DCCUi~RT RBSODN)

07930 - rC3428535J

U.S. Military Equipment Preporitioned in lurope: SignificantImprovements Made but Some Pro.e*ms Remain. LCD-78-431A;B-146896, December 5, 1978. 46 pp. + 2 appendices (3 pp.),

Report to Harold Brown, Secretary, Department of Defense; byRichard W. Gutsann, Director, Logistics and communications Div.Unclassified version of a secret report.

Issue Area: Balance of Var Reservewas, Preositioned Stocks, andthe Industrial Base. (806).

contact: Logistics and Communications Div.Budqet PUnction= National Defense: Department of Defense -

military (except procurement 8 contracts) (051).Orqanization Concerned: Departsent of the Army.Conaressional Relevance: House Committee on Armed Services;

Senate Committee on Armed Services.

The Army stores large quantities of equipment in Europefor use in an exergency by troops deployed froa the UnitedStates by air. The equipment is stored under a concept known asprepositioned equipment configured to unit sets (ECICUS} whichmeans that each U.S.-based unit's equipment is stored as a setat a particular site to which the unit would deploy, Thisequipment is kept combat ready through lcng-ters storage incontrolled-humidity warehouses and through neriodic maintenancedesigqued to keep deterioration to a minisum.Findinqs/Conclusions: The Army has made considerable improvementin the management of the PONCUS concept since it beganintensifying its effort in January 1977. Although prepositionedequipment shortages have been greatly reduced, some sLirtagesremain. There are also difficulties with updating authcrizationsof repair parts to reflect the type cf equipment stored and thedensities of the needed iteas. Equipment maintenance hasimproved considerably because of the successful completion ofthe annual maintenance programs, and more and bettercontrolled-huaidity storage facilities have protected theequipment, reducing corrosion problems. Although largema*intenance backlogs no longer exist, better maintenance datacollection efforts are needed to accurately forecast work forcerequirements. Accountability of sajor end items has improvedthrough more frequent physical inventories and a sore accurateequipment locator system. Accountability of components and poorinventory record information remain problems. Recoamendations:The Secretary of the Army should: establish a more realistictest under simulated contingency conditions of annual deploymentof troops assigned prepositioned equisaent, identify and obtainrepair parts to support wartime needs of the assigned units,closely monitor the cyclic maintenance program to ensure that itstays on schedule, provide protection for combat supportequipment stored outside in Germany, develop and coordinateavailable management information to Frovide required visibility

over prepositioned equipment assetsp assure that inventcrieswhich identify shortages and requisitioning needs are properlymade and recorded, and improve the new readiness reportingsystem by showing the ready condition cf a total weapons systemrather than the end item and components separately. (RRe)

REPORT BY 1TE U S

General Accounting Office

U.S. Military EquipmentPrepositioned In Europe--Significant Improvements MadeBut Some Problems RemainThe Army stores large quantities of equipment in Europe for use in an emergency bytroops deployed from the United States byair, The equipment is stored under a conceptreferred to as "prepositioned equipment con-figured to unit sets." Each U.S.-based unit'sequipment is to be stored as a set at the par-ticular site to which the unit would deploy.Four different projects, including equipmentfor three divisions and related support units,are involved in the program. As of July 1978,the value of equipment authorized for storagewas slightly over $1 billion.

GAO has reviewed the prepositioned equipment in Europe programs three times in re-cent years, and th;s report shows that theArmy has made progress in overcoming earlierproblems. Shortages o[ prepositioned equipment have been reduced and other improve-ments achieved; but some shortages still exist.

DS7

'ifl k-': : o':~ '.'7:,:: ";ECE.MBE.R L CD-78431A

~'CCoUS'T\" DECEMBER 5, 1978

(S%({RS ~ UNITED STATES GENERAL ACCOUNTING OFFICEI/E~o~~S~ ~ WASHINGTON, D.C. 20548

LOGISTICS AND COMMUNICATIONSDIVISIONI

B-1 46 896

The Honorable Harold BrownThe Secretary of Defense

Dear Mr. Secretary:

This is the unclassified version of our SECRET report(LCD-78-431). It points out that the Army has made sig-nificant improvements in its management of prepositionedequipment since GAC last reported serious problems inthis area (LCD-76-441, Julv 12, 1976). However, someproblems remain that need immediate attention.

Although we did not request written comments fromthe Department on this report, we met with Army officialson October 12, 1978; obtained their oral comments; andhave considered them, where appropriate, in preparingthe ieport. The Army representatives thought highlyof the report and indicated that action had been plannedor taken on our recommendations.

We are sending copies of this report to the Director,Office of Management and Budget; the Secretary of the Army;and the Chairmen, House and Senate Committees on Appropria-tions and Armed Services, House Committee on GovernmentOperations, and Senate Committee on Governmental Affairs.Copies of this version will be available to other interestedparties who request them.

Sincerely yours,

R. W. GutmannDirector

GENERAL ACCOUNTING OFFICE U.S. MILITARY EQUIPMENTREPORT TO THE PREPOSITIONEn IN EUROPE--SECRETARY OF DEFENSE SIGNIFICANT IMPROVEMENTS MADE

BUT SOME PROBLEMS REMAIN

The Army has made considerable improvementST

The Army has made considerable improvementin the management of the prepositionedequipment program in Europe since it beganintensifying its efforts in January 1977.

GAO reviewed the management of this programin 1971-72 and again in 1975-76. Its re-ports concluded that the Army units withequipment prepositioned could not performtheir azsigned missions within the requiredtime because of equipment shortages, main-tenance problems, and related shortcom-ings. 1/ (See pp. 2 and 3.)

GAO evaluated the cur-ent status of theprogram in Germany to see whether theseproblems had been resolved. This wasparticularly important in light of thePresident's recent proposal to preposi-tion additional equipment in Europe.

The Army has made substantial progressin overcoming many problems highlightedin earlier reports. ?repositioned equip-ment shortages have been greatly reduced,although some shortages remain. (Seepp. 10 to 12.)

Also, there are difficulties with updat-ing authorizations of repair parts to re-flect the type of equipment stored andthe densities of the needed items. Inone case, about 45 different types of

1/"Ptoblems with U.S. Military EquipmentPrepositioned in Europe" (B-146896,Mar. 9, 1973) and "Continuing Problemswith U.S. Equipment Prepositioned inEurope" (LCD-76-441, July 12, 1976).

LCD-78-431ATIM[Se'. Upon rmoval, the reportcower aate should be noted hareon.

repair parts for organizational mainte-nance were stocked for ambulances thathad been replaced by another model. Stocklists were never adjusted, and the unit'wassent on a deployment exercise without partsto repair its current 36 ambulances. (Seepp. 14 and 15.)

Equipment maintenance has improved consider-ably, due largely to successful completionof the annual maintenance programs. This,in turn, resulted from avoiding larqgdiversion- of the maintenance work torceto noncyclic maintenance tasks and fromcivilianizing the work force. For fiscalyear 1977 anid the first 8 months of fis-cal year 19i8, the maintenance programwas ahead of schedule. (See pp. 19 to 25.)

More and better controlled-humiditystorage facilities have protected theequipment, reducing corrosion problems.Equipment stored at three sites was ingenerally good condition. The Army has79 controlled-humidity warehouses in usein Germany, compared to 57 at the time ofGAO's last report. Some expensive newequipment is still store6 outside in Ger-many. (See pp. 27 and 28.)

Maintenance facility problems--shortageof space, ill-equipped shops, and someunheated facilities--remain essentiallythe same as last reported. North AtlanticTreaty Organization infrastructure fund-ing is being sought to upgrade the facili-ties. The Army estimated it needs $43million to bring maintenance facilitiesin Germany up to standards. (See p. 31.)

Although the large maintenance backlogsof past cycles no longer exist and thecyclic maintenance program is on schedule,the Army still needs sufficiently reliabledata t. determine its total work force re-quirements. Efforts are needed to provide

ii

better Mnintenance data collection foraccurately forecasting work force require-ments. (See pp. 34 to 36.)

The Army has continued to improve account-ability of major end items through morefrequent physical inventories and a moreaccurate equipment locator system. Intesting the accuracy of 82 selected majorend items, GAO found that all the items werein the locations designated on storage sitelocation charts.

However, accountability of the componentsof sets, kits, and basic issue items andpoor inventory record information remainproblems. During the last inventory com-pleted in April 1978, for example, Armyofficials in Europe were unable to provideinformation on shortages or excesses dis-closed or, in the case of shortages,whether needed equipment had been requisi-tioned or received. (.pee pp. 39 to 41.)

The new readiness reporting system shouldsolve some of the past problems. However,this system should link primary end items,such as tanks, with their armament, firecontrol, or communications subsystems tobe reported as an overall system. With-out all the components and subsystemsfully operable, the end items cannot beas effective as they could be. (Seepp. 43 to 46.)

Recent exercises for testing the Army'sability to deploy under the prepositionedequipment concept have been considerablymore realistic than those GAO reportedon previously. However, the exerciseshave not included a key element of thecontingency mission--simulating actualwarning time conditions during the exer-cises. (See pp. 8 and 9.)

