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Report to the Committee on Armed Services, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

September 2007: 

Quadrennial Defense Review: 

Future Reviews Could Benefit from Improved Department of Defense 
Analyses and Changes to Legislative Requirements: 

Quadrennial Defense Review: 

GAO-07-709: 

GAO Highlights: 

Highlights of GAO-07-709, a report to the Committee on Armed Services, 
U.S. Senate. 

Why GAO Did This Study: 

The Department of Defense (DOD) is required by law to conduct a 
comprehensive examination of the national defense strategy, force 
structure, modernization plans, infrastructure, and budget every 4 
years including an assessment of the force structure best suited to 
implement the defense strategy at low-to-moderate level of risk. The 
2006 Quadrennial Defense Review (QDR), completed in February 2006, 
represents the first comprehensive review that DOD had undertaken since 
the military forces have been engaged in operations in Iraq and 
Afghanistan. 

GAO was asked to assess (1) the strengths and weaknesses of DOD抯 
approach and methodology for the 2006 QDR and (2) what changes, if any, 
in the QDR legislation could improve the usefulness of the report, 
including any changes that would better reflect 21st century security 
conditions. To conduct its review, GAO analyzed DOD抯 methodology, QDR 
study guidance, and results from key analyses and also obtained views 
of defense analysts within and outside of DOD. 

What GAO Found: 

DOD抯 approach and methodology for the 2006 QDR had several strengths, 
but several weaknesses significantly limited the review抯 usefulness in 
addressing force structure, personnel requirements, and risk associated 
with executing the national defense strategy. Key strengths of the QDR 
included sustained involvement of senior DOD officials, extensive 
collaboration with interagency partners and allied countries, and a 
database to track implementation of initiatives. However, GAO found 
weaknesses in three key areas. First, DOD did not conduct a 
comprehensive, integrated assessment of different options for 
organizing and sizing its forces to provide needed capabilities. 
Without such an assessment, DOD is not well positioned to balance 
capability needs and risks within future budgets, given the nation抯 
fiscal challenges. Second, DOD did not provide a clear analytical basis 
for its conclusion that it had the appropriate number of personnel to 
meet current and projected demands. During its review, DOD did not 
consider changing personnel levels and instead focused on altering the 
skill mix. However, a year after the QDR report was issued, DOD 
announced plans to increase Army and Marine Corps personnel by 92,000. 
Without performing a comprehensive analysis of the number of personnel 
it needs, DOD cannot provide an analytical basis that its military and 
civilian personnel levels reflect the number of personnel needed to 
execute the defense strategy. Third, the risk assessments conducted by 
the Secretary of Defense and the Chairman of the Joint Chiefs of Staff, 
which are required by the QDR legislation, did not fully apply DOD抯 
risk management framework because DOD had not developed assessment 
tools to measure risk. Without a sound analytical approach to assessing 
risk, DOD may not be able to demonstrate how it will manage risk within 
current and expected resource levels. As a result, DOD is not in the 
best position to demonstrate that it has identified the force structure 
best suited to implement the defense strategy at low-to-moderate risk. 

Through discussions with DOD officials and defense analysts, GAO has 
identified several options for refining the QDR legislative language 
that Congress could consider to improve the usefulness of future QDRs, 
including changes to encourage DOD to focus on high priority strategic 
issues and better reflect security conditions of the 21st century. 
Congress could consider options to clarify its expectations regarding 
what budget information DOD should include in the QDR and eliminate 
reporting elements for issues that could be addressed in different 
reports. For example, the requirement to assess revisions to the 
unified command plan is also required and reported under other 
legislation. Further, some reporting elements such as how resources 
would be shifted between two conflicts could be eliminated in light of 
DOD抯 new planning approach that focuses on capabilities to meet a 
range of threats rather than on the allocation of forces for specific 
adversaries. GAO also presents an option to have an advisory group work 
with DOD prior to and during the QDR to provide DOD with alternative 
perspectives and analyses. 

What GAO Recommends: 

GAO recommends that for future QDRs, DOD develop methods to conduct a 
more thorough analysis of force structure and risk. GAO is also 
providing options for Congress to consider to revise QDR legislation. 
DOD generally agreed with our recommendations. 

[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-709] 

To view the full report, including the scope and methodology, click on 
the link above. For more information, contact Janet A. St. Laurent at 
(202) 512-4402 or stlaurentj@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

The QDR's Approach Had Several Strengths but Analytical Weaknesses 
Limited Its Usefulness in Assessing Force Structure, Personnel 
Requirements, and Risk: 

Options for Modifying Some Legislative Requirements Could Improve 
Usefulness of Future QDRs: 

Conclusions: 

Recommendations for Executive Action: 

Matters for Congressional Consideration: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology38: 

Appendix II: Quadrennial Defense Review Legislation in Effect for the 
2006 Quadrennial Defense Review40: 

Appendix III: Summary of New Changes in 10 U.S.C. �8 for Future 
Quadrennial Defense Reviews43: 

Appendix IV: DOD Comments44: 

Appendix V: GAO Contact and Staff Acknowledgments48: 

Related GAO Products: 49: 

Table: 

Table 1: Key Elements of Capabilities-Based Planning: 

Figure: 

Figure 1: Organizational Structure for the Development of the 2006 QDR: 

Abbreviations: 

DOD: Department of Defense: 
OSD: Office of the Secretary of Defense: 
QDR: Quadrennial Defense Review: 

United States Government Accountability Office: 

Washington, DC 20548: 

September 14, 2007: 

The Honorable Carl Levin: 
Chairman: 
The Honorable John Warner: 
Committee on Armed Services: 
United States Senate: 

Among the 21st century challenges facing the Department of Defense 
(DOD) and the nation are difficult decisions concerning how to strike 
an affordable balance between national security and domestic needs. 
Aided by annual and supplemental funding of over $400 billion per year 
since fiscal year 2003, DOD has been maintaining a high pace of 
operations while simultaneously transforming its military forces to 
meet emerging threats of the new security environment. However, as we 
have emphasized in previous reports, the federal government now faces 
increasing fiscal challenges, and DOD may face increasing competition 
for federal dollars.[Footnote 1] The 2006 Quadrennial Defense Review 
(QDR) represents the first comprehensive review of the national defense 
strategy that DOD has undertaken since military forces have been 
engaged in operations in Iraq and Afghanistan. Further, the 2006 QDR 
provided an opportunity for DOD to move beyond its long-standing 
approaches and methods and identify the capabilities required to meet 
current, emerging, and future threats. 

The QDR is a key component of national security planning. To ensure 
that the country's defense needs are reviewed periodically, Congress 
directed DOD to conduct comprehensive QDRs every 4 years to examine 
elements of the defense program and policies of the United States 
including the national defense strategy, force structure,[Footnote 2] 
modernization, infrastructure, and budget plan.[Footnote 3] Key 
assessments required during the review that relate to national security 
planning include: (1) the force structure best suited to implement the 
defense strategy at low-to-moderate level of risk; (2) the budget plan 
that would be required to provide sufficient resources to execute 
successfully the full range of missions called for in the national 
defense strategy at a low-to-moderate level of risk;[Footnote 4] (3) 
the Secretary of Defense's assessment of the nature and magnitude of 
the political, strategic, and military risks associated with executing 
the missions called for under the national defense strategy; and (4) 
the Chairman of the Joint Chiefs of Staff's assessment of risk. 

DOD submitted its report on the third quadrennial review to Congress on 
February 6, 2006.[Footnote 5] In the report, DOD concluded that "For 
the foreseeable future, steady-state operations including operations as 
part of a long war against terrorist networks and associated rotation 
base and sustainment requirements will be the main determinant for 
sizing U.S. forces." DOD also confirmed that for the long term it must 
size and shape U.S. forces for three main types of missions: homeland 
defense, the war on terrorism/irregular warfare,[Footnote 6] and 
conventional campaigns. In addition, DOD acknowledges that it must 
implement departmentwide change to ensure that organizational 
structures, processes, and procedures effectively support its strategic 
priorities. For example, DOD created the Defense Business 
Transformation Agency to integrate and oversee corporate-level business 
systems and initiatives in areas such as acquisition and logistics. 
Further, DOD reached several key decisions in the 2006 QDR that 
emphasized the need to continue changing the mix of joint capabilities 
and forces, such as stabilizing Army and Marine Corps active duty 
personnel at fiscal year 2006 congressionally authorized levels while 
increasing special operations forces in areas such as civil affairs 
units and special forces battalions, and military personnel for sea, 
air, and land teams. 

DOD viewed the 2006 QDR as a refinement of the concepts it introduced 
in its 2001 QDR report, such as shifting the basis of force planning 
from focusing on specific adversaries and geographic locations to 
capabilities-based planning that identifies the capabilities the 
military will need to prepare for a range of potential military 
operations against unknown enemies. In the 2001 QDR report, DOD 
introduced a risk management framework designed to help address the 
tension between preparing for future threats and meeting the demands of 
the present with finite resources and to size, shape, and manage the 
department to accomplish its strategic priorities. DOD planned to use 
the framework in conducting the 2006 QDR. 

Our work on past QDRs[Footnote 7] has shown long-standing weaknesses in 
DOD's assessment of force structure requirements. In past QDRs, DOD has 
not focused on longer-term threats and requirements for support 
capabilities, and its QDR reports have provided little information on 
some required issues, such as assumptions used in its analyses. 
Moreover, we have reported that force structure decisions were not 
clearly supported by analysis and linked to strategic plans. Further, 
in November 2005,[Footnote 8] we reported that DOD has not fully 
implemented a risk management approach and it planned to refine its 
risk management framework during the 2006 QDR. 

