Equipment Reset

Written by Dawn S. Onley

Sustaining a war for nearly five years takes a heavy toll on the military equipment that warfighters rely on to perform their missions.

Congress has doled out more than $49 billion dollars to the Army and Marine Corps in supplemental appropriations, since fiscal year 2002, to repair and replace equipment— a process known as equipment reset. Now, legislators want to ensure that the money appropriated for equipment reset is actually spent for that purpose and that the military’s reset strategies can keep equipment up and available to meet operational requirements.

In a recent Government Accountability Office (GAO) report entitled: “Army and Marine Corps Cannot Be Assured That Equipment Reset Strategies Will Sustain Equipment Availability While Meeting Ongoing Operational Requirements,” the congressional watchdog agency found that the Army and Marine Corps were not providing a detailed accounting of their procurement expenditures for equipment reset way mainly because they are not legally required to do so in the DoD Financial Management Regulation (FMR). The services are, however, reporting detailed reset obligations and expenditures in their operation and maintenance accounts, as directed by the conference report accompanying DoD’s appropriations act for 2007.

“Consequently, neither DoD nor Congress can be assured that procurement funds appropriated for equipment reset are being obligated and expended for equipment reset for deploying units and units preparing to deploy to Iraq and Afghanistan instead of other, more long-term equipment needs,” wrote William M. Solis, GAO’s director of defense capabilities and management, in the GAO report.

Although the Army and Marine Corps continue to meet mission requirements and report high readiness rates for deployed units, GAO found there is an ever increasing risk to overall operational readiness due to equipment shortages and equipment readiness shortfalls. For this reason, costs to repair, replace and recapitalize equipment will increase significantly in DoD annual budgets, GAO predicted.

“Until the services’ reset strategies target shortages of equipment needed to equip units preparing for deployment and give priority to those units over longer-term needs, the Army and Marine Corps will be unable to minimize operational risk by ensuring the needs of deploying units can be met,” Solis wrote in the report. GAO recommended that the secretary of defense improve the way DoD reports its obligations and expenditures within the procurement accounts and assess the services’ approaches to equipment reset to ensure that their priorities address equipment shortages in the near term to equip units preparing for deployment. To that end, GAO is also pushing the secretary of defense to amend the FMR to require more detailed accounting of obligations and expenditures within the procurement accounts for equipment reset.

“Until the Army and Marine Corps are required to report the obligation and expenditure of funds appropriated for reset in the procurement accounts at a more detailed level, Congress will not have the visibility it needs to exercise effective oversight and to determine if the amount of funding appropriated for reset has been most appropriately used for the purposes intended,” Solis wrote.

“The Army and Marine Corps cannot be assured that their reset implementation strategies will sustain equipment availability for deployed units as well as units preparing for deployment to Iraq and Afghanistan while meeting ongoing operational requirements because neither the Army’s nor the Marine Corps’ reset implementation strategies target shortages of available equipment and prioritize equipment needs of units preparing for deployment over longer-term modernization goals,” Solis adds in the report.

The DoD disagrees with GAO’s findings. Officials argue formalizing procedures by amending the FMR would be “unwieldy and cost prohibitive” and that creating additional line items for each procurement program would be complex and duplicate existing reports.

However, Jack Bell, deputy undersecretary of defense for logistics and materiel readiness, said the DoD will continue to stress to the military services the need to account for obligations and expenditures in an accurate and timely manner.

“While it is relatively simple to create an operation and maintenance sub-activity group to account for the maintenance portion of reset, to handle the procurement appropriations in the same manner would not be informative,” Bell wrote to Solis in the DoD response to the GAO report. “Procurement accounts are considerable more complex. “The Army and Marine Corps have demonstrated to the GAO that they currently track reset within the procurement accounts, but to formalize these procedures at the DoD level through amending the Financial Management Regulation would be unwieldy and cost prohibitive.” However, Bell told GAO that the military services are pursuing an alternative accounting method with the Defense Finance and Accounting Service (DFAS) that could increase the visibility within the procurement account, but not at the individual item level.

Bell also stressed that there was no need for GAO to recommend that the secretary of Defense direct senior Army and Marine Corps leaders to assess their service’s approaches to equipment reset. This is already happening, he said.

“The Army’s overall equipping strategy, of which reset is a component, along with its prioritization scheme (the Dynamic Army Resource Priority List) addresses equipment shortages in the near term to equip units that are deployed or deploying. Equipping and reset strategies have been effective for the past five years," Bell said. "The Marine Corps employs a documented, standardized, and flexible reset strategy designed to meet both current operational requirements and long-term reconstruction strategies." ♦