RECOMMENDATIONS

The Secretary of Defense should directthe Secretary of the Army to:

Tear Sheet iiiiii

--Establish a more realistic test undersimulated contingency conditions ofannual deployment of troops assignedprepositioned equipment. (See p. 9.)

--Identify and obtain the repair partsto support wartime needs of units assignedprepositioned equipment. (See p. 18.)

-- Closely monitor the cyclic maintenanceprogram to make sure it stays on schedule.(See p. 26.)

-- Provide, at least temporarily, protectionfor combat support equipment stored out-side in Germany. (See p. 31.)

-- Develop and coordinate available manage-ment information to provide the requiredvisibility over prepositioned equipmentassets, particularly for manpower andmaintenance management and equipmentreadiness purioses. (See p. 36.)

-- Assure that inventories which identifyshortages and requisitioning needs areproperly made and recorded. (See p. 42,)

--Improve the new readiness reportingsystem by showing the ready conditionof a total weapons system, such as atank, rather than the end item andcomponents separately. (See p. 46.)

AGENCY COMMENTS AND GAO EVALUATION

GAO discussed the matters in this reportwith Army officials on October 12, 1978,obtained their oral comments, and con-sidered their comments in preparing it.The officials concurred with the recom-mendations and have taken or plannedactions to implement them.

The Army's actions on the recommendations,if Properly carried out, should furtherimprove the prepositioned equioment pro-gram in Germany. GAO plans to follow upon these matters to assess the Army'sprogress in implementing program improve-ments.

iv

Con tents

DIGEST

CHAPTER

1 INTRODUCTION 1Scope of review 4

2 MANAGEMENT OF THE POMCUS PROGRAM:WHERE IT STANDS TODAY 6

Future developments 7Recommendation 9

3 ON-HAND STATUS OF PREPOSITIONED EQUIP-MENT, REPAIR PARTS, AND AMMUNITION 10Combat equipment shortages have

been reduced, but significantshortages remain 10

Repair parts management needsimprovement 14

Conventional ammunition theaterstorage capacity is inadequate 16

Conclusions 18Recommendation 18

4 CONDITION OF AVAILABLE EQUIPMENT 19Equipment serviceability criteria 19The cyclic maintenance program

is on schedule 19Equipment camouflage program 25Jonclusions 25Recommendation 26

5 STORAGE AND MAINTENANCE FACILITIES 27Condition and use of controlled-

humidity warehouses 27Maintenance facility improvements

are planned 31Conclusions 31Recommendation 31

6 POMCUS SUPPORT PERSONNEL 32Civilianization of support personnel 32Adequacy of CFGE's work force 33Conclusions 36Recommendation 36

Page

CHAPTER

7 INVENTORY ACCOUNTABIIITY akD CONTROL J7Physical inventories are being made 37Accouatability and control of some

components of sets and kits arestill a problem 39

ZEGE's equipment locator systoehas improved 41

Conclusions 41Recommendation 42

8 READINESS REPORTING 43Implementation of the new readinessreporting system 43

Improvements and weaknesses in thenew unit status reporting system 44

Conclusions 46Recommendation 46

APPENDIX

I Equipment on-hand ratings of REFORGERand 2 + 10 units as of June 30, 1978 47

II Shortages as of June 30, 1978, to befilled before all REFORGER and 2 + 10combat units can be combat ready(equipment on hand) 48

ABBREVIATIONS

BII basic issue itemCEGE Combat Equipment Group, EuropeGAO General Accounting OfficeMRLOGAEUR minimum required logistics augmentation,

EuropeNATO North Atlantic Treaty OrganizationPOMCUS prepositioned equipment configured to

unit setsREFORGER return of forces to Germany2 + 10 2 divisions plus support unitsUSAREUR United States Army, Europe

CHAPTER 1

INTRODUCTION

The Army stores large quantities of equipment in Europefor use in an emergency by troops deployed from the UnitedStates by air. Tt equipment is stored under a conceptreferred to as prepositioned equipment configured to unitsets (POMCUS). This means that each U.S.-based unit's equip-ment is stcred as a set at the particular site to which theunit would deploy. The equipment is kept combat .eady through(1) long-term storage in controlled-humidity warehouses and(2) periodic maintenance, designed to keep deterioration toa minimum.

In June 1978, 1,054 lines of equipmenl valued at about$1 billion were authorized for P3MCUS stockage. Equipment onhand totaled | deleted leaving a shortageof about I deleted IThe major operationalprojects for which the Army has prepositioned equipment are(1) the 2 + 10 program (two divisions plus support units),(2) REFORGER (return of forces to Germany), (3) MRLOGAEUR(minimum required logistics augmentation, Europe), and(4) certain medical projects.

The Joint Chiefs of Staff and the U.S. Commander inChief, Europe, acted to preposition equipment for the 2 + 10program during the Berlin Crisis in 1961 to increase thespeed at which the 7th Army could be reinforced from theUnited States and to reduce the need for transportation re-sources.

deleted

In 1968 the Army moved selected combat and combat supportunits from Germany to the United States to improve the U.S.balance-of-payments position. These forces, called REFORGERunits, remain committed to the North Atlantic Treaty Organi-zation (NATO). The commitment is formalized in a multi-lateral agreement, which also stipulates that certain of theseforces will redeploy to Europe annually to conduct field exer-cises. REFORGER forces consist of the 1st Infantry Division(minus one brigade permanently stationed in Europe), the3d Armored Cavalry Regiment, and other units.

MRLOGAEUR is a project to provide a minimum of equipmentfor lines of communications needed to support U.S. forcesdeploying to Europe in an emergency. This project replacesthe old line of communication/port facilities projects.Under the MRLOGAEUR concept, much of the support of U.S.forces in a contingency would be provided by host countriesthrough bilateral agreements. The medical projects provideequipment for use by certain medical units.

The U.S. Army Combat Equipment Group, Europe (CEGE), isresponsible for storing, maintaining, and issuing POMCUSequipment prepositioned in Europe for the four projects dis-cussed above. The equipment is stored at various Europaanlocations--eight of which are in the NATO Central Army 1roupRegion--a.d much of the equipment is in humidity-controlledwarehouses. (See the map, p. 5, for the general location ofstorage sites in Germany.)

Other U.S. Army, Europe (USAREUR), commands are respon-sible for other logistics functions relating to POMCUS.These functions include (1) transporting troops from air-fields to storage locations in an emergency, (2) providingbulk fuels for vehicles at storage sites, and (3) managingand storing conventional ammunition supplies for POMCUS units.

We originally reviewed the POMCUS program in 1971-72.Our report "Problems with U.S. Military Equipment Preposi-tioned in Europe" (B-146896, Mar. 9, 1973) concluded thatthe Army units in the POMCUS program could not perform theirassigned missions in the required time because some of theauthorized equipment was not prepositioned and much of theavailable equipment was inoperable.

We again reviewed the POMCUS program in 1975-76. Inthat report, "Continuing Problems with U.S. Military Equip-ment Prepositioned in Europe" (LCD-76-441, July 12, 1976),we concluded that it was still questionable whether the Armycould effectively accomplish the missions assigned under thePOMCUS concept and outlined in existing operational war plans.We reported that many improvements had been made since the1973 report but that many deficiencies remained.

-- The condition of equipment available in POMCUS stockshad improved considerably, but some equipment storedoutside was in particularly bad condition since ithad not been maintained according to schedule.

2

-- The number of maintenance personnel had declined, andspecial projects diverted maintenance personnel fromdoing the required equipment maintenance.

deleted

--Deficiencies in equipment readiness reporting criteriaprevented an accurate presentation of equipment status.

-- Shortages existed in some types of repair parts andammunition.

--Improvements had been made in accountability and phy-sical control of POMCUS stocks, but some problemsremained--for example, CEGE had no effective account-ing control over components of kits and sets.

--The equipment locator system was quite inaccurate.

-- POMCUS storage and maintenance facilities had beenimproved; however, there were some facility mainte-nance problems, and storage facilities were not beingused as effectively as possible. Also, maintenancefacilities were regarded by the Army as substandard.

We also reported that response times in operationalplans for Europe appeared unrealistic for some U.S.-basedforces, since critical POMCUS equipment shortages would forcedeploying units to bring their equipment with them, probablyby sea. Also, the equipment held by deploying units did notmeet accepted criteria for serviceability and reliability.Thus, it would have to be repaired before it could be shipped.Finally, the annual deployment of certain REFORGER units toGermany for training and exercising POMCUS equipment was notdone in a manner that realistically tested redeployment underemergency conditions.

On December 29, 1976, the Assistant Secretary of theArmy (Installations and Lc-istics) stated that Army officialsgenerally agreed with our report recommendations. He saidthe critical POMCUS proDlems had been recognized and werereceiving top management attention within the Departments ofthe Army and Defense.

3

On August 1.6, 1977, the Secretary of Defense orderedthat actions be taken to ensure that, by mid-1978, all combatunits of the REFORGER and 2 + 10 package could be moved toEurope, issued their equipment, and prepared to begin movingto their battle positions within delete of adecision to reinforce Europe. This was done to enhance theU.S. reinforcement capability in Europe and ensure that theWarsaw Pact's mobilization and reinforcement rate could notsignificantly outstrip NATO's.

