War Reserve Materiel
    policy and procedures was conducted by Headquarters, Air Force
    Logistics Conmand. As a long-term fix, Headquarters, Air Force
    Logistics Commandincluded in the recoverable items process
    functional description for the Requireznents Data Dank a
    requirewent to provide an inventory baseline for War Reserve
    Spares Kits/Base Level Supply Sufficiency and Other War Reserve
    Materiel.    The Requirements Data Sank will be operational in
    1994. For an interim fix, the Air Force Logistics Conmand
    provided guidance to the Air Logistics Centers to manually
    maintain visibility    of purchased Other War Reserve Materlel by
    using the Air Force Logistics commandForm 318. Additionally,
    documentation recording the use of Other War Reserve Materiel
    should be maintained by the War Reserve Materiel monitor at each
    Air Logistics Center. This guidance is in Air Force Memorandum
    67-1, Volwne III.     A change to the current Stock Control and
    Distribution    System, DO3SA,was also requested to facilitate    the
    use of Other War Reserve Materiel assets and provide an audit
    trail;    however, due to the implementation of other interfacing
    data systems to the D035A, this system change will not be ready
    to implement until December 1992.
.   ltZNX%U:    Ewd To Evaluate   Thece        In 8iJkkaw   C=alzUW
                                     ld Situatiou.      The GAOobserved
    that, while the Air Force stresses the importance of an
    appropriate balance in military capability        and is meeting and
    frequently exceeding the programwed flying hour programs
    necessary to maintain readiness, in the process it is using its
    war reserve spares and degrading its ability        to sustain its
    forces.     The GAOconcluded that, with the current level of war
    reserve spares, it is unlikely that the C-5 and C-141 can sustain
    the required wartime surge rates. The GAOstated that it is not
    suggesting that the Air Force return to its former policy of
    restricting    the use of war reserve spares, since this would
    likely have a negative effect on readiness.         The GAOobserved,
    however, that clearly there are trade-offs.         The GAOfurther
    concluded that a central issue raised by the shortage of war
    reserve spares is whether there is an appropriate balance In the
    resources allocated between (1) maintaining the day-to-day
    peacetime readiness of the airlift      force and (2) providing
    sufficient    spares so that the Military Airlift     Cormnandcan
    sustain the required levels of operations during wartime.




                                   6




     Page30
                        AppendixI
                        CommentsFromthe Departmentof Defense




                       The GAOalso observed that recent changes in Eastern Europe could
                       result in an easing of tensions-and   that these changes, along
                       with future negotiations on conventional force reductions in
                       Europe, could result in increased contingency warning times. The
                       GAOexplained that these results could, in turn, reduce wartime
                       flying hour requirements and the requirements for war reserve
                       spares. The GAOobserved that, on the other hand, if United
                       States troop levels are reduced in Europe but commitments for
                       their rapid return remain, the level of wartime flying could
                       still  be high. The GAOconcluded that a review of the
                       Implications of the changing world situation on war reserve
                       requirements is needed to fully measure the potential adverse
Nowon pp. 18-19.       effect of the shortages.   (p. 4, pp. 23-24/GAO Draft Report)
                       wDQ9.Q:           Concur. Readiness provides the means for
                       reacting to worldwide contingencies that develop suddenly and
                       are relatively    short in duration.     Sustainability,     on the other
                       hand, concern8 the ability     to conduct global operations for long
                       periods of time in global conventional scenarios.            Considering
                       recent history (since the appearance of the C-141 and C-5
                       aircraft),    the record indicates more of the former type of
                       conflicts   have occurred. As stated by the GAO, recent world
                       events would suggest this trend of regional, short contingencies
                       will continue.     In this light, past Air Force policy decisions
                       have supported readiness over sustainability,          given the funding
                       shortfalls    which preclude funding both. As wartime operational
                       requirements change to meet the threat, logistics           support will
                       also change to meet the requirement.        If changes to warning
                       time, flying hour requirements, etc., occur, the amount of war
                       reserves required to support the new operational requirement
                       will be adjusted accordingly.       It is Air Force policy that all
                       War Reserve authorization     documents will be reviewed annually to
                       accommodate changes in force structure.
                   .   -I:             &&&&&Litv    Of War Reserve Spares Mts Not Reoorted.
                       According to the GAO, the Status of Resources and Training System
                       Is supposed to provide the Joint Chiefs of Staff timely and
                       accurate   assessments   of a unit's ability    to accomplish its
                       mission during the first 30 days of war, by measuring current
                       capability    agaihst  wartime requirements.     The GAOfound that,
                       although the level of war reserve spares kits affects the ability
                       of the C-5 and C-141 aircraft       to sustain operations at locations
                       away from their home stations,       information on their availability
                       is not reported to the Joint Chiefs of Staff--because Designed