In 2006, Congress passed legislation[Footnote 9] which added new 
reporting elements that will apply to the next QDR in 2010 as well as 
future QDRs. For example, the Secretary of Defense must establish an 
independent panel to conduct a postreview assessment of the QDR 
including the recommendations, assumptions used, and vulnerabilities of 
the strategy and force structure underlying the review. The new 
legislation also required that the Secretary of Defense submit to the 
Senate and House Committees on Armed Services quarterly reports on the 
status of the department's implementation of the 2006 QDR decisions, 
beginning in January 2007.[Footnote 10] DOD submitted its first and 
second quarterly reports to Congress on January 31, 2007, and June 14, 
2007, respectively.[Footnote 11] 

You asked us to evaluate DOD's overall approach and supporting analysis 
in preparing the 2006 QDR and assess whether the QDR legislative 
requirements could be reevaluated to improve the usefulness of the 
report, including any changes needed to better reflect the security 
conditions of the 21st century. Accordingly, this report assesses (1) 
the strengths and weaknesses of DOD's approach and methodology for the 
2006 QDR and (2) what changes, if any, in the QDR legislation could 
improve the usefulness of future QDRs. 

To assess the 2006 QDR's strengths and weaknesses, we reviewed DOD's 
study guidance for the QDR and discussed the advantages and 
disadvantages of the review's process with DOD's officials. We also 
examined the methodology and results of the QDR key analyses and 
assessed how capabilities-based planning principles were applied during 
the assessments. To understand how the Secretary of Defense and the 
Chairman of the Joint Chiefs of Staff conducted their risk assessments, 
we reviewed the QDR's study guidance on assessing risk and held 
discussions with officials responsible for conducting risk assessments 
during the QDR. We reviewed DOD's quarterly report to Congress on the 
status of implementation for the 2006 QDR and post-QDR study team 
reports and implementation plans to review the processes that DOD has 
to implement QDR initiatives. Further, we held discussions with Office 
of the Secretary of Defense (OSD) officials responsible for monitoring 
the status of initiatives related to the QDR and ongoing work in the 
post-QDR study teams. To determine whether changes to the QDR 
legislation could improve the usefulness of future QDRs, we identified 
potential options from our analyses of prior QDRs and obtained the 
views of DOD civilian and military leaders who participated in the 2006 
QDR as well as nongovernmental defense analysts, many of whom had 
played key roles in previous QDRs or in prior defense strategy reviews. 
We performed our review from May 2006 through May 2007 in accordance 
with generally accepted government auditing standards. Further 
information on our scope and methodology appears in appendix I. 

Results in Brief: 

While DOD's approach and methodology for the 2006 QDR had several 
strengths, several weaknesses significantly limited the review's 
usefulness in addressing force structure, personnel requirements, and 
risk associated with executing the national defense strategy. On the 
positive side, the 2006 QDR benefited from the sustained involvement of 
key senior DOD officials who provided top-down leadership and oversight 
of the review process. Second, for the first time, DOD collaborated 
extensively with several major interagency partners, such as the 
Department of Homeland Security, as well as representatives of some 
allied countries to identify capabilities that would address current 
and future security threats. Third, leaders of the QDR's six study 
teams collaborated with each other to avoid duplication of work as they 
developed options to address DOD's challenges. Fourth, DOD has 
developed a database for monitoring the implementation of about 170 QDR 
initiatives, which range from changing organizational structures to 
enhancing military capabilities. However, weaknesses in three key 
areas--force structure analysis, assessment of personnel requirements, 
and assessment of the level of risk--hampered DOD's ability to 
determine the military force best suited to implement the defense 
strategy, which is a fundamental QDR goal, and thoroughly demonstrate 
how the risks associated with desired capabilities were evaluated. As a 
result, DOD is not well positioned to balance capability needs and 
risks within future budgets given the nation's serious budget 
pressures. 

* First, although the 2001 QDR and the 2006 QDR study guidance 
emphasized that DOD planned to use capabilities-based planning to 
perform its analysis, DOD did not conduct a comprehensive, integrated 
assessment of alternative force structures. A key reason why DOD did 
not conduct such an assessment of its force structure was that it has 
not developed an integrated capabilities-based planning approach for 
comparing alternative force structures. Although DOD relied on several 
analyses of different parts of the force structure to make decisions 
about capabilities, it did not integrate these analyses into a 
comprehensive assessment. For example, while DOD conducted separate 
studies about tactical aircraft and ground forces, these were not 
integrated into an overall assessment of the numbers and size of units 
needed. Further, instead of assessing different levels of forces and 
their capabilities and evaluating the trade-offs among capabilities, 
DOD's primary assessment approach was to compare currently planned 
forces to potential scenarios to determine whether and to what extent 
the planned force structure would experience shortages. 

* Second, DOD did not provide a clear analytical basis for its 
conclusion that the number of personnel in the active and reserve 
components across the military departments was appropriate to meet 
current and projected operational demands. A key reason why DOD did not 
provide a clear basis for its personnel requirements is that existing 
personnel levels were taken as a given, and DOD focused on analyzing 
options on how to change the skill mix of active and reserve military 
personnel and civilians. Further, within 1 year after the QDR was 
published, the Secretary of Defense announced plans to seek 
congressional approval to increase Army and Marine Corps personnel by 
92,000. These plans call into question the analytical basis of the QDR 
conclusion that the number of personnel and the size of the services' 
force structure were appropriate to meet current and future 
requirements. Without performing a comprehensive analysis of the number 
of personnel it needs, DOD cannot provide an analytical basis for its 
conclusion that its military and civilian personnel levels reflect the 
number of personnel needed to fill DOD's combat force structure and 
provide institutional support. 

* Third, the risk assessments conducted by the Secretary of Defense and 
the Chairman of the Joint Chiefs of Staff, which are required by the 
QDR legislation, did not fully apply DOD's risk management framework to 
demonstrate how risks associated with the proposed force structure were 
evaluated. Although tasked to use the risk management framework to 
demonstrate how risks were evaluated, several of the QDR study teams 
relied primarily on professional judgment to assess risks and examine 
the consequences of not investing in various capabilities. The Chairman 
was not tasked to use the risk management framework in assessing risks 
and did not choose to use it in his assessment. Our prior work has 
shown that performing a data-driven risk assessment can provide a guide 
to help organizations shape, focus, and prioritize investment decisions 
to develop capabilities. DOD did not conduct a comprehensive data- 
driven risk assessment because, according to DOD officials, it had 
difficulties in developing the department-level measures that would be 
necessary to assess risk and, as a result, the assessment tools were 
not available for use during the QDR. 

Without thorough alternative force structure assessments, analyses of 
personnel requirements, and comprehensive risk assessments, DOD cannot 
provide comprehensive analytical support for significant decisions so 
that Congress can effectively evaluate the benefits, costs, and risks 
of alternative force structures and associated expenditures of federal 
resources. We are recommending that the Secretary of Defense develop 
appropriate methods for conducting comprehensive, data-driven 
assessments in future QDRs of (1) the capabilities related to 
alternative force structures and related personnel requirements and (2) 
the risks associated with capabilities. DOD partially agreed with these 
recommendations. In its comments, DOD agreed that the 2006 QDR did not 
comprehensively assess alternatives to the planned force structure and 
instead assessed force requirements within capability areas. DOD stated 
that it is taking steps to provide more robust analysis of capabilities 
for future QDRs. However, until DOD comprehensively assesses 
alternative force structures that include examining alternatives across 
capability areas, it will not have the detailed information it needs to 
determine the force structure best suited to implement the defense 
strategy and to demonstrate risks associated with the planned force 
structure. DOD also agreed that the study teams inconsistently applied 
DOD's risk management framework, although it noted the senior leaders 
discussed a consolidated analysis of risk related to the proposed force 
structure as the QDR decisions were finalized in November 2005. DOD 
noted that further development of the department's risk management 
methodology is necessary to appropriately assess risks and it discussed 
some steps the department intends to take to identify performance goals 
and develop metrics. However, DOD did not provide detailed information 
or a time frame for the improvements it discussed. 

Several options exist for refining legislative language that Congress 
could consider to focus QDR statutory requirements on strategic issues 
and eliminate some reporting elements that are already required under 
other laws and that may no longer be as useful in the new security 
environment. Specifically, some defense analysts we interviewed 
suggested requiring DOD to focus its efforts on broad strategic issues 
and provide more information on the analytic basis for its key 
assumptions and strategic planning decisions. In addition, some defense 
analysts suggested that to facilitate congressional oversight and 
decision making, the QDR legislation should clarify Congress' 
expectations for information related to budget plans and planned trade- 
offs among capabilities. In addition, most analysts agreed that many of 
the detailed requirements requiring reporting on more operational 
issues, such as reporting on the unified command plan, may divert the 
QDR's focus from strategic issues and should be eliminated from the QDR 
and assessed separately. Finally, most defense analysts we interviewed 
believe that recent legislation, which requires DOD to appoint an 
independent panel to complete a post-QDR assessment of the results of 
future QDRs,[Footnote 12] could be expanded to include providing advice 
to the Secretary of Defense before or during the QDR process. We are 
suggesting that Congress consider options to (1) clarify expectations 
for how the QDR should address the budget plan that supports the 
national defense strategy and (2) eliminate some reporting 
requirements. DOD agreed with these suggestions. In our draft report we 
also suggested that Congress consider broadening the scope of the post- 
QDR assessment panel for future QDRs to include providing advice before 
or during the QDR process. In its written comments, DOD stated that 
having an independent panel that could provide advice and alternatives 
to the Secretary of Defense before and during the QDR process would be 
useful. However, DOD raised the concern that having the same panel 
advise the department before and during the QDR as well as critiquing 
the results could create mistrust between the department's leadership 
and the panel. To reflect DOD's concern, we have revised our matter to 
state that Congress should consider requiring an independent panel to 
provide advice and alternatives to the Secretary of Defense before and 
during the QDR. This change is intended to provide Congress with the 
flexibility to establish separate independent panels prior to and 
following the QDR. 