SCOPE OF REVIEW

We evaluated the status of the POMCUS program in Germanyto see whether the problems identified previously had beenresolved. We placed particular emphasis on the status ofthe reconstitution of POMCUS stocks and the condition of theavailable equipment. (See chs. 3 and 4.) This was especiallyimportant in light of the continuing problems with the POMCUSprogram and the President's recent proposal to increase thesize of the program by placing stocks in NATO's Northern ArmyGroup Region. (See p. 5.)

We reviewed records relating to the prepositioned stocksof equipment, repair parts, and conventional ammunition inEurope. We made physical inspections and inventories,observed maintenance of equipment, and spoke with personnelresponsible for managing and maintaining the prepositionedstocks. This work was done from February to July 1978.

We discussed the matters in this report with Army offi-cials on October 12, 1978, obtained their oral comments, andconsidered their comments in preparing it. The officialsfully concurred in the recommendations set forth in each ofthe following chapters, and have taken or planned actionsto implement them. Their reaction to this report was highlyfavorable. The Army's actions on our recommendations, ifproperly implemented, should further improve the preposi-tioned equipment program in Germany.

4

Figure 1.Nato's Central Regional (Showing Corps

Sectors And Storage Sites)

/EEA CTI OGERMAN¥.

f.orcs in esRMAN G*enerlin I

t__5s:··:i DRITI5SH

iiiii , N C E 0 rWESTA N EE

GE RMAN Mun.1hO

GER MANY D A.U ST

GENERAL LOCATION OF CURRENT SITES INWEST-GERMANY.

SOURCE: Adapted from Richard Lawrence and Jeffrey Record, U.S. Force Structure in NATO (Washington, D.C.:

-he Brookings Institution, 1974). p. 31 and also from U.S. Army materials.

2/_NORTHAG (Northern Army Group) and CENTAG (Central Army Group) are the two subdivisions of NATO

forces in West Germany.

CHAPTER 2

MANAGEMENT OF THE POMCUS PROGRAM:

WHERE IT STANDS TODAY

The POMCUS concept has been an integral part of U.S.defense planning for a NATO contingency. its objective isto give the United States the capability to quickly reinforceNATO forces during mobilization in Europe. The Department ofDefensa maintains that prepositioning equipment is more costeffective than stationing the forces in Europe during peace-time or providing sufficient airlift to deploy both troops andequipment from the United States during rapid mobilization.

For the POMCUS concept to be viable, therefore, the Armyneeded to give the program top management attention and devotea maximum effort to restoring the POMCUS units to the highestpossible readiness condition as rapidly as resources becameavailable. The Army has greatly improved the management ofPOMCLS since it began intensifying its efforts in January1977. Particularly, it has reduced equipment shortages andeliminated the equipment maintenance backlog. However, largeequipment shortages remain, and some problems still needattention. (See chs. 3 to 8.)

For a prepositioning concept to be successful, severalkey issues need to be fully addressed.

-- Maintenance programs for equipment must be effectiveso that equipment availability is maximized. Equipmentmust be periodically removed from storage, tested,repaired as needed, inventoried, preserved, and placedback in storage. With the current 4-year maintenancecycle, the elimination of substantial maintenance workbacklogs, and an adequate number of personnel, theArmy has improved the condition of POMCUS stocks.

-- Adequate storage is required to keep equipment fromdeteriorating. The Army determined that POMCUSequipment can best be stored in controlled-humiditvwarehouses. The Army has indicated that all weather-sensitive items (all equipment other than trailers)except outsized equipment benefit from such storage.The POMCUS concept assumes that all the appropriateequipment should be stored in a combat-ready conditionfor several years. Past warehouse deficiencies havebeen corrected in many cases, and storage has greatlyimproved.

6

-- POMCUS units, once they miobilize, must draw theirequipment and move forward to the battle area asquickly as possible. How long it would take to issuethis equipment under emergency conditions is question-able because deployment and issue procedures havenever been tested.

-- To provide the required visibility over POMCUS stocksfor inventories of authorized and on-hand equipment,readiness reporting, and maintenance and manpower man-agement purposes, better data collection is necessary.Without required information and realistic data, thetrue ready condition of POMCUS assets is difficult toassess.

FUTURE DEVELOPMENTS

deleted

As a way of improving U.S. forces, the President hasproposed to expand the use of prepositioned equipment inEurope by several Army divisions. This additional equipmentwould tremendously increase the size of the POMCUS program.The equipment, estimated to cost between $4 and $6 billion,if purchased new, is supposed to be in place by the end of1982 in the northern region |

deleted

We did not extensively review Army plans for increasingthe amount of prepositioned equipment in Europe. This willbe covered in a future review. However, while assessing thecurrent status of the program, we noted certain factors affect-ing the speed with which the United States can increase theamount of prepositioned equipment in Europe and the prioritythe United States should give tc such a program. One factoris the need to reasonably assure, through exercises, that theUnited States can mobilize and deploy the equivalent of aboutseven Army divisions in Europu with short warning and to

7

have these forces ready for combat under currently perceivedthreat conditions.

Realism in testing POMCUS concept

According to the Defense Department, the POMCUS conceptprovides the U.S. Army with the capability to quickly rein-force Europe during a contingency. The United States annuallypractices deployment of U.S. dual-based forces (REFORGER) aspart of the NATO exercises in Europe. These exercises,though, have never been carried out under simulated contin-gency conditions of limited warning and required speed.

Most military strategists maintain that, to be effec-tive under the POMCUS concept, deploying forces must receivesufficient warning and deploy rapidly. They believe that,otherwise, the POMCUS concept loses credibility becauseequipment in the warehouses could be destroyed during theearly stages of the conflict before troops arrive in Europeand disperse wiLh the equipment to the battle area. U.S.-based forces and their equipment are required in Europe atthe outbreak of hostilities for NATO to meet the perceivedWarsaw Pact threat.

Units in the continental United States that have par-ticipated in the REFORGER exercise have had considerableadvance warning before deploying, and CEGE has had enoughtime to specifically prepare the equipment for the exercise.Also, under contingency conditions, the U.S. Army had plannedfor deleted of warning before the outbreak ofhostilities.

Now, Army planners believe they will have considerablyless warning time--possibly_ deleted - or less--and are using the REFORGER exercise to test the POMCUS conceptunder more stringent deployment conditions. However, U.S.-based units and CEGE still receive much more advanced warningabout the exercise than would be expected under normal NATOalert procedures.

Considering the size, cost, and risk involved in thePOMCUS concept, we believe the time is right for a more real-istic deployment test. As a start, a small test of deploy-ment under contingency conditions could and should be made,within the larger REFORGER exercise, to provide planners withsome lessons about an actual contingency deployment.

8

The Defense Department included such a test in itsREFORGER 79 redeployment exercise. It should continue thesetests and develop plans for overcoming any identified deploy-ment problems.

RECOMMENDATION

We recommend that the Secretary of Defense direct theSecretary of the Army to establish a more realistic testunder simulated contingency conditions of POMCUS unit deploy-ment to provide greater assurance that the program is or canbe a viable approach to offsetting the perceived short-warning threat posed by the Warsaw Pact.

9

CHAPTER 3

ON-HAND STATUS OF PREPOSITIONED

EQUIPMENT, REPAIR PARTS, AND AMMUNITION

Although POMCUS equipment shortages have been reducedsince our last report, significant shortages remain. RecentArmy efforts have increased equipment on hand for high-priority POMCUS units--REFORGER and 2 + 10.

deletedr The Army has also announced plans

to move equipment into MRLOGAEUR and medical projects tomake these units combat readyL deltedIn June 1978 only about[ deleted percent of theMRLOGAEUR and medical units had enough equipment to be ratedcombat ready.

Repair parts to support POMCUS units remain a significantproblem as little improvement has been made since our lastreport. The most serious deficiency is the failure to updateauthorizations to reflect the type of equipment stored andthe densities of the needed items. No projected date hasbeen set for correcting the problem.

Theaterwide conventional ammunition stocks, which sup-port POMCUS unit requirements, still have significant short-ages primarily because of the critical shortage of storagefacilities in Europe. For the storage facilities, a

deleted date is projected.

COMBAT EQUIPMENT SHORTAGES HAVE BEENREDUCED, BUT SIGNIFICANT SHORTAGES REMAIN

At the time of our last review, the POMCUS program wasshort nearly half of its authorized equipment. In December1975 POMCUS had equipment shortages totaling $373.9 million.

10

Percent ofauthorized

Project Authorized On hand Shortage on hand

------------ (millions)-----------

REFORGER $325.9 $204.9 $121.0 632 + 10 360.3 177.4 182.9 49MRLOGAEUR 76.5 20.4 56.1 27Medical 15.7 1.8 13.9 11

Total $778.4 $404.5 $373.9 52

Since our July 1976 report, the Army has taken majoractions to increase the on-hand quantities of POMCUS equip-ment. As shown below, POMCUS shortages as of June 1978 wereonly{ deleted 1/

Percent ofauthorized

Project Authorized On hand Shortage on hand

------------- (millions)-----------

REFORGER2 + 10MRLGGAEUR deletedMedical

Total _

At the time of the Secretary's August 1977 order to placeincreased emphasis on POMCUS, onlyl deleted I percentof the REFORGER and 2 + 10 units had enough equipment or handto be rated combat ready (C-l). 2/ To meet the Secretary'sgoal, the Army concluded that it would need to fill at least

l/Values reflect cost increases and changes in authorizedquantities since our last report.