                                                         7




                        Page31                                         GAO/NSIAD-90-186
                                                                                     WarReserveSpares
                          AppendixI
                          CommentsFromthe Departmentof Defense




                       Operational Capability statements for the aircraft      units   specify
                       a fight-in-place wartime mission.
                       The GAOexplained that Designed Operational Capability
                       statements specify whether a unit's mission is to fight in place
                       or deploy and then fight--with       units that fight in place
                       supported by base level sufficiency        spares and those that deploy
                       supported by war reserve spares kits.         The GAOfurther explained
                       that strategic airlift    aircraft     are authorized to have both
                       types of spares because they operate to and from their home
                       bases through enroute locations around the world. The GAO
                       found, however, that war reserve spares kits are not
                       incorporated into the Designed operational Capability statement
                       and thus their levels are not reported to the Joint Chiefs of
                       Staff.   The GAOconcluded that such incomplete reporting has
                       limited the ability    of the Joint Chiefs of Staff to assess the
                       true state of the military's       ability to sustain a war.
Now on pp, 4, 20-21,    (pp. 4-5, pp. 27-28, p. 3O/GAODraft Report)
                       DODRESPONS&: Partially      concur. The Status of Resources and
                       Training System is one of several means by which the Joint
                       Chiefs of Staff carry out their responsibilities    to advise the
                       Secretary of Defense on critical    deficiencies and strengths in
                       force capabilities,    and to assess the effect of such
                       deficiencies   and strengths on meeting national security
                       objectives and policy on strategic plans. The status of
                       Resources and Training System reflects the status of a select
                       unit's resources and training measured against the resources and
                       training required to undertake the wartime mission for which the
                       unit was organized or designed.
See comment 2.         The Department does not concur with the GAOstatement that the
                       Status of Resources and Training System is supposed to provide
                       the Joint Chiefs of Staff timely and accurate assessments of a
                       unit's ability  to accomplish its mission during the first 30
                       days of war. According to Joint Chiefs of Staff Memorandumof
                       Policy 189, "Status of Resources and Training System," the
                       Status of Resources and Training System is an internal
                       management tool that "indicates,  at a selected point in time,
                       unit status and the level of resources and training measured
                       against the resources and training required to undertake the
                       mission for which it was organized or designed."    The Status of
                       Resources and Training System is a snapshot system and no time
                       limit such as 30 days is imposed. Furthermore, the Joint Chiefs



                                                        8




                          Page32                                        GAO/NSJAIMO-186
                                                                                     WarReserveSpares
     AppendixI
     CommentsFromthe Departmentof Defense




    of Staff Memorandumof Policy 189 goes on to state that Status
    of Resources and Training System "category levels do not project
    a unit's combat performance once committed to combat." -part
    of the Status of Resources and Training System, the Air Force
    uses Designed Operational Capability statements to determine
    appropriate measurement criteria   for a particular unit.
    Prior to 1988, War Reserve Spares Wits was not reported in the
    Status of Resources and Training System because it was not under
    the direct control of unit commanders; it therefore, failed the
    criteria   for being included in unit-level reports.    Since
    January 1988, the Military Airlift     Commandwas authorized to
    report a fleet wide c-level for its War Pesenre Spares Kits but
    elected not to do so until the Weapons Systems Management
    Information System developed the capability to provide a fleet-
    wide c-level.    The Military Airlift   Commandis currently
    reporting complete and more accurate readiness information to
    the Joint Chiefs of Staff.    The accuracy of the information will
    continue to improve as remaining Weapons Systems Management
    Information System and data feed problems are resolved.
.   -J:           Base Level Sufficiencv spares Are Beina In-
    &@oorteQ. The GAOreported that Air Force regulations require
    that capability be measured against available investment
    spares--consisting    of major aircraft    components that are removed
    from the aircraft,    repaired, and replaced, as needed. The GAC
    found, however, that the Military Airlift         Commandcombined
    investment spares with throw-away expense spares, thus
    overstating C-5 and C-141 aircraft       capability.   The GAOreported
    that, according to Military Airlift       Commandofficials,    the
    requirement that only investment items be reported is a
    limitation   of the Weapons Systems Management Information
    System--and that expense items are a viable portion of their
    capability   assessment. The GACacknowledged that it did not
    review the merits of the Air Force decision to include only
    investment items in the system. The GAOobserved, however, that
    the inclusion of expense with investment items by the Military
    Airlift    Commandis incompatible with the capability       reporting on
    other aircraft,    resulting in an overstated capability      relative to
    those other aircraft.       The GAOconcluded that such incorrect
    reporting has limited the ability       of the Joint Chiefs of Staff to
    assess the true state of the military's       ability  to sustain a war.
    The GAOreported that, according to the Air Force, the automated
    Weapons Systems Management Information System, currently being