Background: 

In May 1995, the Commission on Roles and Missions of the Armed Forces 
proposed the idea of a comprehensive quadrennial review by DOD of the 
country's defense strategy and force structure. In August 1995, the 
Secretary of Defense endorsed the idea, and the following year 
legislation directed DOD to conduct the 1997 QDR.[Footnote 13] 

Congress created a permanent requirement for DOD to conduct a QDR every 
4 years in the National Defense Authorization Act for Fiscal Year 2000, 
passed in 1999.[Footnote 14] According to this legislation, DOD was to 
conduct a comprehensive examination of the national defense strategy, 
force structure, force modernization plans, infrastructure, budget 
plan, and other elements of the country's defense program and policies 
with a view toward determining and expressing the nation's defense 
strategy and establishing a defense program for the next 20 years. 
Originally the legislation identified 14 specific issues for DOD to 
address, such as a comprehensive discussion of the national defense 
strategy of the United States and the force structure best suited to 
implement that strategy at a low-to-moderate level of risk. In 
addition, it allowed the Secretary of Defense to review any other 
issues he considers appropriate. The legislation in effect during the 
2006 QDR reflected several amendments to the original legislation, for 
example, requiring DOD to assess the national defense mission of the 
Coast Guard. (See app. II for the legislation in effect during the 2006 
QDR.) 

Among other requirements, the 1999 QDR legislation required that the 
Secretary of Defense assess the nature and magnitude of the political, 
strategic, and military risks associated with executing the missions 
called for under the national defense strategy. In the 2001 QDR report, 
DOD introduced a new risk management framework that identified four 
areas of risk--operational, force management, future challenges, and 
institutional. According to the 2001 QDR report, the framework would 
enable DOD to address the tension between preparing for future threats 
and meeting the demands of the present with finite resources. Further, 
the framework was intended to ensure that DOD was sized, shaped, 
postured, committed, and managed with a view toward accomplishing the 
strategic priorities of the 2001 QDR. 

Future QDRs will be affected by the new reporting elements added to the 
QDR legislation by the John Warner National Defense Authorization Act 
for Fiscal Year 2007.[Footnote 15] Specifically, the legislation 
requires DOD to establish an independent review panel to conduct an 
assessment of the QDR no later than 6 months before the date that DOD's 
report on the QDR is submitted to Congress. The panel is required to 
submit, within 3 months after the date on which the QDR is submitted, 
an assessment of the review, including its recommendations, the stated 
and implied assumptions incorporated in the review, and the 
vulnerabilities of the strategy and force structure underlying the 
review. The legislation also specifies that the QDR review should not 
be constrained to comply with the budget submitted to Congress by the 
President. In addition, the legislation added several specific issues 
that DOD is required to address such as providing the specific 
capabilities, including the general number and type of specific 
military platforms, needed to achieve the strategic and warfighting 
objectives. Lastly, the authorization act directs DOD to submit to the 
Senate and House Armed Services Committees a report on the 
implementation of recommendations identified in the 2006 QDR report no 
later than 30 days after the end of each fiscal year quarter.[Footnote 
16] (See app. III for a summary of additions to the QDR legislation, 10 
U.S.C. �8 as a result of the John Warner National Defense 
Authorization Act for Fiscal Year 2007.) 

DOD considers the 2006 QDR a refinement of its predecessor 2001 QDR, 
which detailed the department's intent to shift the basis of defense 
planning from the long-standing "threat-based" model, which focused on 
specific adversaries and geographic locations, to a "capabilities- 
based" construct that seeks to prepare for a range of potential 
military operations against unknown enemies. According to the 2001 QDR 
report, the capabilities-based model focuses on how an adversary might 
fight rather than specifically who the adversary might be or where the 
war might occur. 

The Under Secretary of Defense (Policy) had the lead role in conducting 
the 2006 QDR. The Joint Staff played a supporting role in the process 
and had primary responsibility for leading the analytical work to 
support the Chairman of the Joint Chief of Staff's risk assessment. In 
March 2005, the Secretary of Defense approved guidance, called the 
Terms of Reference, for the review. The Terms of Reference identified 
four focus areas and provided guidance to senior officials to develop 
capabilities and make investment decisions to shape the future force 
and reduce risks in these areas. The four focus areas were 1) defeating 
terrorist networks, 2) defending the homeland in depth, 3) shaping the 
choices of countries at strategic crossroads, and 4) preventing hostile 
states and nonstate actors from acquiring or using weapons of mass 
destruction. During the spring of 2005, DOD senior leaders held 
meetings on the focus areas with interagency partners from across the 
federal government and international allies to identify the potential 
threats and the types of capabilities needed to address the challenges 
associated with the focus areas. Officials from the intelligence 
community, such as the Defense Intelligence Agency, provided threat 
assessments for each of the focus areas. 

The Terms of Reference also established six study teams to assess 
capabilities associated with the QDR focus areas and directed the teams 
to develop options to reduce risk in these areas. Top-level civilian 
and military leaders from OSD and Joint Staff led the study teams, 
which included officials from the services and Combatant Commands. The 
Deputy Secretary of Defense and the Vice Chairman of the Joint Chiefs 
of Staff co-chaired a senior level group, which was eventually referred 
to as the Deputy's Advisory Working Group, and this group reviewed the 
work of the study teams during the summer and fall of 2005. Other 
members of the review group included the Under Secretaries of Defense, 
the services' Under Secretaries, the services' Vice Chief of Staffs, 
and the Deputy Commander, U.S. Special Operations Command. The Deputy 
Secretary and his working group determined what information each study 
team would provide to the senior-level review group, which was led by 
the Secretary of Defense. Figure 1 shows the structure that OSD 
established to conduct the QDR. 

Figure 1: Organizational Structure for the Development of the 2006 QDR: 

[See PDF for image] 

Source: DOD. 

[End of figure] 

According to the 2006 QDR report, the foundation of this QDR is the 
National Defense Strategy, published in March 2005. The Secretary of 
Defense's National Defense Strategy is implemented through the National 
Military Strategy, which is developed by the Chairman of the Joint 
Chiefs of Staff. The National Military Strategy provides focus for 
military activities by defining a set of interrelated military 
objectives from which the service chiefs and combatant commanders 
identify desired capabilities and against which the Chairman of the 
Joint Chiefs of Staff assesses risk. 

The QDR's Approach Had Several Strengths but Analytical Weaknesses 
Limited Its Usefulness in Assessing Force Structure, Personnel 
Requirements, and Risk: 

While DOD's approach and methodology for the 2006 QDR had several 
strengths, several weaknesses significantly limited the review's 
usefulness in addressing force structure, personnel requirements, and 
risk associated with executing the national defense strategy. On the 
positive side, the 2006 QDR benefited from the sustained involvement of 
key senior DOD officials, interagency and allied participation, and 
internal collaboration among the QDR's participants. However, 
weaknesses in the assessment of three key areas--force structure, 
personnel requirements, and risk--hampered DOD's ability to undertake a 
fundamental reassessment of the national defense strategy and U.S. 
military forces. As a result of these weaknesses, Congress lacks 
assurance that DOD has conducted the analysis needed to determine the 
force best suited to implement the defense strategy. Further, DOD is 
not well positioned to demonstrate to Congress how it considered risks 
and made difficult trade-offs among its capabilities to balance 
investments within future budgets, given the nation's fiscal 
challenges. 

Senior Leadership Involvement, Interagency and Allied Participation, 
Internal Collaboration, and a System to Monitor Implementation Provided 
Benefits: 

DOD's approach for the 2006 QDR benefited from several strengths. 
First, key senior DOD leaders maintained sustained involvement 
throughout the review. As we have noted in previous reports,[Footnote 
17] best practices clearly indicate that top-level leadership is 
crucial for engineering major changes in an organization. Top leaders 
establish the framework for change and provide guidance and direction 
to others to achieve change. During the 2006 QDR process, the Deputy 
Secretary of Defense and the Vice Chairman of the Joint Chiefs of Staff 
co-chaired a senior level review group, now referred to as the Deputy's 
Advisory Working Group, to review and approve initiatives of varying 
complexity presented by the six study team leaders and leaders of 
specialized issue areas, such as special operations forces. According 
to an official in the Office of the Secretary of Defense, during most 
of the QDR process, this senior level group met several times a week to 
review the study teams' options and provide guidance to the teams to 
ensure that the QDR's strategic priorities were addressed. Since the 
QDR report was issued in February 2006, the Deputy's Advisory Working 
Group continues to meet regularly to oversee implementation of the 
QDR's strategic priorities, such as improving DOD's management 
structures and business processes to support effective decision making. 

Second, DOD collaborated with interagency partners, such as the 
Department of Homeland Security, and U.S. international allies, such as 
the United Kingdom, to discuss potential strategic challenges and 
determine capabilities that are required to meet current and future 
challenges. According to DOD officials, senior officials from the 
Department of Homeland Security including the U.S. Coast Guard and the 
Departments of Energy, State, and other federal agencies participated 
in DOD's discussions establishing the strategic direction of the QDR 
during the spring of 2005. U.S. agency officials discussed with DOD 
officials the types of capabilities and investments needed to reduce 
risk in the QDR's four focus areas--defeating terrorist networks, 
defending the homeland in depth, shaping the choices of countries at 
strategic crossroads, and preventing hostile states and nonstate actors 
from acquiring or using weapons of mass destruction. For example, DOD 
officials who coordinated the QDR stated that U.S. Coast Guard 
officials identified current and planned maritime defense capabilities 
as part of DOD's discussion on combating weapons of mass destruction. 
Further, officials from U.S. allies, such as the United Kingdom, 
participated in the discussions to share their perspectives about how 
DOD, its allies, and global partners could address the nontraditional, 
asymmetric warfighting challenges of the 21st century, such as 
preventing the acquisition or use of weapons of mass destruction by 
nonstate actors. As a result of contributions from the interagency 
partners and allies, DOD was in a better position to identify and 
develop the four focus areas that eventually shaped the scope of the 
QDR. 

Third, leaders of the six study teams collaborated with each other to 
avoid duplication of work as they developed options to address 
challenges associated with the focus areas. The study team leaders held 
weekly meetings to discuss whether their issues could be better 
addressed by another study team, the progress of their work plans, and 
whether they could provide each other with mutually supporting 
analysis. Further, a group of senior officials, led by an official in 
the Office of the Secretary of Defense for Policy, attended the study 
teams' weekly meetings to ensure that the options addressed the 
capabilities associated with the four focus areas and helped identify 
overlaps or gaps in the development of options. For example, three 
study teams, which developed and identified options related to force 
structure, personnel requirements, and roles and missions respectively, 
coordinated their work to minimize any overlap and identify any gaps in 
the development of options to increase the number of military and 
civilian personnel proficient in key languages such as Arabic, Farsi, 
and Chinese. 