2/ 1

deleted

2--/i~~~~~1

I deleted __ ByJune 30, 1978, the Army had succeeded !.n filling I deleted _

however, on a unit basis,deleted

The Army is continuing to emphasize filling POMCUS.It hopes to fill all POMCUS projects to =

deleted iand to fill all POMCUS . 3-ts todeleted

Remaining shortages

Although the improvement in the readiness of theseunits is noteworthy, a number of shortages remain to befilled

deleted

Appendix IIcontains a list of the shortage lines, including such equip-ment as d!p_ - deletedUSAREUR does not expect all the shortages to be filled inthe near future. For example, they do not expectl

deleted to be available untildeleted

Sources of supply to fillequipment shortages

Equipment brought into REFORGER and 2 + 10 units betweenMarch and June 1978 (the time period of this review) camefrom a number of sources in Europe and in the United States.The following list shows the -irce of supply for equipmentreceived during this period.

12

Continental United States

-- National Inventory Control Points (includes both newand rebuilt equipment).

-- Withdrawals from troop units, including the Army Re-serves and National Guard.

European theater

-- Depot stocks.

--Redistribution within POMCUS projects.

-- Theater war reserves. 1/

Transfers from theater warreserve stocks to POMCUS

POMCUS gives the Army the ability to equip deployingforces, and theater war reserves give it the ability to sus-tain deployed forces in combat. Although POMCUS requirementshave a higher distribution priority than theater war reservestocks, items for which shortages existed in POMCUS were onhand in these reserves. The Army approved the transfer ofthese stocks to meet the higher POMCUS requirements. Thefollowing table summarizes the extent of such transfersfrom July 1976 through April 1978.

l/Prepositioned items considered mission essential to supportU.S. forces in combat until resupply from the United Statescan be established.

13

Number NumberCommodity/eguipment type of lines of items

deleted

deleted

REPAIR PARTS MANAGEMENTNEEDS IMPROVEMENT

Two levels of repair parts stockage are authorized tosupport POMCUS units: (1) prescribed load lists, which sup-port the needs of a unit at the organizational level, and(2) authorized stockage lists, which support needs at highermaintenance levels.

At the time of our earlier reviews, repair parts stockswere not based on current authorizations and included out-dated, obsolete, or unneeded items. We recommended that theSecretary of the Army develop a system for computing and up-dating repair parts stock lists. In December 1976 the As-sistant Secretary of the Army (Installations and Logistics)advised us that action was underway to match repair partsneeds with equipment authorizations. This program was tobe completed by March 1977.

14

Our current work indicates that very little improvementhas been made in the type and densities of repair parts au-t|-orized and stocked to support POMCUS equipment. Our dis-

ions with CEGE supply representatives revealed that,.pt for up-to-date REFORGER lists:

--CFGE officials do not know precisely how many pre-scribed load lists they Pre supposed to support.

--Some existing lists are no longer authorized, andothers have not been updated since they were receiveda number of years ago.

-- CEGE does not have updated authorization& for non-divisional authorized stockage/prescribed load liststocks; for example, a recent comparison of CEGE'sand the U.S.-based unit's lists of about 1,300 linesauthorized for an engineer battalion's authorizedstockage list showed a match of only 70 lines.

Reports for the 1977 REFORGER exercise indicate thatrepair parts were issued at peacetime instead of wartimestock levels. The following examples highlight unsatisfac-tory repair parts support to POMCUS units during REFORGERexercises. The reports indicate that repair parts stocks:

--Did not provide the type and quantity of repair partsrequired and thus were used very little.

--Were inadequate, mismatched, and not issued in suffi-cient quantities to cover requirements for fast-moving, high-density items.

--Were out of line with end item authorizations and on-hand densities of equipment. In one case about45 lines of a prescribed load list were stocked forone type of ambulance that had been replaced by an-other model. Stock lists were never adjusted, andthe unit was sent to the field without parts to repairits current 36 ambulances.

The ultimate effect of these problems is that much moretime is required to repair the equipment because parts werenot available in the quantities needed. CEGE's acting com-mander said action is underway to improve the method of ac-counting for repair part authorizations to eliminate obsoleteitems from files and add new items that will be ordered tosupport requirements.

15

CONVENTIONAL AMMUNITION THEATERSTORAGE CAPACITY IS INADEQUATE

Since our last report, requirements for prepositionedammunition in Europe have increased

l deleted hIis adjustmentwas based primarily on wartime experience obtained during the1973 Middle East War.

USAREUR is authorized to preposition ammunition for usein training and as unit basi: load, operating stocks, and warreserves. Over 90 percent of the authorized quantities areearmarked as war reserve stocks. The following chart depictsthe status of theater ammunition stocks as of March 1978.

Shortage asa percent of

Authorized On hand Shortage authorized

deleted

The authorized quantities may increase since troops areexpected to arrive in Europe earlier than previously planned.This could result in further shortages because more troopswill be using ammunition for a longer period. Since POMCUSammunition requirements are part of total'European theaterreauirements, POMCUS units would be affected by any shortage.These shortages are attributed primarily to insufficientammunition in storage in Europe.

Storage capacity shortfall

The shortages result primarily from insufficient theaterstorage capacity.

deleted

Real estate must be acquired for some ofthe storage sites, and funding is expected to come from bothNATO infrastructure and U.S. military construction funds.

As of February 1978 the following ammunition shortageswere either not on requisition or on only limited requisi-tion due to a lack of theater storage space in Europe.

16

Rounds Rounds PercentageType of ammunition authorized short short

8-inch howitzer:Prop Chg M2Pros HEProj ICM

1551.,m howitzer:Proj -Ch M3Prop Chg M4Prop Chg M119Proj HE

M16 rifle: deleted5.56mm tracer5.56mm ball

Cal .50 machine gun:AP/API-T linked

Army inventory shortages

As of February 1978 the following types of ammunitiondeleted I

Rounds Rounds PercentageType of ammunition authorized short short

deleted

17

CONCLUSIONS

Having enough combat-ready equipment stored in Europe tooutfit the units scheduled to deploy in an emergency is theobjective of the POMCUS concept. Further, enough repair partsmust be available to support the operation of the equipment,and enough ammunition must be available to enable units toeffectively carry out their mission.

The Army has made progress in its efforts to completelyreconstitute current POMCUS stocks, and it should continuework in this area. However, it has done little to improvethe status of repair parts stocks needed to support POMCUSunits' equipment during wartime. This problem has existedin some form since 1971. We believe the Army should establisha deadline for upgrading repair parts stocks and devote theresources necessary to accomplish the task, as it is doing toreduce equipment shortages. Further

deleted

POMCUS units would be affected by these shortages. Sinceaction is planned to reduce the shortages, we are not recom-mending any further action at this time.

RECOMMENDATION

We recommend that the Secretary of Defense direct theSecretary of the Army to identify repair parts needs andobtain enough of the proper stocks to support POMCUS units'wartime needs.

18

CHAPTER 4

CONDITION OF AVAILABLE EQUIPMENT

During our last review, we found that, except for badlydeteriorated vehicles in open storag:, the overall conditionof POMCUS equipment had improved. Our current review in-dicated that the Army has continued to improve the conditionof POMCUS equipment. However, the equipment still has notbeen painted with camouflage patterns to match the equipmentused by active units in Europe.

EQUIPMENT SERVICEABILITY CRITERIA

The POMCUS concept establishes the need for storingequipment in combat-ready condition for issue within aminimum reaction time. USAREUR considers to be combat ready(1) all POMCUS stocks in storage and (2) those POMCUS stocksin maintenance that meet the following criteria:

1. Equipment which is free from deficiencies that wouldlimit the reliable periormance of its primarymission forl deleted lin operation.

2. Equipment which requires only organizational levelmaintenance skills and repair parts authorized forstockage at the organizational level to make itready for issue. The organizational level staff-hours to do repairs cannot exceed prescribedlimits. For example, 6 hours are authorized fortanks while 5 hours are allowed for repair ofartillery weapons.

THE CYCLIC MAINTENANCEPROGRAM IS ON SCHEDULE

USAREUR established a cyclic maintenance program inMarch 1973 to insure that stored equipment was periodicallyremoved from storage, inspected, functionally tested, re-paired as necessary, inventoried, preserved, and placed

19

back in storage. 1/ At the time of our last review, noannual maintenance program had been completed since thecyclic maintenance program was established. Failure tocomplete the cyclic maintenance programs was attributablein part to additional maintenance workloads resulting fromapproved special projects such asl

deletedand (2) preparation of equipment for issue

to Brigade 75.

