Force Structure Restructuring And Rebuilding The Army Will Cost Billions Of Dollars For Equipment But The Total Cost Is Uncertain

The high pace of overseas operations is taking a heavy toll on Army equip. Harsh combat and environmental conditions over sustained periods of time have exacerbated equip. repair, replacement, and recapitalization problems. To support ongoing operations and prepare for the future, the Army has embarked on 4 initiatives: (1) restructuring from a div.-based force to a modular brigade-based force; (2) expanding the Army by adding 74,000 people; (3) repairing, replacing, and recapitalizing new equip.; and (4) replacing equip. borrowed from its pre-positioned equip. sets. This statement addresses: the equip. related cost of Army initiatives, and the mgmt. challenges facing the Army and the actions needed to improve its implementation of these initiatives.

Force Structure: Restructuring and Rebuilding the Army Will Cost Billions of Dollars for Equipment but the Total Cost Is Uncertain

Restructuring and rebuilding the Army will require billions of dollars for equipment and take years to complete; however, the total cost is uncertain. Based on GAO's analysis of Army cost estimates and cost data, it appears that the Army's plans to equip modular units, expand the force, reset equipment, and replace prepositioned equipment are likely to cost at least $190 billion dollars through fiscal year 2013. Further, the Army has stated it plans to request additional funds to address equipment shortfalls in modular units through fiscal year 2017. Several factors are contributing to the uncertainties about future costs. First, the Army's $43.6 funding plan for equipping modular units was based on preliminary modular unit designs and did not fully consider the needs of National Guard units. Second, the Army expects to need $18.5 billion for equipment to expand the force but has not clearly documented this estimate. Third, costs to reset equipment may total at least $118 billion from fiscal years 2004-2013 but may change because they are dependent on how much equipment is lost, damaged, or worn beyond repair during continuing operations in Iraq and Afghanistan and how long these operations continue. Fourth, the Army believes it will need at least $10.6 billion to replace prepositioned equipment that was taken out of storage to support ongoing operations, but this amount is an estimate. Given the magnitude of these initiatives and potential for costs to change, DOD will need to carefully monitor the projected costs of these initiatives so that it can consider tradeoffs and allocate funding to balance the Army's equipping needs for the next decade and longer term transformation goals. A common theme in GAO's work has been the need for DOD and the Army to take a more strategic approach to decision making that promotes transparency and ensures that programs and investments are based on sound plans with measurable, realistic goals and time frames.

The DoD prepositions equip. at locations around the world in order to field combat-ready forces in days. DoD must submit an annual report that addresses: (1) the level of fill for major end items of equip. and spare parts, (2) the materiel condition of equip. in the prepositioned stocks (PS), (3) a list of major end items drawn from PS that FY and a description of how the equip. was used and whether it was returned to the PS after its use, (4) a timeline for reconstituting any shortfall in the PS, (5) an est. of the funding required to reconstitute any shortfall in the PS and a plan for carrying out the reconstitution, and (6) a list of operations and plans affected by a shortfall in the PS and a description of the action taken to mitigate any risk created by that shortfall.

This monograph offers key considerations for DoD as it works through the on-going defense review. The author outlines eight principles for a risk management defense strategy. He argues that these principles provide "measures of merit" for evaluating the new administration's defense choices. This monograph builds on two previous works-- Known unknowns: unconventional "strategic shocks" in defense strategy development and The new balance: limited armed stabilization and the future of U.S. landpower. Combined, these three works offer key insights on the most appropriate DoD responses to increasingly "unconventional" defense and national security conditions. This work in particular provides DoD leaders food for thought, as they balance mounting defense demands and declining defense resources.