Fourth, following the release of the 2006 QDR, the Deputy Secretary of 
Defense requested that officials in OSD establish procedures to track 
the implementation of the 2006 QDR initiatives which encompassed a 
range of military capabilities, from implementing its new personnel 
management system to developing a new land-based, penetrating long- 
range strike capability by 2018. Senior officials from the Office of 
the Director, Administration and Management created a departmentwide 
database and established criteria to categorize the implementation 
status of each initiative. Specifically, implementation of an 
initiative was categorized as "completed" if the initiative was fully 
implemented or if DOD had taken actions that officials determined as 
having met the intent of the initiative, even though the initiative may 
take years to fully implement. OSD officials have provided periodic 
briefings on the status of QDR initiatives to the Deputy Secretary of 
Defense and his advisory group since the publication of the 2006 QDR 
report. DOD reported to Congress in January 2007 that it had completed 
implementation of about 90, or 70 percent, of the 130 
initiatives.[Footnote 18] Further, in January 2006 at the end of the 
QDR process, the Deputy Secretary of Defense identified eight study 
areas and established a process to continue developing DOD's approaches 
for the issues associated with these study areas.[Footnote 19] 
According to senior DOD officials, these areas identified for post-QDR 
study were generally complex and involved multiple organizations, such 
as developing interoperable strategic communications.[Footnote 20] The 
Deputy Secretary provided guidance for the teams that included 
requirements to (1) define objectives, timelines, and performance 
metrics and (2) establish an oversight process as part of an 
implementation plan to ensure the decisions made during the QDR were 
achieved. According to DOD officials, DOD plans to provide Congress 
with information about the status of the post-QDR study teams' 
implementation in its quarterly reports. For example, in DOD's January 
2007 report to Congress, DOD reported that one of the Institutional 
Reform and Governance study team's objectives is to continue developing 
concepts and overseeing initiatives related to reforming governance and 
management functions such as capabilities-based planning. 

Weaknesses in Assessment of Force Structure, Personnel Requirements, 
and Risk Limited the QDR's Usefulness in Linking Force Structure to the 
Defense Strategy and Addressing Affordability Challenges: 

Weaknesses in the assessment of three key areas--force structure, 
personnel requirements, and risk--significantly limited the review's 
usefulness in reassessing the force structure best suited to implement 
the defense strategy at low-to-moderate level of risk, which is a key 
requirement of the review. Our previous reporting on DOD's prior QDRs 
and other work has shown that weaknesses in establishing a substantive 
basis for force structure, personnel requirements, and risk have been 
long-standing issues for the department. Further, until DOD can 
demonstrate an analytical basis for its force structure and personnel 
requirements, it will not be well-positioned to balance capability 
needs within budgets that are likely to be constrained in the future, 
given the nation's fiscal challenges. 

DOD Did Not Conduct a Comprehensive, Integrated Analysis of Alternative 
Force Structures Using a Capabilities-Based Approach: 

Although the 2006 QDR study guidance emphasized that DOD would use 
capabilities-based planning to focus on how a range of potential 
enemies might fight, DOD did not conduct a comprehensive, integrated 
assessment of alternative force structures during the QDR using a 
capabilities-based approach. Based on our discussions with DOD 
officials and our review of DOD documents and non-DOD published 
studies, a capabilities-based approach requires a common understanding 
of how a capability will be used, who will use it, when it is needed, 
and why it is needed. Further, each capability should be assessed based 
on the effects it seeks to generate and the associated operational 
risk[Footnote 21] of not having the capability. A capabilities-based 
approach also seeks to identify capability gaps[Footnote 22] or 
redundancies and make trade-offs among the capabilities in order to 
efficiently use fiscal resources. In table 1 we identify several key 
elements of a capabilities-based planning approach and provide 
descriptions of these elements. 

Table 1: Key Elements of Capabilities-Based Planning: 

(Continued From Previous Page) 

Key element: Establish an organizational structure; 
Description: 
* Identify roles, responsibilities, and organizational changes; 
* Establish methods for recording and communicating decisions and 
tracking their execution. 

Key element: Establish an analytic framework; 
Description: 
* Use traceable and analytically-based data, information sources, and 
standards consistently when conducting assessments; 
* Refine and further develop an approach to assess risk. 

Key element: Develop a national defense strategy; 
Description: 
* Identify strategic goals so capabilities can be developed to support 
these goals. 

Key element: Develop a wide range of specific and generic threats; 
Description: 
* Identify potential threats by using intelligence sources, strategic 
studies, and professional military experience. 

Key element: Develop a wide range of scenarios; Description: 
* Develop scenarios that address various time frames and do not solely 
focus on one or two major conventional campaigns; 
* Ensure that the scenarios challenge the force and do not simplify 
existing weaknesses and problems, e.g., do not assume that overseas 
locations have a developed infrastructure; 
* Identify the capabilities that are needed to perform missions 
outlined in the scenarios. 

Key element: Conduct a capability survey; Description: 
* Identify the capabilities within the existing and planned force; 
* Identify any gaps or excesses. 

Key element: Develop capability options; Description: 
* Perform comprehensive assessments to determine trade-offs among the 
capabilities, such as identifying which capabilities can be substituted 
with other capabilities; 
* Link capability options to strategic goals to determine whether the 
goals are being addressed; 
* Assess the risk of each trade-off using a data-driven approach; 
* Prioritize the best balance of investment across major capability 
areas. 

Key element: Link capability solutions to well-defined budget, 
acquisition, performance plans; 
Description: 
* Identify the near-and long-term budgetary implications for the 
capability options; 
* Develop detailed acquisition plans; 
* Establish mechanisms to establish clear authority and accountability, 
milestones, and performance measures. 

Source: GAO analysis of DOD and non-DOD capabilities-based planning 
studies. 

[End of table] 

DOD's primary basis for assessing the overall force structure best 
suited to implement the national defense strategy, according to several 
DOD officials, was a Joint Staff-led study known as Operational 
Availability 06. The study compared the number and types of units in 
DOD's planned force structure to the operational requirements for 
potential scenarios to determine whether and to what extent the planned 
force structure would experience shortages. However, the Joint Staff's 
Operational Availability 06 Study did not assess alternatives to 
planned force structures and evaluate trade-offs among capabilities. 

In conducting the Operational Availability 06 Study, the Joint Staff 
completed two different analyses. The first analysis, referred to as 
the base case, relied on a set of operational scenarios that created 
requirements for air, ground, maritime, and special operations forces. 
During this study, the Joint Staff examined requirements for a broad 
range of military operations over a 7-year time frame. Two overlapping 
conventional campaigns served as the primary demand for forces with 
additional operational demands created by 23 lesser contingency 
operations, some of which represented the types of operations that 
military forces would encounter while defending the homeland and 
executing the war on terrorism. The Joint Staff then compared the 
number of military units in DOD's planned air, ground, maritime, and 
special operations forces to the operational demands of the scenarios. 
The Joint Staff made two key assumptions during the analysis. First, 
the Joint Staff assumed that reserve component units could not deploy 
more than once in 6 years. Second, the Joint Staff assumed that while 
forces within each service could be reassigned or retrained to meet 
shortfalls within the force structure, forces could not be substituted 
across the services.[Footnote 23] Results of the Joint Staff's first 
analysis showed that maritime forces were capable of meeting 
operational demands and air, ground, and special operations forces 
experienced some shortages. 

In response to a tasking from top-level officials the Joint Staff 
performed a second analysis that developed a different set of 
operational demands reflecting the high pace of operations in Iraq. In 
this analysis, the Joint Staff used the same 2012 planned force 
structure that was examined in the first analysis. When it compared the 
operational demands that were similar to those experienced in Iraq with 
DOD's planned force structure, the Joint Staff found that the air, 
ground, maritime, and special operations forces experienced shortages 
and they could only meet operational demands for a security environment 
similar to Iraq, one conventional campaign, and 11 of the 23 lesser 
contingency scenarios. 

While the Operational Availability 06 Study had some benefits, several 
weaknesses significantly limited the study's usefulness for integrating 
a capabilities-based approach that assessed force structure options. On 
the positive side, top leaders maintained sustained involvement in the 
Operational Availability Study; for example, based on their guidance, 
the Joint Staff conducted a second analysis that depicted operational 
demands, which more accurately represented the current security 
environment. That study demonstrated that significant shortages in 
military forces exist when forces are not retrained or reassigned to 
meet operational demands. However, weaknesses in the study's 
methodology to assess different levels of force structure and use a 
capabilities-based planning approach limited the study's usefulness in 
reassessing the fundamental relationship between the national defense 
strategy and the force structure best suited to implement the strategy. 
First, the Joint Staff did not vary the number and types of units to 
demonstrate that it assessed different levels or mixes of air, ground, 
maritime, and special operations force structure in its second 
analysis. Second, the Joint Staff did not identify capabilities of the 
force structure and make recommendations about trade-offs among 
capabilities. 