At the time of our last report, maintenance cycles of5 years for equipment stored in controlled-humidity ware-houses and 2-1/2 years for other equipment had been estab-lished. Since that time the cycles have arbitrarily beenchanged to 4 and 2 years, respectively, to reduce the largeamount of equipment that was in poor condition at the endof the longer cycles. As POMCUS equipment is maintainedmore frequently, the overall condition of POMCUS stocksshould improve.

The results of CEGE's fiscal year 1977 cyclic main-tenance program are shown in the following table.

Number of Number ofpieces pieces Percent

programed completed completed Carryover

Maintenance 21,320 19,603 92 1,717Preservation 21,320 17,298 81 4,022

According to CEGE officials, the primary reasons for carry-over into the fiscal year 1978 cyclic maintenance programrelate to equipment (1) awaiting parts for repairs, (2)awaiting inspection, or (3) being at higher level main-tenance for repair. CEGE officials believe that theydo not have enough personnel authorized to adequatelycarry out the equipment preservation task before storingthe equipment.

1/A cyclic maintenance program consists of two distinctfunctions--equipment maintenance and equipment preserva-tion, in that order. In later discussions, the terms"cyclic maintenance" and "CEGE maintenance personnel"generally pertain to both functions. Reference to eitherfunction by itself will be clearly labeled.

20

During the first 8 months of CEGE's fiscal year 1978cyclic maintenance program, maintenance was somewhat aheadof schedule whereas preservation work continued to lag.CEGE's overall goal was to complete 70 percent of the equip-ment in maintenance and preservation by May 15, 1978.

ActualNumber of percentpieces completedprogramed (note a)

Maintenance 27,715 71Preservation 27,490 66

a/As of May 15, 1978.

CEGE officials stated that, assuming the size and fre-quency of REFORGER exercises do not change, the workloadin cyclic maintenance during the fiscal year 1978 programrepresents about the same workload that would be in anaverage annual proqramj deleted

I~~~~~ Based on the pzogressto date in meeting fiscal year 1978 goals, there should belittle carryover into next year's program.

Reasons for improvementin cyclic maintenance

Discussed below are a number of changes related to CEGE'sfacilities, personnel, equipment, and maintenance reauire-ments made since our last review. In our opinion, thesechanges have had a positive impact on CEGE's cyclic mainten-ance workload and have led to a qeneral improvement in thecondition of POMCUS equipment.

No major maintenancemanpower diversions

The following table identifies some of the special proj-ects that in the past diverted CEGE maintenance personnelto tasks other than the cyclic maintenance program. Suchdiversions contributed to CEGE's inability to keep up withcyclic maintenance requirements. Since fiscal year 1976, nomajor diversions have occurred.

21

Divertedman-hours as

Number of a percent ofmaintenance total mainten-

Major Fiscal man-hours ance man-hoursdiversion year diverted for the year

Middle Eastshipments 1975 a/33,000 22

Brigade 75issue 1975 (b) -

Brigade 76issue 1976 74,000 24

a/This figure represents only the man-hours diverted duringfiscal year 1975. l

deleted]however, CEGE did not have man-hour data for

the earlier shipments.

b/CEGE could not identify the man-hours associated with theBrigade 75 issue during fiscal year 1975.

More and betterstorage facilities

At the time of our last review, POMCUS equipment wasstcred in 57 controlled-humidity warehouses in West Germany.Today, there are 79 controlled-humidity facilities inGerma'iy and 4 in Belgium. In addition, CEGE is also using47 general-purpose warehouses to store POMCUS equipment.The additional available warehouse space has given CEGEthe opportunity to store more equipment inside, therebybetter protecting the equipment and reducing the need formaintenance.

The additional inside storage space has also reducedCEGE's maintenance workload. With the receipt in recentmonths of new equipment into REFORGER and 2 + 10 projectsand the projected receipt of

L[ deletedCEGE estimates it will be short about 15 percent in POMCUSrequirements for controlled-humidity storage space. USAREURand CEGE estimated this means that eight additional controlled-humidity warehouses would be required to accommodate POMCUSequipment in Germany at r deleted I percent of author-ization. (See ch. 5.)

22

Less maintenance time spentpreparing REFORGER equipmentfor issue

CEGE personnel responsible for programing the cyclicmaintenance workload for fiscal year 1979 are allowing only4 to 6 weeks of maintenance personnel time for assistingthe REFORGER units to prepare and withdraw equipment forthe exercise. This includes such things as preparing watertrailers, load-testing wreckers, and preparing some of thelarge weapons. In the past, up to 3 months of cyclic main-tenance time was diverted to allow CEGE personnel to prepareequipment for issue, including any needed maintenance.

Less maintenance time spentrepairing REFORGER equipmentafter the exercise

After the REFORGER exercise, participating units aredirected to do needed repair work in order to return allequipment to the CEGE storage site in as close to ready-for-issue condition as possible. If units return vehiclesin ready-for-issue condition, CEGE's future cyclic main-tenance workload will be reduced. CEGE officials cite themaintenance work done by REFORGER 1977 units as a majorreason why the fiscal year 1978 cyclic maintena1.. e programis ahead of schedule. For example, one REFORGER unit wascited for exceptional performance because it installedover 1,200 repair parts within a 5-day period. Anotherunit was credited with returning equipment in as good orbetter condition than when issued.

Less maintenance time spent onnewer equipment cominQ into POMCUS

CEGE officials at the headquarters, battalion, andstorage site levels believe that, with only minor exceptions,the large amount of equipment brought into POMCUS during thelast year was received in good condition. This equipmentincluded both new stocks from production and rebuilt equip-ment received from Army depots. Because this equipment isrelatively new, it requires less cyclic maintenance thanmuch of the older equipment in POMCUS stocks.

23

Increased productivity asa result of civilianizinqmany maintenance positions

As detailed in chapter 6, CEGE officials believe thatcivilianization of much of CEGE's maintenance work forcehas increased overall productivity. With a largely civilianwork force, CEGE officials concluded that fewer hours arelost to military nonmaintenance functions. Our analysisshows that local national employees have an estimated 200hours more time available to perform maintenance each yearthan their military equivalents.

Equipment upgrade andcorrosion control programs

In our prior review we recommended that the Secretaryof the Army provide USAREUR with enough resources--personneland funds--to complete the equipment upgrade and corrosioncontrol programs. Since that time, CEGE has integratedinto its cyclic maintenance program the identificationof equipment requiring upgrade or corrosion work. Theseefforts have apparently been successful in correcting equip-ment problems related to upgrade and corrosion control.

Upgrade program

During 1974 and 1975, CEGE identified more than 1,200pieces of equipment needing excessive parts or man-hoursto return them to an operational status. A commnand materialupgrade program was initiated to repair, where possible,equipmzn.t in this category. As of February 1978, only 47items were awaiting upgrade, and CEGE expected this workto be completed by August 1978.

Corrosion control program

Storage site quality control personnel inspect equip-ment scheduled to undergo cyclic maintenance both beforeand after maintenance and preservation steps are applied,and they are responsible for identifying equipment requir-ing corrosion treatment. Equipment with advanced corrosionis sent to a higher level maintenance unit. During 1976and 1977, CEGE identified about 2,500 items (trailers,wheeled vehicles, and other prime movers) needing major rustrepair work, some of which were classified ac being beyondeconomical repair. According to a CEGE spokesman, all but

24

50 to 100 of the 2,500 items have been repaired or replaced.Officials at the three sites we visited said that, to theirknowledge, no equipment was at a higher level maintenanceunit for correction of corrosion problems.

Based on information obtained from CEGE officials andon our inspection of equipment at the three sites we visited,rust is not being allowed to reach advanced stages and corro-sion of POMCUS equipment is no longer the problem it was atthe time of our last review. Specifically, we reached thisconclusion only after closely examining 82 pieces of equip-ment as a part of our locator system accuracy test (see ch. 7)and observing hundreds of items during our walk-through ofcontrolled-humidity warehouses and open storage areas atstorage sites.

EQUIPMENT CAMOUFLAGE PROGRAM

At the time of our last review, none of the POMCUSequipment was camouflaged. USAREUR officials said paintingwould probably begin in fiscal year 1977 and require 4 yearsto complete. As of June 1978, POMCUS equipment had stillnot been camouflaged and only preliminary budget planninghad taken place. The estimated cost of camouflaging POMCUSequipment using contract personnel is about $7.1 millionover a 4-year period.

In USAREUR's opinion, an absence of camouflage paintnot only will decrease the battlefield survivability ofPOMCUS units, but also may actually help the enemy identifythe movement of POMCUS units in a contingency. This wouldoccur because the forward-deployed U.S. units in Europehave already completed camouflage painting of their equip-ment.

USAREUR, aware of the importance of camouflage, haseven considered delaying CEGE's cyclic maintenanceprogram in order to accomplish camouflage painting. How-ever, funds requested for fiscal year 1979 to camouflagethe equipment were not approved. USAREUR will again re-quest funds for this project for fiscal years 1980-83.

CONCLUSIONS

Regular periodic maintenance is necessary to insurethat POMCUS equipment will be combat ready in an emergencyas well as to protect the equipment.