                                     9




     Page33                                        GAO/NSIAD-90-186
                                                                 WarReserveSpares
                                                                                                   ,
                        Appendix I
                        CmnmentsPromtheDepartmentofDefense




                       extended to the C-5 and the C-141 aircraft,   is expected to
                       correct the reporting deficiencies   it [the GAO] found. The GAD
                       explained that the automated system will use aircraft wartime
                       utilization  factors and spares availability  information from
                       supply and maintenance systems, such as aircraft    failure rates
Now on pp. 4,21        and service repair capability,   to determine overall wartime
                       capability.    (pp. 4-5, pp. 27-3O/GAODraft Report)
                       DODR&SPm:           Partially  concur. While the Department agrees
                       that information provided by the Military Airlift        Coannand is not
                       in accordance with Service directives,        it may not bs either
                       incomplete or incorrect, as evidenced by the GAO's
                       acknowledgment that it did not consider the merits of including
                       "throw-away expense spares." In addition, since the Status of
See comment 3          Resources and Training System was never intended to assess the
                       military's    ability    to "sustain,V1 the Department does not fully
                       agree with the statement that this has *'...limited       the Joint
                       Chief's ability to assess the true state of the military's
                       ability    to sustain a war."
                                                   *****


                   .                    : The SAC recommendedthat the Secretary of
                       Defense direct the Secretary of the Air Force to assure that the
                       Weapons Systems Management Information System will include the
                       availability  of spares in war reserve spares kits and separately
                       identify the availability  of the major investment spares, as
Now on pp. 4,22.       required by Air Force instructions.    (p. 5, p. 3O/GAODraft
                       Report)
See comment 4.                       : Concur. TheMilitary  Airlift  Commandhas been
                       working toward this goal. The Air Force Logistics Commandhas
                       finally  adjusted the Weapons Systems Management Information
                       System to the point where it provides reasonable strategic War
                       Reserve Spares Kits/Base Level Supply Sufficiency data for
                       Status of Resources and Training System reporting.    The
                       Commanderin Chief, Military Airlift   Command,has approved its
                       use and the Military Airlift  Command'sMarch 1990 fleet reports
                       for both the C-5 and C-141 fleets reflect these assets. The
                       Coaunanderin Chief, Military Airlift  Command,will continue to
                       exercise commander's judgment, in accordance with Air Force
                       Regulation 55-15, toward the machine-derived assessments until



                                                           10




                       Page 34                                       GAO/NSIAD90-lS6 War ReserveSpares
c
       Appendix I
       CommentsFromtheDepartmentofDefenee




    final data clean-up and model adjustments are complete. The
    validity     of the module will be tested during the C-141 Volent
    Cape II exercise to be held during August 1990. Exercise
    results will be used to validate the module. The estimated
    completion date Is November 30, 1990. In view of these
    initiatives,      there is no need for additional DODguidance at the
    present time.




                                  11




       Page 35                                     GAO/NSLADBO-lS6War ReserveSpares
               AppendixI                                                               J
               CommentsFromthe Departmentof Defense




               The following are GAO'S comments on the Department of Defense’sletter
               dated April 23, 1990.

               1. We recognizethat changesin requirements can result from changesin
GAO Comments   authorizations. However, the peacetime use of war reserveshas resulted
               in current shortages, and inventories of war reservesare likely to
               decreasefurther.
               2. The text has been clarified to reflect   WD'S   concerns.

               3. Including expensespares in the data is inconsistent with Air Force
               procedures. If the Military Airlift Command believes that this informa-
               tion should be reported, it should state its concernsto the Air Force and
               provide separate reporting. We have deleted the statement about the
               limitations placed on the Joint Chiefs ability to assessthe true state of
               the military’s ability to sustain a war.

               4. We concur that no new guidelines are necessary.Effective implemen-
               tation of current initiatives can provide accurate reporting of the status
               of war reservesfor the C-5 and C-141 aircraft.




               Page36                                        GAO/NSIAD-90-186
                                                                           WarReserveSpares
Appendix II

Major Contributors to This Report


                        Norman J, Rabkin, Associate Director
National Security and   Charles W. Thompson, Assistant Director
International Affairs   William L. Wright, Assistant Director
                        Edward H. Cramer, Evaluator
Division,
Washington, DC.
                        Floyd Adkins, Evaluator-in-Charge
San Francisco           Patricia Elston, Evaluator
Regional Office




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