Cost estimates for Army equipment repair, upgrades go up by billions

Rebuilding the Army's equipment stocks that have been lost, damaged or worn down by combat operations in Iraq and Afghanistan will cost at least $190 billion from 2004 to 2013, according to a new report by government auditors. Total equipment costs will not be known for some years because repair and replacement needs are tied to how long military operations continue.

Adding to the cost is the Army's modularity initiative, which is designed to convert its organizational building block from large divisions to more agile brigades. That effort will cost more and take longer than original Army estimates, the Government Accountability Office concluded in recent congressional testimony (GAO-08-669T). The Army needs much more equipment than originally thought because it now plans to convert and outfit National Guard units as well as active units and is adding 74,000 soldiers to its active-duty ranks.

GAO said it lacks a clear picture of the Army's funding needs because the service has yet to provide a plan detailing how it will restructure existing forces and add six new combat brigades. The report said congressional oversight of Army equipment needs has been complicated by multiple funding requests for the same purpose -- such as replacing pre-positioned equipment stocks -- that draw from both the defense budget and emergency supplemental appropriations.

The Army initially estimated that converting to a modular organization would cost $52.5 billion from 2005 to 2011. The service has since said it will take until at least 2017 to make up shortfalls in equipment for modular units, but it has not revised its cost estimate. GAO said the Army's costs will climb because the original estimate was based on a modular design that has since changed, and it assumed National Guard and reserve units would keep older equipment. The Army now wants to outfit National Guard and reserve units with the same equipment as active-duty forces because the Guard and reserve units are frequently used in combat operations in Iraq and Afghanistan.

In early 2007, the Army estimated it would cost $70 billion to equip six new combat brigades. GAO said that estimate was not "transparent or comprehensive," and likely was too low. The service recently moved up its deadline to complete the expansion from 2013 to 2010, but has yet to develop a revised funding plan, GAO said.

The Army's costs to repair war-worn equipment, which the service calls "reset," also has climbed sharply, from $3.3 billion in 2004 to more than $17 billion in 2007. The service will require reset funding for the duration of the war and for two to three years after combat operations stop. GAO said its estimates show the Army will require at least $118.5 billion for reset from 2004 to 2013. Those costs will increase the longer the wars in Iraq and Afghanistan continue.