25

Since our last report, the Army has improved the conditionof POMCUS equipment. This improvement resulted from changesin CEGE's maintenance policies and programs, increased avail-ability and productivity of maintenance personnel, moreand better storage facilities, and procurement of newerequipment requiring less maintenance. Each factor enhancedCEGE's ability to keep up with cyclic maintenance.

RECOMMENDATION

Because of past problems in keeping POMCUS equipment inready condition, we recommend that the Secretary of Defensedirect the Secretary of the Army to closely monitor the cyclicmaintenance program to make sure that it remains on schedule.

26

CHAPTER 5

STORAGE AND MAINTENANCE FACILITIES

CEGE's success in carryinq out its mission to storeand maintain combat-ready equipment depends partly on theavailability and adequacy of storage and maintenancefacilities. In our last review we found that, becauseCEGE had too few controlled-humidity warehouses, some ofits equipment had to be stored in open storage lots. Also,we reported that the maintenance of controlled-humidity ware-houses was largely unsatisfactory and that CEGE's equipmentmaintenance facilities were generally substandard.

Currently, CEGE's controlled-humidity warehouse spacemay still be insufficient, and equipment maintenance facili-ties are still inadequate; but some actions have been takento plan or finance improvements.

CONDITION AND USE OFCONTROLLED-HUMIDITY WAREHOUSES

CEGE currently has 79 controlled-humidity warehousesin use in Germany. USAREUR headquarters and CEGE officialsestimated that eight additional waLehouses are required toprovide controlled-humidity storage for all equipment(except trailers, outsized engineer equipment, and MRLOGAEURequipment) expected to be received in Germany when POMCUSreconstitution is completed. No actions had been taken toget approval for these warehouses. Currently, all existingPOMCUS equipment, except that mentioned above, is storedin controlled-humidity or general-purpose warehouses.

MRLOGAEUR equipment is stored at three locations, twoin Germany and one in Belgium. The sites in Germany aretemporary, and some of the expensive new equipment is storedoutside, because the Army plans to eventually store allMRLOGAEUR equipment deleted IThree controlled-humidity warehouses are planned in Belgiumfor this equipment.

Since the controlled-humidity warehouses in Germany arepart of NATO infrastructure, they are subject to NATO inspec-tion. The latest available inspection reports, dated Marchand April 1978, include 6 of CEGE's 7 storage sites in Germanyand 65 of the 79 controlled-humidity warehouses. The inspec-tors rated warehouse maintenance as satisfactory to excellent,a significant improvement over conditions at the time of our

27

last review. They report, however, that CEGE is still havingproblems keeping humidity in some warehouses within accept-able limits.

During our site visits to three storage units, we ir.-spected nine controlled-humidity warehouses and found thatfour had humidity readings outside tolerable limits. Over-all, however, the warehouses were in good condition.

Also, all space in the controlled-humidity warehouseswas being fully used. No equipment was stored outside whichshould have been stored in theev cacilities. At one site,a controlled-humidity warehouse was being used to storenonmechanical equipment. However, all equipment requiringcontrolled-humidity storage was already in such storage.

The following photographs show equipment stored in-side and outside, and the types of storage facilities thataccommodate the equipment.

;

r

MRLOGAEUR EQUIPMENT STORED OUTSIDE IN GERMANY

28

M-60 TANKS STORED IN CONTROLLED-HUMIDITY WAREHOUSES

POMCUS EQUIPMENT STORED IN CONVENTIONAL WAREHOUSES

29

E,'TERIOR OF CONVENTIONAL WAREHOUSES AT A CEGE STORAGE SITE

CONTROLLED-HUMIDITY WAREHOUSES AT A CEGE STORAGE SITE

30

MAINTENANCE FACILITY IMPROVEMENTS ARE PLANNED

During 1975 CEGE completed a survey of its facility needsand estimated that about $43 million would be required tobring CEGE maintenance facilities in Germany up to Armystandards. USAREUR sent a facilities requirements list tothe Department of the Army in June 1976. It included majorCEGE needs, such as

--armament maintenance and storage facilities,

--vehicle maintenance and preservation facilities,

-- shipping and receiving areas, and

--wash and grease racks.

Headquarters, USAREUR, requested the Department ofthe Army to provide about $40 million in the fiscal year1978 military construction budget to construct eight newmaintenance facilities. The Congress approved $33.6 mil-lion in military construction funding but directed theDepartment of the Army to first seek NATO direct fundingfor these facilities. CEGE requirements have been passedthrough channels to be considered for NATO funding in 1978.

CONCLUSIONS

CEGE's success at carrying out its mission to storeand maintain combat-ready equipmen depends partly oil theavailability and adequacy of storage and maintenancefacilities. Presently, some equipment maintenance facili-ties are inadequate, but the Army has acted to plan orfinance improvements. Th(.refore, we are not making anyrecommendations about such facilities at this time. How-ever, we believe USAREUR should seek temporary means tocover the MRLOGAEUR equipment stored outside in Germany.

RECOMMENDATION

We recommend that the Secretary of Defense instruct theSecretary of the Army to provide, at least temporarily,protection for MRLOGAEUR equipment currently stored outsidein Germany.

31

CHAPTER 6

POMCUS SUPPORT PERSONNEL

CEGE has no significant personnel shortages and appearsto be properly staffed to adequately perform its equipmentmaintenance mission; however, it may not have enough per-sonnel to properly perform the prestorage equipment pres-ervation function.

As of June 1978, CEGE had 2,309 personnel authorizedand 2,248 assigned, leaving a shortage of 61. The follow-ing table illustrates the June 1978 personnel status.

Military Civilian Total

Authorized 523 1,786 2,309Assigned 476 1,772 2,248

Shortage 47 14 61

CIVILIANIZATION OF SUPPORT PERSONNEL

At the time of our last report, Headquarters, USAREUR,had directed CEGE to substantially civilianize its workforce by June 30, 1976. This action occurred as a partof the Army's compliance with the "Nunn Amendment" (PublicLaw 93-365). As shown below a net reduction of 213 personneloccurred in the CEGE work force--military personnel were notreplaced on a one-for-one basis with civilian personnel.

Authorization Military Civilian Total

Pre-Nunn Amendment 1,533 931 2,464Post-Nunn Amendment 536 1,715 2,251

Reduction (-)or gain -997 784 -213

Although some U.S. military personnel continue to main-tain POMCUS equipment, CEGE's maintenance work force is madeup primarily of non-U.S. civilians. The non-U.S. civilianwork force consists of two groups of employees--local

32

national and labor service. 1/ In June 1978 local nationalsmade up about 77 percent of CEGE's civilian maintenancework force.

CEGE's work force was a good candidate for civilianiza-tion since its local national maintenance work force doesnot have a wartime mission after the POMCUS equipment isissued to deploying U.S.-based forces. The civilianizationtook place primarily at the storage sites, generally involv-ing personnel that store, maintain, and preserve the equip-ment.

According to CEGE officials, civilianization of thesepositions has increased productivity by

--reducing the amount of time CEGE personnel spendaway from their jobs on military requirements,

--stabilizing the work force by reducing turnovercaused by military personnel rotation, and

-- allowing faster filling of position vacancies.

ADEQUACY OF CEGE's WORK FORCE

CEGE officials believe the work force, in terms of"wrenchturners" performing equipment maintenance tasks,is sufficient to handle the maintenance mission when CEGEhas 100 percent of its authorized equipment. However,they believe they do not have enough personnel authorizedto adequately carry out the equipment preservation tasksbefore the equipment is stored. CEGE's opinions aresupportable. For example, statistics show that 92 per-cent of the pieces of equipment scheduled in the 1977cyclic maintenance program were completed in maintenance,while only 81 percent of the pieces requiring preservationwere completed.

For fiscal year 1978 CEGE's overall goal was to com-plete 70 percent of the equipment in maintenance and pres-ervation by May 15. As of this date, CEGE had actually

l/Labor service employees are organized as mobile units,which are assigned to and perform support missions forparent U.S. military units. These employees have awartime role. Local national employees are all othernon-U.S. employees.

33

completed 71 percent of the 27,715 pieces scheduled formaintenance, but only 66 percent of the 27,490 piecesscheduled for preservation.

As discussed in chapter 4, CEGE officials believe thatthe 1978 cyclic maintenance program workload is about thesame as the average annual program workload will bewhen the currently authorized stocks are filled. Becauseof this, and the fact that overall they are ahead of themaintenance schedule after the first 8 months of the fiscalyear 1978 program, they believe their work force is sufficientto handle the future cyclic maintenance program without ac-cumulating a serious backlog.

Weakness in CEGE maintenancedata information system

To substantiate CEGE's opinion on the adequacy of thework force, we computed the number of personnel CEGE wouldneed in its shops to adequately handle the cyclic mainten-ance program with POMCUS at 100 percent of authorization.CEGE's data for making such an analysis is questionable.

We used four basic data elements to compute the requiredwork force:

1. Number and type of authorized pieces of equipment.

2. Average hours required per piece of equipment.

3. Percent of total authorized equipment goingthrough cyclic maintenance annually.

4. Average productive man-hours per direct laboremployee.

We have confidence only in the first element--numberof authorized pieces of equipment--because CEGE has alisLing of all items and their densities authorized forprepositioring.