Further, concurrent with the Operational Availability 06 Study, DOD 
conducted separate assessments of some segments of its force structure 
to inform decisions about investments for capabilities. For example, 
DOD conducted a departmentwide study that assessed options about 
different levels and types of tactical air assets, such as the Joint 
Strike Fighter. However, in this study DOD did not fully address 
whether and to what extent future investment plans are affordable 
within projected funding levels, and in April 2007, we reported that 
DOD does not have a single, comprehensive, and integrated investment 
plan for recapitalizing and modernizing fighter and attack 
aircraft.[Footnote 24] In another example, DOD also conducted a study 
to determine whether ground forces in the Army, Marine Corps, and 
Special Operations Command could meet operational demands for a broad 
range of scenarios without relying extensively on reserve 
personnel.[Footnote 25] However, options to increase ground forces were 
not part of the study's scope, and the implications of the ongoing 
operations in Iraq, such as the number of active brigade combat teams 
that would be needed and their length of time in theater, were not 
fully considered.[Footnote 26] 

A key reason why DOD did not use an integrated capabilities-based 
approach to assessing force structure options is that DOD did not have 
a unified management approach to implement capabilities-based planning 
principles into the QDR assessment. At the time of the QDR, no one 
individual or office had been assigned overall responsibility and 
authority necessary for implementing an integrated capabilities-based 
planning approach. Further, DOD had not provided comprehensive written 
guidance to implement departmentwide methods for capabilities-based 
planning that specifies the need to identify capabilities at the 
appropriate level of detail, identify redundant or excess capabilities 
that could be eliminated, facilitate trades among capabilities, assess 
and manage risk, and balance decisions about trade-offs with near-and 
long-term costs. Currently, DOD is undertaking some initiatives related 
to capabilities-based planning. However, these select initiatives do 
not represent the type of comprehensive, unified management approach 
needed to assess the force structure requirements to address a range of 
potential military operations against unknown enemies. For example: 

* The Joint Staff initiated the Joint Capabilities Integration and 
Development System in 2003 to assess gaps in joint capabilities and 
recommend solutions to resolve those gaps. Under this system, boards 
comprised of high-level DOD civilians and military officials are 
convened to identify future capabilities needed in key functional 
areas, such as battle space awareness, and to make recommendations 
about trade-offs among air, space, land, and sea platforms. While this 
process may be important to assess gaps in joint warfighting 
capabilities, we have reported that its focus is to review and validate 
the initial need for proposed capabilities. However, we have also 
reported that the process is not yet functioning as envisioned to 
define gaps and redundancies in existing and future military 
capabilities across the department and to identify solutions to improve 
joint capabilities.[Footnote 27] Further, we reported that programs 
assessed by the Joint Staff's process build momentum and move toward 
starting product development with little if any early department-level 
assessment of the costs and feasibility.[Footnote 28] According to 
senior DOD officials, the Joint Staff's process does not thoroughly 
link capabilities to the strategic priorities identified in the QDR. 

* The Deputy Secretary of Defense tasked the Institutional Reform and 
Governance post-QDR study team to develop departmentwide approaches 
that would allow DOD to integrate and facilitate its capabilities-based 
planning initiatives. Based on the study team's work, in March 2007 the 
Deputy Secretary of Defense tasked several DOD organizations to develop 
plans to facilitate a capabilities-based planning approach. For 
example, the Joint Requirements Oversight Council is tasked with 
developing a process for identifying capability priorities and gaps at 
the appropriate level of detail and ranking all capabilities from high 
to low priority by October 2007. Further, the Deputy Secretary of 
Defense has reaffirmed the department's commitment to portfolio 
management and expanded the scope of responsibility for the four 
capability portfolio test case managers.[Footnote 29] Among their new 
responsibilities, each portfolio manager is required to provide the 
Deputy's Advisory Working Group with an independent portfolio 
assessment to inform investment decisions during DOD's fiscal year 2009 
program review. DOD may establish more portfolios as the roles and 
responsibilities of the existing managers evolve and operate in DOD's 
existing decision processes, such as the Deputy's Advisory Working 
Group. 

DOD made some changes to the current force structure to address 
perceived gaps in capabilities based on the QDR review, although these 
did not represent major changes to the composition of the existing 
force structure. For example, among the key force-structure-related 
decisions highlighted in the QDR were to (1) increase Special 
Operations forces by 15 percent and the number of Special Forces 
Battalions by one-third; (2) expand Psychological Operations and Civil 
Affairs units by 3,700 personnel, a 33 percent increase; (3) develop a 
new land-based penetrating long-strike capability to be fielded by 2018 
and fully modernize the current bomber force (B-52s, B-1s, and B-2s); 
and (4) decrease the number of active component brigade combat teams 
from 43 to 42 and the number of planned Army National Guard brigade 
combat teams from 34 to 28. In January 2007--about a year after the QDR 
was completed--DOD approved the Army's plan to increase the number of 
active component brigade combat teams to 48. Since DOD did not conduct 
a comprehensive, data-driven assessment of force structure alternatives 
during the QDR, it is not in the best position to assure itself or 
Congress that it has identified the force best suited to execute the 
national defense strategy. 

DOD Did Not Conduct a Thorough Review of Personnel Requirements: 

Although DOD concluded in the 2006 QDR report that the size of today's 
forces--both the active and reserve components across all four military 
services--was appropriate to meet current and projected operational 
demands, it did not provide a clear analytical basis for its 
conclusion. In January 2007, the Secretary of Defense announced plans 
to permanently increase the size of the active component Army and the 
Marine Corps by a total of 92,000 troops over the next 5 years. But 
again, DOD did not identify the analysis that it used to determine the 
size of the increase. In February 2005,[Footnote 30] we recommended 
that DOD review active personnel requirements as part of the QDR, and 
in doing so, discuss its conclusions about the appropriate personnel 
levels for each of the services and describe the key assumptions 
guiding the department's analysis, the methodology used to evaluate 
requirements, and how the risks associated with various alternative 
personnel force levels were evaluated. While DOD agreed with our 
recommendation, it did not perform a comprehensive, data-driven 
analysis of the number of personnel needed to implement the defense 
strategy as part of its 2006 QDR. Until DOD performs a comprehensive 
review of personnel requirements, it cannot effectively demonstrate to 
Congress a sound basis for the level of military and civilian personnel 
it requests. 

Our prior work has shown that valid and reliable data about the number 
of personnel required to meet an agency's needs are critical because 
human capital shortfalls can threaten an organization's ability to 
perform missions efficiently and effectively.[Footnote 31] Data-driven 
decision making is one of the critical factors in successful strategic 
workforce management. High-performing organizations routinely use 
current, valid, and reliable data to inform decisions about current and 
future workforce needs, stay alert to emerging mission demands, and 
remain open to reevaluating their human capital practices. Further, 
federal agencies have a responsibility to provide thorough analytical 
support over significant decisions affecting requirements for federal 
dollars so that Congress can effectively evaluate the benefits, costs, 
and risks. 

Rather than conducting a comprehensive assessment of its personnel 
requirements, DOD's approach to active and reserve military personnel 
and civilian personnel levels was to limit growth and initiate efforts 
to use current personnel levels more efficiently. Consequently, the 
study team that was assigned to review issues related to manning and 
balancing the force took the existing force size as a given. From that 
basis, the study team identified alternative courses of action for 
changing the mix of specific skills, such as civil affairs, in the 
active and reserve components to meet future operational requirements. 
The team also considered whether changes in the mix of skills would 
require more military and civilian personnel at headquarters staffs. 
While these reviews are important for understanding how to use the 
force more efficiently, they cannot be used to determine whether U.S. 
forces have enough personnel to accomplish missions successfully 
because these reviews did not systematically assess the extent to which 
different levels of end strength could fill DOD's combat force 
structure and provide institutional support at an acceptable level of 
risk. 

Although DOD's 2006 QDR concluded that the Army and Marine Corps should 
plan to stabilize their personnel levels at 482,400 and 175,000 active 
personnel respectively, by 2012, in February 2007 the President's 
fiscal year 2008 budget submission documented a plan to permanently 
increase the size of the active components of the Army by 65,000 to 
547,400 and the Marine Corps by 27,000 to 202,000 over the next 5 
years; and the Army National Guard by 8,200 to 358,200 and the U.S. 
Army Reserve by 6,000 to 206,000 by 2013. Shortly after the increase 
was announced, we testified before Congress[Footnote 32] that DOD's 
record in providing an analytically driven basis for requested military 
personnel levels needs to be improved and suggested that Congress 
should carefully weigh the long-term costs and benefits in evaluating 
DOD's proposal for the increases. Both the Army and Marine Corps are 
coping with additional demands that were not fully reflected in the 
QDR. For example, the Marine Corps decided to initiate a new study to 
assess active military personnel requirements shortly after the 2006 
QDR was completed due to its high pace of operations and the QDR- 
directed changes in force structure, such as establishing a Special 
Operations Command requiring about 2,600 military personnel. Without 
performing a comprehensive analysis of the number of personnel it 
needs, DOD cannot ensure that its military and civilian personnel 
levels reflect the number of personnel needed to execute the defense 
strategy. Further it cannot ensure that it has a sufficient basis for 
understanding the risks associated with different levels of military 
and civilian personnel. For example, while too many active military 
personnel could be inefficient and costly, having too few could result 
in other negative consequences, such as the inability to provide the 
capabilities that the military forces need to deter and defeat 
adversaries. 

DOD Did Not Conduct an Analytically Sound Risk Assessment of Its 
Proposed Force Structure: 

During the 2006 QDR, the risk assessments conducted by the Secretary of 
Defense and the Chairman of the Joint Chiefs of Staff did not fully 
apply DOD's risk management framework to demonstrate how risks 
associated with its proposed force structure were evaluated.[Footnote 
33] DOD introduced its risk management approach in 2001; however, we 
have reported that it has faced difficulty implementing this 
approach.[Footnote 34] For example, we found that DOD faced challenges 
in integrating its risk management framework and reform initiatives 
into a unified management approach. We have reported that an emerging 
challenge for the federal government involves the need for completion 
of comprehensive national threat and risk assessments in a variety of 
areas.[Footnote 35] For example, evolving requirements from the 
changing security environment, coupled with increasingly limited fiscal 
resources across the federal government, emphasize the need for 
agencies to adopt a sound approach to establishing resource decisions. 
We have advocated that the federal government, including DOD, adopt a 
comprehensive risk management approach as a framework for decision 
making that fully links strategic goals to plans and budgets, assesses 
values and risks of various courses of actions as a tool for setting 
priorities and allocating resources, and provides for the use of 
performance measures to assess outcomes.[Footnote 36] A risk management 
approach represents a series of analytical and managerial steps that 
can be used to assess risk, evaluate alternatives for reducing risks, 
choose among those alternatives, implement the alternatives, monitor 
their implementation, and that incorporate new information to adjust 
and revise the assessments and actions, as needed. Further, such a data-
driven risk assessment can provide a guide to help shape, focus, and 
prioritize investment decisions to develop capabilities. 