The second data element--average man-hours per pieceof equipment--may not be reliable for projecting futurestaff requirements because the averages used, which werebased on the fiscal year 1977 cyclic maintenance program,may be overstated.

34

Average man-hours per piece of equipment may decreasebecause greater productivity is achieved through civilianiza-tion, new equipment is received which requires less mainten-ance, and more maintenance is being done before the equip-ment is returned after REFORGER exercises. As a result, moreequipment is being processed through the 1978 maintenanceprogram than through the 1977 program, with the same sizework force.

The third item--percentage of total authorized equip-ment that would go through cyclic maintenance annually--maynot be reliable because CEGE has not been able to stateprecisely how much equipment is stored inside and outside.As mentioned earlier in the report, the maintenance cyclefor items stored inside is different from the cycle foritems stored outside.

The fourth item--average productive man-hours oer directlabor employee--is not supportable because CEGE's mainten-ance personnel data information system does not accountfor all of the employees' direct labor time.

We attempted to refine the data on our own and with CEGEofficials, but were unsuccessful. Since an error of even 1percent in the amount of equipment in each annual programor in the percentage of each worker's workday spent on directlabor greatly affects the number of personnel required (upto 15 in some cases), the results of our analysis would notbe useful.

We also reviewed the approaches used by the manpowersurvey teams to make surveys at CEGE during 1976 and 1977.The survey teams used the same kinds of data we attemptedto work with at CEGE, such as unreliable man-hour averagesand CEGE estimates for certain tasks' time requirements.Although today's authorized staffing level is about thesame as the manpower survey team's final recommendations,we have no confidence in the survey team's approach todetermine CEGE's staffing needs.

CEGE officials agreed that their maintenance data in-formation system is not adequate to determine work forcerequirements and stated that actions are underway to defineand provide maintenance management data that is reliablefor these purposes.

35

Our last report noted that the Department of the Armyconcluded in a June 13, 1975, survey report on POMCUS thatCEGE efforts to improve maintenance management are inhibitedby the lack of a management information system. The Armyrecommended that USAREUR emphasize the ongoing effort todevelop a management information system for POMCUS.

CONCLUSIONS

CEGE appears to be properly staffed to adequately carryout its equipment maintenance mission, but CEGE officialsbelieve they may not have enough personnel to do the pre-storage equipment preservation work. Currently CEGE is notreporting any significant personnel shortages. CEGE needssufficient maintenance data to accurately accumulate main-tenance man-hour information, develop work standards, andforecast work force requirements.

RECOMMENDATION

We recommend that the Secretary of Defense direct theSecretary of the Army to develop sufficient maintenancedata for accurate forecasting of work force requirements.This data should be coordinated with other available datato provide more complete information for managing POMCUSassets.

36

CHAPTER 7

INVENTORY ACCOUNTABILITY AND CONTROL

Our prior review indicated that accountability and con-trol of POMCUS equipment had improved but that improvementswere still needed in the (1) accountability for componentsof sets and kits and (2) equipment locator system.

CEGE is now making more frequent inventories of com-ponents, but accountability of components and other itemsand poor inventory record information are still problems.On the other hand, the equipment locator system at thethree sites we visited had improved significantly. Problemsand improvements in POMCUS equipment inventory accountabilityand control are discussed below.

PHYSICAL INVENTORIES ARE BEING MADE

The Division Logistics System accounting system requiresthat the CEGE property book officer annually inventory eachmajor end item. Inventories of major end items should bemade monthly on about 10 percent of all POMCUS units to in-sure that all of the units are inventoried each year. InJanuary 1977, CEGE also initiated a one-time inventory pro-gram for components of all POMCUS equipment. After complet-ing this one-time program, CEGE directed that component in-ventories be made on a unit basis as a part of the regularcyclic maintenance program. Storage sites also inventoryboth major end items and components for each participatingRPFORGER unit's equipment before and after the exercise.

We examined inventory reports submitted to CEGE by thePOMCUS storage sites between October 1976 and May 1978.These reports indicate that storage sites are routinely in-ventorying both major end items and components. Reports ofphysical inventories are submitted only when inventoriesdisclose gains or losses. Thus, we could not confirm thatinventories had been done every month in all cases. Theresults of the most recent physical inventories of POMCUSequipment are discussed below.

Inventory adjustments

During fiscal year 1977, a net increase of $136,725occurred in end items and component property accounts:

37

Adjustments for gains $543,657Adjustments for losses 406,932

Net gains $136,725

After 2 years of making adjustments almost entirely for in-ventory losses, CEGE's fiscal year 1977 program shows gainsexceeding losses. CEGE officials believe this indicates thatits personnel are making more thorough inventories than inthe past. This trend was also prevalent during the first8 months Gf fiscal year 1978, during which reported gainswere nearly 13 times greater than losses for the same period.

Inventory gains

Gains were recorded in property accounts when inventoriesshowed that items were on hand but not included in propertyaccounts or when an item was found during an investigation ofits loss. Some of the more expensive items found during in-ventories were trailers, generators, radios, compressors,refrigerators, and 1/4-ton utility trucks. Gains reportedfor the first 8 months of fiscal year 1978 totaled $187,733.

Inventory losses

Losses were recorded in property accounts for items thatwere supposed to be on hand but which were not found duringinventories. Only one major end item, a 1/4-ton cargotrailer, was reported as a loss during fiscal year 1977.The remaining losses included a number of components cate-gorized as "everyday tools," such as portable saws, drills,sanders, socket sets, torches, vises, and general-purposetool kits. In 1977 one site reported a loss of over $21,000in components from tool kits, including the following:

TotalNumber of Unit reported

Item units lost price loss

Portable electricdrills 13 $ 64 $ 832

Circular saws 26 383 9,958Disk sanders 15 85 1,275

CEGE-wide losses reported for the first 8 months of fiscalyear 1978 were only $15,332, compared to losses of $406,932reported during fiscal year 1977.

38

ACCOUNTABILITY AND CONTROL OF SOME COMPONENTSOF SETS AND KITS ARE STILL A PROBLEM

A problem still exists concerning accountability andcontrol over components of sets and kits that are not in-dividually accountable items. For example, a tool set isan accountable item, and it is recorded in property records.However, the tools in the set are classified as expendableitems and, therefore, are not individually recorded in prop-erty records. Such items are vulnerable to pilferage.

Reasons for component losses

CEGE's fiscal year 1977 physical inventory reports showthat component shortages had been frequently noted duringinventories after (1) movements of entire units' equipmentfrom one storage site to another site (restationing) and(2) movements of select pieces of equipment from one storagesite to another (cross-leveling). Because shortages ofPOMCUS equipment in high-priority units have been reduced,the need for future cross-leveling has diminished. Also,the major restationing program is complete, and there are noplans to move entire unit sets from ore storage site toanother.

Other component shortages were disclosed during inven-tories before and after the REFORGER exercise. In severalcases, loss of components was attributed to using unsecuredstorage facilities and storing components unsecured on theback of vehicles during the exercise. Both situations in-crease the potential for pilferage. From our review of in-ventory adjustment reports, we were unable to determine anymajor cause of component losses. However, a CEGE storagesite official pointed out that, because most components haveno serial numbers, accountability over them is difficult.

CEGE's component _inventoryproram

To improve the overall POMCUS program, USAREUR directedCEGE to undertake a 100-percent component inventory of allPOMCUS equipment. According to CEGE's commanding officer,past CEGE efforts to complete an effective component inven-tory were not totally successful. Therefore, CEGE initiateda component inventory program in January 1977, with plans tocomplete all component inventories by March 1978. Requisi-tions for shortage components were to be submitted by April1978 to have all shortages filled by June 30, 1978. CEGEwas given funding to meet this deadline.

39

Component inventories were reportedly made by the in-dividual storage sites between February 1977 and April 1978.CEGE was responsible for monitoring the program's progress.According to a CEGE supply officer, a 100-percent componentinventory of all POMCUS equipment was completed in April 1978.

We are not convinced that the inventory program wassuccessful in identifying, requisitioning, and filling allcomponent shortages. CEGE's Directorate of Supply, althoughresponsible for the program, was unable to provide any infor-mation on program results. They could not tell us the extentof shortages or excesses disclosed during the inventory or,in the case of shortages, whether needed components had beenrequisitioned and received. In addition, component inven-tories were made during a period when POMCUS equipment onhand was considerably less than authorized quantities. Inthis regard, CEGE was unable to assure us that component in-ventories were made of the vast quantities of new equipmentreceived during recent months.

Basic issue items

Generally, a basic issue item (BII) supports themechanical operation of POMCUS equipment. An example of aBII is a vehicle's general-purpose tool kit, including suchitems as wrenches and a jack.

BII shortages are notbeing requisitioned

Some BII boxes with known shortages are shipped fromCEGE's central packing facility to the storage sites.USAREUR considers a BII box to be complete when packed at90-percent fill as long as none of the items omitted arecritical to the operation or servicing of the equipment theBII is intended to support.

Procedures for inventorying BIIs differ from site tosite. At one site when a BII box is first received, supplypersonnel break the bands and inventory the contents againstthe packing list. Another site simply receives and storesthe BII box without making an inventory. Regardless of theinventory procedures used, no sites are replenishing BIIshortages existing at the time the BII is received by thestorage site. According to CEGE's deputy commander, CEGEdoes not consider it cost effective to have sites identify,requisition, receive, and pack items falling within the10-percent shortage category.

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BIIs reported unsatisfactorby some REFORGER units

Problems with BIIs were noted by participating unitsduring REFORGER 77. For example, an inventory of BIIs bythe exercising units revealed a number of discrepanciesbetween on-hand quantities listed on the packing list andthe items actually on hand. CEGE also reported an instancein which 20 BII boxes for jeeps were found to be empty.These boxes had been banded and affixed with a packing list.The CEGE supply activity representatives responsible for pack-ing BIIs were informed of the numerous discrepancies and ofthe empty BII boxes but were unable to explain the shortages.

CEGE'S EQUIPMENT LOCATORSYSTEM HAS IMPROVED

In our last review, upon testing the accuracy of theequipment locator system for seven units at five CEGE storagesites, we found that only 70 percent of the items checkedwere actually where the locator system indicated they wouldbe. We believed that such inaccuracies would inhibit timelyequipment issue in an emergency.

During our recent visit to three storage sites, wetested the accuracy of the equipment locator system for82 serial-numbered major end items, including tanks, genera-tors, and various wheeled and tracked vehicles. The itemstested were assigned to 21 units stored in 20 warehouses and4 open storage areas. Our test showed that all items werein the locations designated on storage site location charts.Similar tests performed by CEGE's battalion inspectors alsoindicate that location accuracy for major end items is nolonger a problem.

CONCLUSIONS

Although records show that CEGE is making more frequentand periodic inventories of POMCUS equipment, accountabilityof components is still a problem. CEGE has not exercisedenough control over its component inventory program to statewith any certainty the extent to which component shortageshave been identified, requisitioned, and filled. Similarly,CEGE has not established procedures to insure proper inven-tories of basic issue item components and subsequent requisi-tioning of shortages.

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Our tests of the accuracy of CEGE's equipment locatorsystem showed that the system is extremely accurate and hasimproved significantly since our last report.

RECOMMENDATION

We recommend that the Secretary of Defense direct theSecretary of the Army to assure that inventories whichidentify shortages and requisitioning needs are properlymade and recorded.

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CHAPTER 8

READINESS REPORTING

At the time of our last report, only 19 percent of theREFORGER and 2 + 10 units were reported combat ready. How-ever, equipment receipts under the Army's program to im-prove the readiness of these units have increased to over

eleted percent the number of combat-ready units.The following table shows the June 20, 1978, unit readinessstatus of all POMCUS units, as reported to the Cepartment ofthe Army on July 26, 1978.

Substan- NotReady tially Marginally ready(C-l) ready (C-2) ready (C-3) (C-4) Total

REFORGER2 + 10MRLOGAEURMedical

Totaldeleted

Percent oftotal

IMPLEMENTATION OF THE NEWREADINESS REPORTING SYSTEM

During _our last review, the readiness reporting systemwas accurate porting that POMCUS was not ready to sup-port its overall mission, but the system was not definitiveenough to show what mission POMCUS could support or to pin-point specific problems. We made no specific recommendationsince USAREUR had initiated action to develop a better readi-ness reporting system for POMCUS.

Since that time the Army has developed a new system.The system, referred to as the Unit Status Report, wasscheduled for implementation in September 1978. It shouldovercome most of the old system weaknesses noted in ourearlier report and improve overall readiness reporting. Afinal assessment of the improvement in readiness reporting

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resultl,.g from the new system cannot be made until it isoperational.

The new system, like its predecessor, will report reaJi-ness of POMCUS equipment using two criteria. The first isavailability, which is first expressed as a percentage ofequipment on hand versus that authorized. The second judgesequipment serviceability according to whether the equipmentis in storage (ready) or in maintenance (not ready). 1/

The major change in the new reporting system involves aredefinition of readiness reportable equipment. In the past,readiness was evaluated quarterly on all reportable lines ofequipment in a unit without regard for the essentiality ofsuch equipment to a unit's mission. Under the new system,monthly unit readiness reports will be based on both (1) pri-mary weapons and equipment in total and (2) pacing items,which are those primary weapons and equipment items of suchimportance that they "pace" unit readiness as a whole. Pri-mary weapons and equipment are major pieces of equipmentessential to and employed directly in accomplishing assignedoperational missions and tasks. Pacing item equipment in-cludes tanks, howitzers, and armored personnel carriers. Thepacing item is of key importance because a unit's equipmentrating can be no higher than the lowest of its pacing itemratings.

IMPROVEMENTS AND WEAKNESSES IN THENEW UNIT STATUS REPORTING SYSTEM

The following sections discuss the extent to which thenew readiness reporting system will address weaknesses inthe current system noted in our last report.

-- In the old system, the criteria for reporting thepercentage of equipment on hand versus that author-ized treated each item equally regardless of its combatessentiality. For example, trailer-mounted bakeryplants and portable bath units were given the sameweight as combat tanks, machine guns, howitzers, andarmored personnel carriers. Tha new system will focusand report only on equipment considered essential tothe unit's mission.

l/Under certain circumstances, equipment in maintenance canbe considered ready if CEGE can make repairs within pre-scribed time limits.

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-- The old system did not provide for commanders' commentsas in normal Army units. Therefore, the reportingsystem did not provide judgmental appraisals. Thenew system requires commanders' remarks for any POMCUSunit not rated combat ready. The remarks must explainthe equipment shortages and/or problems causing theaegraded status and give, if known, a projected datewhen the unit will be combat ready.

--Readiness reporting in the 1976 report was based on1973 authorizations, which did not reflect actual au-thorizations at the time. Under the new readiness re-porting system, reportable equipment will be annotatedagainst current equipment authorizations. USAREUR ex-pected to receive the new authorizations in July 1978.

--Equipment condition addressed in our 1976 report wasbased on whether or not equipment was in storage(ready) or in maintenance (not ready). Some of theequipment in storage was known to be in poor condition(rnot combat ready) and should not have been reportedready merely because it was in storage and not inmaintenance. Further, not all equipment in the main-tenance cycle was likely to have deficiencies largeenough to cause it to be rated not combat ready.Under the new system, equipment in storage will con-tinue to be reported as "ready," provided that it wasoperational when placed in storage. Equipment in main-tenance, however, can be reported operational if CEGEis able to make it operational within established timelimits.

-- The old system does not link a weapons system with itscomponents. For example, a combat tank is not linkedwith its armament, fire control, or communications.This procedure is unchanged under the new system.Since POMCUS end items and components are stored andtested separately, Army officials feel this justifiesa different reporting procedure from that used by theactive forces. We believe POMCUS equipment should bereported as a total system so decisionmakers will beaware of the complete readiness condition of theentire weapon, including the end item and componentstiat go along with it.

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-- The old reporting system does not relate availableassets to requiremeli s of units in their order ofdeployment--it does I)t show what units can be sup-ported when shortages exist. This proaCdure is thesamne under the new system. However, in view of theoverall reduction in POMCUS shortages (see ch. 3),this reporting system weakness is less important.REFORGER units, generally the first units to deployto Europe in a contingency, have been receivingequipment ahead of lower priority POMCUS units.

CONCLUSIONS

Since our last report the Army has developed a newreadiness reporting system. We believe the new system willovercome most of the old system's weaknesses noted in ourearlier report and improve overall readiness reporting.Nevertheless, steps should be taken to further improvereadiness reporting.

RECOMMENDATION

We recommend that the Secretary of Defense direct theSecretary of the Army to improve the new readiness reportingsystem for POMCUS by showing the ready condition of thetotal weapon system, rather than the end item and componentsseparately. This is the way material readiness is now re-ported for the active forces.

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APPENDIX I APPENDIX II

EQUIPMENT ON-HAND RATINGS OF REFORGER

AND 2 + 10 UNITS AS OF JUNE 30, 1978

REFORGER project

RatingUnit C-I C-2 C-3 C-4 Total

1st InfantryDivision

3d ArmoredCavalry

OtherREFORGER

deletedTotal

Percent oftotal

2 + 10 project

deleted

deleted

Total

Percent oftotal

Note: The ratings in this chart for the REFORGER and 2 + 10units differ from the REFORGER and 2 + 10 unit ratingson the first page of chapter 8 for two reasons:

1. The ratings in this chart recognize equipment re-ceipts up to June 30, 1978, while the ratings inchapter 8 reflect June 20, 1978, status. Thisshould have a minimal effect on the ratings.

2. This chart represents only equiponent ratings, whilethe chart in chapter 8 recognizes both equipment onhand and equipment condition in the ratings.

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APPENDIX II APPENDIX II

SHORTAGES AS OF JUNE 30, 19 78L TO BE FILLED

BEFORE ALL REFORGER AND 2 + 10 COMBAT UNITS CAN

BE COMBAT READY (EQUIPMENT ON HAND)

Nomenclature Quantity

deleted

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APPENDIX II APPENDIX II

Nomenclature Quantity

deleted

(947329)

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