A key reason why DOD did not apply its risk framework during the QDR is 
that it had difficulty in developing department-level measures that 
would be necessary to assess risk and as a result, the assessment tools 
were not available for use during the QDR. The QDR's study guidance 
tasked the QDR coordination group, led by officials in the Office of 
the Under Secretary of Defense (Policy), to review the QDR risk 
management guidelines and provide these guidelines to the QDR's study 
teams for review. The guidelines were to provide some examples of how 
to measure performance related to DOD's key areas identified in its 
framework--operational, force management, institutional, and future 
challenges. The QDR coordination group was to incorporate the study 
teams' feedback about recommended changes. Lastly, the QDR coordination 
group was to issue the guidelines and monitor the application of 
performance measures during the QDR. According to an official in the 
Office of the Under Secretary of Defense (Policy), the QDR coordination 
group had difficulty developing the measures and thus did not issue 
guidelines. As a result, the study teams did not have the assessment 
tools to assess risk during the QDR. 

Since department-level measures for assessing risk were not available 
during the 2006 QDR, several of the study teams relied primarily on 
professional judgment to assess the risks of not investing in various 
capabilities. For example, the study team responsible for developing 
capabilities told us that they examined information about potential 
future threats and determined that DOD needed medical countermeasures 
to address the threat of genetically engineered biological agents. 
Members of the study team discussed the consequences of not developing 
the medical procedures and treatments that would be needed to increase 
survival rates if U.S. military personnel were to encounter the highly 
advanced genetic material. Further, the Chairman of the Joint Chiefs of 
Staff was not tasked to use the risk management framework in assessing 
risks and did not choose to use it in his assessment. Rather, the 
Chairman's assessment examined the extent to which the 2006 QDR 
initiatives would address combatant commanders' operational needs for 
potential future requirements. 

Without a sound analytical approach to assess risk during future QDRs, 
DOD will not have a sufficient basis to demonstrate how the risks 
associated with the capabilities of its proposed force structure were 
evaluated. Further, DOD may be unable to demonstrate how it will manage 
risk within current and expected resource levels. Without an 
analytically based risk assessment, DOD may not be able to prioritize 
and focus the nation's investments to combat 21st century security 
threats efficiently and wisely. 

Options for Modifying Some Legislative Requirements Could Improve 
Usefulness of Future QDRs: 

The security environment of the 21st century has been characterized by 
conflicts that are very different from traditional wars among states. 
This environment has created the need for DOD to reexamine the 
fundamental operations of the department and the capabilities needed to 
continue to execute its missions. In addition, DOD has created new 
organizations, such as the U.S. Northern Command and the Assistant 
Secretary of Defense for Homeland Defense, to counter new threats to 
the homeland and support the federal response to any potential 
catastrophic event, natural, or man-made. Through our discussions with 
defense analysts, we have identified options for modifying several QDR 
legislative requirements that could be considered in light of the 
changed security environment, to make the QDR process and report more 
useful to Congress and DOD. The QDR legislation contains numerous 
issues for DOD to address, some that require reporting on broad issues, 
such as the national defense strategy and the force structure needed to 
execute that strategy, and some that are more detailed, such as the 
requirement that DOD examine the appropriate ratio of combat forces to 
support forces under the national defense strategy. Many defense 
analysts we spoke with thought some of the strategic issues are of 
great importance and should remain for future QDRs. Further, they 
believe DOD should focus its efforts on providing more information on 
the analytic basis for its key assumptions and strategic planning 
decisions. However, they also asserted that several of the QDR's 
detailed reporting elements detract attention from strategic issues, 
are already required and reported under other laws, or are no longer 
relevant in the new security environment. Options to improve the 
usefulness of future QDRs include (1) clarifying expectations for how 
the QDR should address the budget plan, (2) eliminating some reporting 
elements for the QDR legislation that could be addressed in different 
reports, (3) eliminating some reporting elements in the QDR legislation 
for issues that may no longer be as relevant due to changes in the 
security environment, and (4) establishing an independent advisory 
group to work with DOD prior to and during the QDR to provide 
alternative perspectives and analyses. 

Strategic Focus of Some QDR Legislative Requirements Is Considered 
Useful for Establishing Defense Plans and Programs: 

Several defense analysts we spoke with asserted that the permanent 
requirement for DOD to conduct a comprehensive strategic review of the 
defense program every 4 years is important and that Congress should 
continue to require that DOD conduct future QDRs. Moreover, several 
defense analysts acknowledge that certain key requirements remain 
critical to the QDR's purpose of fundamentally reassessing the defense 
strategy and program. Specifically, the requirements that task the 
Secretary of Defense to (1) delineate a defense strategy and (2) define 
sufficient force structure, force modernization, budget plan, and other 
elements of a defense program that could successfully execute the full 
range of missions called for by the defense strategy at low to medium 
risk over 20 years were seen as critical elements needed to ensure that 
Congress understands DOD's strategies and plans. Several defense 
analysts told us that it is in the national interest to ensure that DOD 
conducts the kind of long-range strategic planning that can provide 
meaningful recommendations for meeting future national security 
challenges and that enables debate on the costs and benefits of 
requirements for future military and capabilities as well as risks in 
capability gaps in light of national fiscal challenges. 

The QDR legislation also directs DOD to define the nature and magnitude 
of the political, strategic, and military risks associated with 
executing the missions called for under the national defense strategy 
in the QDR and include a comprehensive discussion of the force 
structure best suited to implement that strategy at low-to-moderate 
level of risk. Analysts saw these areas as important for DOD to provide 
Congress the assurance that there is a sound analytical basis for its 
risk assessment that includes how DOD identified risks and evaluated 
alternatives for reducing risks. Additionally, analysts viewed this 
discussion as important in assuring that the department has 
incorporated a variety of perspectives in its risk assessments. Some 
analysts stated that the requirements to discuss the assumed or defined 
national security interests, the threats to the assumed or defined 
national security interests, and the scenarios developed in the 
examination of those threats are several key elements that should 
remain to enable the department to demonstrate that principles of risk 
assessment have been addressed. Similarly, analysts suggest that the 
Chairman of the Joint Chiefs of Staff's requirement to assess the 
results of the QDR review, including an independent assessment of risk, 
is helpful to provide another assessment that DOD and Congress can use 
to understand the risks associated with the force structure and 
consider the courses of actions the department might want to take to 
reduce risks. 

Legislative Options Are Available to Improve Usefulness of Future QDRs: 

Some DOD defense analysts told us that the QDR legislation includes 
numerous detailed requirements that may impede DOD's focus on high- 
priority areas. Based on our discussions with analysts, we identified 
several options that Congress should consider to enhance the focus of 
future QDRs on high-priority issues and improve the thoroughness of 
DOD's analysis: 

* Clarify expectations for how the QDR should address the budget plan 
that supports the national defense strategy. The QDR legislation has 
several reporting elements that relate to budget planning to support 
the defense strategy. First, the QDR legislation requires DOD "to 
delineate a national defense strategy�" and "to identify the budget 
plan that would be required to provide sufficient resources to execute 
successfully the full range of missions called for in that national 
defense strategy at a low-to-moderate level of risk."[Footnote 37] 
Second, the legislation requires DOD "to conduct a comprehensive 
examination卭f the national defense strategy厀ith a view toward 
establishing a defense program for the next 20 years." Third, based on 
recent changes to the legislation that will apply to the next QDR in 
2010 as well as future QDRs, DOD is required to "make recommendations 
that are not constrained to comply with the budget submitted to 
Congress by the President." 

Some defense analysts raised concerns about whether these reporting 
requirements provide sufficient and clear guidance for DOD to use in 
conducting QDRs. For example, they questioned whether the planning time 
frame of 20 years established by the QDR legislation is most useful in 
providing Congress with information to perform its oversight of the 
defense program. Although DOD officials and defense analysts 
acknowledged the benefits of forecasting threats and capabilities for a 
20-year period, they stated it would be difficult to develop a detailed 
budget plan for a 20-year period given the uncertain nature of threats 
in the new security environment. Further, analysts asserted that rather 
than enabling DOD to set strategic priorities without regard to current 
budgets, the requirement to "make recommendations that are not 
constrained to comply with the budget.," could lead the services and 
the capability portfolio managers to push for inclusion of every 
program in their plans. This could make it more difficult for DOD to 
prioritize investments to meet key capability needs and assess the 
affordability of new capabilities across the department. 

Moreover, DOD's three QDR reports since 1997 have not fully described 
DOD's methodology or approach for assessing its budget needs or budget 
plans that explained how DOD intended to fund the full range of 
missions called for in the national defense strategy. For the 2006 QDR, 
DOD included several QDR initiatives in the President's fiscal year 
2007 budget that was submitted to Congress at the same time as the QDR 
report but stated that it would continue to define a budget plan for 
the QDR by identifying the funding details in DOD's future years 
defense program for fiscal years 2008 through 2013. In addition, the 
report did not provide information about the extent to which DOD 
considered the long-term affordability of the overall defense program. 
We have emphasized in previous reports that the federal government now 
faces increasing fiscal challenges, and DOD may face increasing 
competition for federal dollars.[Footnote 38] Further, in November 
2005, we reported that DOD has not demonstrated discipline in its 
requirements and budgeting processes, and its costly plans for 
transforming military operations and expensive acquisitions may not be 
affordable in light of the serious budget pressures facing the 
nation.[Footnote 39] For example, we reported that DOD's planned annual 
investment in acquisition programs it has already begun is expected to 
rise from $149 billion in fiscal year 2005 to $178 billion in fiscal 
year 2011. Given these pressures, Congress may want a clearer view of 
how DOD should budget for the capabilities associated with the proposed 
force structure, and how it evaluated the trade-offs in capabilities to 
maximize the effectiveness of future investments. If Congress decides 
that it needs additional budget-related information to carry out its 
oversight of future QDRs, then it might consider clarifying the 
reporting element relating to the required budget plan to specify what 
information DOD should include in the QDR. Further, Congress may want 
to consider clarifying its expectations for the information DOD 
provides in the QDR as to how it has addressed the long-term 
affordability challenges of transforming military operations. 

* Eliminate some reporting elements in the QDR legislation for issues 
that could be addressed in different reports. According to some defense 
analysts, some requirements contained in the QDR legislation are not 
essential to the strategic purpose of the QDR and may divert DOD's 
focus from that strategic purpose. While important, some reporting 
elements are already examined in other DOD reviews, and Congress has 
access to the results of these periodic reviews. These reporting 
elements include the following: 

- An evaluation of "the strategic and tactical airlift, sealift, and 
ground transportation capabilities required to support the national 
defense strategy." In November 2002 we reported that the QDR may not be 
the appropriate venue for addressing mobility issues because 
examination of this issue requires detailed analysis that can best be 
conducted after DOD decides on a defense strategy, identifies a range 
of planning scenarios consistent with the new strategy, and completes 
its detailed analysis of requirements for combat forces.[Footnote 40] 
Furthermore, DOD routinely conducts analyses of its mobility 
requirements outside of the QDR process, according to DOD officials. 
Since 1992, DOD has issued four major analyses of the U.S. military 
strategic lift requirements: the 1992 Mobility Requirements Study, 
Bottom Up Review; the 1995 Bottom Up Review Update; the 2001 Mobility 
Requirements Study--2005, issued in 2001; and the Mobility Capability 
Study, issued in 2005. 

- An assessment of the "advisability of revisions to the Unified 
Command Plan as a result of the national defense strategy." DOD has a 
process for assessing the Unified Command Plan and is required to 
report changes to the plan to Congress under other legislation. 
Specifically, the Chairman of the Joint Chiefs of Staff is required to 
review periodically and not less than every 2 years the missions, 
responsibilities, and forces of each combatant command and recommend 
any changes to the President, through the Secretary of 
Defense.[Footnote 41] This legislation also requires that, except 
during times of hostilities or the imminent threat of hostilities, the 
President notify Congress not more than 60 days after either 
establishing a new combatant command or significantly revising the 
missions, responsibilities, or force structure of an existing command. 
As such, a major event or change in the political or security landscape 
could trigger the need for a change in the plan. For example, in the 
spring of 2007, the President announced that DOD intends to establish a 
U.S. Africa Command to oversee military operations on the African 
continent. According to an OSD official, DOD will revise the 2002 
Unified Command Plan and report on the changes in the military command 
structure after plans for U.S. Africa Command are more fully developed. 

* Eliminate some reporting elements in the QDR legislation for issues 
that may no longer be as relevant due to changes in the security 
environment. As we reported in our assessment of DOD's 2001 
QDR,[Footnote 42] a DOD official and some defense analysts said that 
two reporting elements should be eliminated because they are related to 
the allocation of forces under the old two-major-theater-war construct, 
which is more limited than DOD's current force planning construct that 
includes a broader range of threats. These reporting elements include 
the following: 

- A discussion of the "appropriate ratio of combat forces to support 
forces (commonly referred to as the 'tooth-to-tail ratio') under the 
national defense strategy." DOD's goal has been to reduce the number of 
personnel and costs associated with the support forces, or "tail." 
However, during the 2006 QDR process and report DOD did not identify 
which units should be considered support and which should be considered 
combat. Given rapidly changing technologies, differentiating between 
support and combat troops has become increasingly irrelevant and 
difficult to measure. For example, as the United States moves toward 
acquiring greater numbers of unmanned aircraft piloted from remote 
computer terminals and relies increasingly on space-based assets 
operated by personnel in the United States, it will be more difficult 
to distinguish between combat and support personnel. 

- Assessments of "the extent to which resources must be shifted among 
two or more theaters under the national defense strategy in the event 
of conflict in such theaters," and the assumptions used regarding 
"warning time." Both these reporting elements relate to the allocation 
of forces under the old two-major-theater-war planning construct. Under 
this construct, the amount of time that was assumed available for 
warning and the separation time between major theater wars were 
critical factors in planning the size and composition of U.S. forces 
and assessing operational risk, particularly for assets that might need 
to be shifted between theaters. However, under the new defense 
strategy, along with DOD's new force planning construct, DOD assumes 
that it will continue to be involved in a wide range of military 
operations around the world. Given the full spectrum of threats that 
DOD is planning to address, it may be more useful for DOD's force 
structure assessments to be tied to requirements for a broad range of 
potential threats. 

* Establish an independent advisory group to work with DOD prior to or 
during the QDR to provide alternative perspectives and analyses. As 
part of our assessment of the 1997 QDR, we suggested that a 
congressionally mandated panel, such as the 1997 National Defense 
Panel, could be used to encourage DOD to consider a wider range of 
strategy, force structure, and modernization options. Specifically, we 
noted that such a review panel, if it preceded the QDR, could be 
important because it is extremely challenging for DOD to conduct a 
fundamental reexamination of defense needs, given that its culture 
rewards consensus building and often makes it difficult to gain support 
for alternatives that challenge the status quo. One of the recent 
additions to the QDR legislation requires the establishment of an 
independent panel to conduct an assessment of future QDRs after the 
process is completed; however, most defense analysts we spoke with 
agreed that an independent analysis of key issues for the Secretary of 
Defense either prior to or during the next review would complement a 
post-QDR assessment and strengthen DOD's ability to develop its 
strategic priorities and conduct a comprehensive force structure and 
capabilities analysis. The analysts agreed that an advisory group 
established before or during the QDR process could function as an 
independent analytical team to challenge DOD's thinking, recommend 
issues for DOD to review and review assumptions, and provide 
alternative perspectives in activities such as identifying alternative 
force structures and capabilities, and performing risk assessments. An 
independent group's assessments could be useful to DOD in future QDRs 
to identify the capabilities of the nation's current and future 
adversaries because potential enemies will likely be more difficult to 
target than the adversaries of the Cold War era. 

Conclusions: 

The 2006 QDR represented an opportunity for DOD to perform a 
comprehensive review of the national defense strategy for the first 
time since military forces have been engaged in the Global War on 
Terrorism. Sustained DOD leadership facilitated decision making, and 
extensive collaboration with interagency partners and allies provided a 
range of perspectives on threats and capabilities. However, weaknesses 
in DOD's analysis of force structure, personnel requirements, and risk 
limited its reassessment of the national defense strategy and U.S. 
military forces. For example, by not fully incorporating capabilities- 
based planning into a comprehensive assessment of alternative force 
structures, DOD could not comprehensively identify capabilities gaps, 
associated operational risks, and trade-offs that must be made to 
efficiently use limited fiscal resources. Therefore, DOD was not in a 
good position to assure Congress that it identified the force best 
suited to execute the national defense strategy. Moreover, the 
Secretary of Defense's announcement of plans to increase the sizes of 
the Army and Marine Corps in January 2007 calls into question the 
analytical basis of the QDR conclusion that the number of personnel and 
the size of the force structure for the services were appropriate to 
meet current and future requirements. Further, without a comprehensive 
approach to assessing risk, DOD's 2006 QDR did not provide a sufficient 
basis to demonstrate how risks associated with its proposed force 
structure were evaluated. Unless DOD takes steps to provide 
comprehensive analytical support for significant decisions in future 
QDRs, the department will not be in the best position to distinguish 
between the capabilities it needs to execute the defense strategy 
versus those capabilities it wants but may not be able to afford at a 
time when the nation's fiscal challenges are growing. Moreover, 
Congress will be unable to effectively evaluate the benefits, costs, 
and risks associated with decisions flowing from future QDRs. 

Opportunities exist for Congress to consider further changes to the QDR 
legislation that may encourage DOD to concentrate its efforts on high- 
priority matters such as developing a defense strategy and identifying 
the force structure best suited to execute the strategy. Unless 
Congress clearly identifies its expectations for DOD to develop a 
budget plan that supports the strategy, DOD may not thoroughly address 
the challenges it will face as it competes with other federal agencies 
and programs for taxpayers' dollars and may spend considerable effort 
assessing options for capabilities that could be unaffordable given our 
nation's fiscal challenges. Moreover, the large number of reporting 
elements in the QDR legislation presents DOD with a challenge in 
conducting data-driven comprehensive analyses of many significant 
complex issues. A reassessment of the QDR's scope could provide greater 
assurances that DOD will thoroughly assess and report on the most 
critical security issues that the nation faces and could help it decide 
what actions it needs to take to establish the most effective military 
force to counter 21st century threats. Lastly, although Congress has 
established a new legislative requirement for an independent panel to 
conduct a post-QDR review, there is currently no mechanism for Congress 
and the Secretary of Defense to obtain an independent perspective prior 
to and during the QDR. Without an independent group of advisors that 
could provide comprehensive data-driven analyses to DOD prior to and 
during future QDR reviews, DOD may not consider a wider range of 
perspectives, such as force structure options, thus limiting the 
analytic basis of its QDR decisions. 

Recommendations for Executive Action: 

To enhance the usefulness of future QDRs and assist congressional 
oversight, we recommend that the Secretary of Defense take the 
following two actions: 

* Develop appropriate methods for the department to use in a 
comprehensive, data-driven capabilities-based assessments of 
alternative force structures and personnel requirements during future 
QDRs. 

* Develop appropriate methods for the department to use in conducting a 
comprehensive, data-driven approach to assess the risks associated with 
capabilities of its proposed force structure during future QDRs. 

Matters for Congressional Consideration: 

To improve the usefulness of future QDRs, Congress should consider 
revisions to the QDR legislation, including (1) clarifying expectations 
on how the QDR should address the budget plan that supports the 
national defense strategy, (2) eliminating some detailed reporting 
elements that could be addressed in different reports and may no longer 
be relevant due to changes in the security environment, and (3) 
requiring an independent panel to provide advice and alternatives to 
the Secretary of Defense before and during the QDR process. 

Agency Comments and Our Evaluation: 

The Principal Deputy Under Secretary of Defense for Policy provided 
written comments on a draft of this report. The department partially 
agreed with our recommendations and agreed with the matters we raised 
for congressional consideration regarding possible changes to the QDR 
legislative language. In addition, the comments provided information 
about steps the department is taking to update its methodologies for 
analyzing force structure requirements and assessing risks. DOD's 
comments are reprinted in their entirety in appendix IV. DOD also 
provided technical comments which we incorporated as appropriate. 

In its comments, the department partially agreed with our 
recommendation that the Secretary of Defense develop appropriate 
methods for conducting comprehensive, data-driven capabilities-based 
assessments of alternative force structures and personnel requirements. 
DOD agreed with our conclusion that the 2006 QDR did not 
comprehensively assess alternatives to planned structure; rather, its 
analysis was limited to identifying shortfalls in current structure 
when compared to various illustrative operational scenarios. However, 
in its comments, the department noted that it has developed or is 
developing new illustrative security environments to use to demonstrate 
the demands associated with force structures and personnel requirements 
for each strategic environment. The department also pointed out the 
difficulty of undertaking an evaluation of the defense strategy and 
producing a defense program within the QDR process, as required under 
current QDR legislation. It said that as the department further 
develops the underlying assumptions for the force planning construct 
and refreshes the illustrative scenarios available for analysis, it 
will be in a better position to analyze overall needed capabilities, 
including personnel requirements. Finally, the department noted that 
the 2006 QDR was based on information available in 2005, which included 
a different demand than what military forces face today. At that time, 
the department's collective decision, approved by the then Secretary of 
Defense, was that the size of the force was about right, although the 
force mix should be adjusted. As a result of this change in demand 
since the 2006 QDR, according to DOD's comments, DOD has responded by 
increasing Army and Marine Corps end strength. We believe that the 
steps DOD outlined in its comments, such as revising the illustrative 
scenarios and developing force demands for new security environments, 
will help DOD to improve its force structure analyses. However, we 
believe that a comprehensive assessment that identifies and documents 
the basis for trade-off decisions across capability areas is critical 
to developing the force structure best suited to execute the defense 
strategy. Until DOD undertakes a comprehensive assessment of 
alternative force structure options that clearly documents how the 
department reached its force structure decisions, it will not be in the 
best position to determine the force structure best suited to execute 
the missions called for in the defense strategy at low-to-moderate 
risk. 

DOD also partially concurred with our recommendation to develop 
appropriate methods for conducting comprehensive, data-driven 
assessments of the risks associated with the capabilities of its 
proposed force structure during future QDRs. In its comments, the 
department agreed that improving the department's risk methodology is 
necessary to appropriately assess risk. It noted that in addition to 
risks associated with capabilities, strategic, operational, force 
management, and institutional risks need to be addressed in a risk 
assessment methodology. The department cited several post-QDR 
initiatives the department is undertaking to improve how the department 
assesses risk, including new measures to help link strategic goals to 
plans and budgets and develop performance metrics. Also in its 
comments, the department described efforts to strengthen and integrate 
existing assessments to allow decision makers to better set priorities, 
allocate resources, and assess outcomes and risks and stated its intent 
to improve risk assessment methods to inform risk measurement in future 
QDRs. We agree that assessing risk associated with capabilities is only 
one type of risk facing the department and that the initiatives the 
department is undertaking to link strategic goals with plans and 
budgets and improve its risk assessment methodology can, when 
implemented, help it improve its ability to identify and manage risks. 
Until the department's risk management framework is sufficiently 
developed that it can support comprehensive assessments of risk across 
domains, assess progress toward accomplishing strategic goals, and 
provide senior leaders reliable analysis to inform decisions among 
alternative actions, DOD will not be in the best position to identify 
or assess risks to establish investment priorities. 

DOD also provided its views on matters we raised for congressional 
consideration in a draft of this review regarding possible revisions to 
the QDR legislation. Specifically, DOD agreed with clarifying 
expectations for addressing the budget plan and eliminating some 
reporting requirements. In a draft of this report, we originally raised 
as a matter for congressional consideration broadening the QDR 
legislation by requiring the legislatively required independent 
advisory panel, which would provide a post-QDR critique of the results 
of the process, to provide DOD with alternative perspectives and 
analysis prior to or during the QDR. The department stated that having 
an independent panel that could provide advice and alternatives to the 
Secretary of Defense before and during the QDR process would be useful. 
However, it raised the concern that tasking the same independent panel 
that is required to provide a post-QDR critique to also perform an 
advisory function before and during the review could create mistrust 
between the department leadership and the independent advisory panel. 
To address DOD's concerns we have modified the matter for consideration 
to suggest that an independent panel be required to provide advice and 
alternatives to the Secretary of Defense before and during the QDR. 
This change is intended to provide Congress with the flexibility to 
establish separate independent panels to provide advice prior to and 
following the next QDR. 

We are sending copies of this report to other appropriate congressional 
committees and the Secretary of Defense. We will also make copies 
available to other interested parties upon request. In addition, the 
report will be available at no charge on the GAO Web site at 
[hyperlink, http://www.gao.gov]. If you have any questions about this 
report, please contact me at (202) 512-4402. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Major contributors to this report are 
listed in appendix V. 

Signed by: 

Janet A. St. Laurent: 
Director, Defense Capabilities and Management: 

[End of section] 

Appendix I: Scope and Methodology: 

To assess the strengths and weaknesses of the Department of Defense's 
(DOD) approach and methodology for the 2006 Quadrennial Defense Review 
(QDR), we examined the relevant documentation including the John Warner 
National Defense Authorization Act for Fiscal Year 2007; the National 
Defense Strategy of the United States of America (March 2005); the 
1997, 2001, and 2006 QDRs; the QDR Terms of Reference (March 2005); the 
Under Secretary of Defense (Policy) issue papers for the QDR's focus 
areas; and the 2006 QDR's study teams' briefings and other 
documentation for the DOD's senior-level review group, as well as our 
reports on aspects of previous QDRs. We also examined documents 
identifying the methodology and results of the QDR's key force 
structure analyses and risk assessments. We reviewed studies on 
capabilities-based planning and compared the key elements of 
capabilities-based planning identified in the studies to the QDR's 
Terms of Reference and DOD's documented methodology for the Operational 
Availability 06 Study to assess the extent to which capabilities-based 
planning concepts were used during the QDR. We also discussed these 
issues with officials from the Office of the Under Secretary of Defense 
(Policy); the Office of Program Analysis and Evaluation; the Joint 
Chiefs of Staff Directorate for Force Assessment; U.S. Special 
Operations Command; and officials from the Army, Air Force, and Marine 
Corps who participated in the QDR process. To understand how DOD 
established processes to ensure that QDR initiatives are implemented, 
we examined internal DOD documents, DOD's January 2007 quarterly report 
to Congress on the status of implementation of the 2006 QDR, and post- 
QDR study teams' reports to understand the methodology that was 
developed to oversee implementation. We discussed the implementation 
status of the QDR initiatives with officials from the Office of the 
Director, Administration and Management and the Under Secretary of 
Defense (Policy). We did not undertake an assessment of the 
effectiveness of implementation of the QDR initiatives because it was 
outside of scope of our review. We obtained and examined documents from 
the Deputy Secretary of Defense and the post-QDR study teams and 
discussed the status of the teams' work with officials from the Under 
Secretary of Defense (Policy), the Institutional Reform and Governance 
team, and the Joint Command and Control and Battlespace Awareness 
capability portfolios. Moreover, we reviewed the internal controls on 
DOD's tracking system for QDR initiatives and evaluated the reliability 
of that data for DOD's use. We applied evidence standards from the 
generally accepted government auditing standards in our evaluation of 
DOD's database. As a result, we determined the information we used 
meets these evidence standards and is sufficiently reliable for our 
purposes. 

To determine whether changes to the QDR legislation could improve the 
usefulness of future reviews including any changes needed to better 
reflect the security conditions of the 21st century, we examined a wide 
variety of studies that discussed the strengths and weaknesses of DOD's 
2006 QDR and prior reviews. Our review included studies from the RAND 
Corporation, the National Defense University, and the Center for 
Strategic and Budgetary Assessments. To obtain opinions and develop 
options to improve the usefulness of future QDRs, we interviewed 
several DOD officials who participated in the 2006 QDR from the 
services and the Joint Staff. Further, we met with 11 defense analysts 
who had detailed knowledge of DOD's QDR process and/or participated in 
DOD's 1997, 2001, or 2006 QDRs. We used a standard set of questions to 
interview each of these analysts to ensure we consistently discussed 
the reporting elements of the QDR legislation and DOD's approach and 
methods for its three QDRs. To develop the questions, we reviewed the 
QDR legislation, DOD's QDR reports, and our prior work on DOD's 
strategic reviews. One of the defense analysts served in various 
positions within and outside of DOD such as the former Chairman of the 
Defense Science Board and the Chairman of the 1997 National Defense 
Panel. Other defense analysts were senior officials from the following 
organizations: the American Enterprise Institute, the Center for 
American Progress, the Center for Naval Analysis, the Center for a New 
American Security, the Center for Strategic and Budgetary Assessments, 
the Center for Strategic and International Studies, the Lexington 
Institute, the National Defense University's Institute for National 
Strategic Studies, the RAND Corporation, and the Heritage Foundation. 
Based on our review of QDR literature and our discussions with DOD 
analysts, we developed a matrix summarizing these individuals' concerns 
regarding the QDR legislative requirements and their views on the 
options to address them. 

Our work was conducted in the Washington, D.C., metropolitan area and 
Tampa, Florida. We performed our review from May 2006 through May 2007 
in accordance with generally accepted government auditing standards. 

[End of section] 

Appendix II: Quadrennial Defense Review Legislation in Effect for the 
2006 Quadrennial Defense Review: 

TITLE 10 U.S.C. �8. Quadrennial Defense Review: 

(a) Review required.--The Secretary of Defense shall every four years, 
during a year following a year evenly divisible by four, conduct a 
comprehensive examination (to be known as a "quadrennial defense 
review") of the national defense strategy, force structure, force 
modernization plans, infrastructure, budget plan, and other elements of 
the defense program and policies of the United States with a view 
toward determining and expressing the defense strategy of the United 
States and establishing a defense program for the next 20 years. Each 
such quadrennial defense review shall be conducted in consultation with 
the Chairman of the Joint Chiefs of Staff. 

(b) Conduct of review.--Each quadrennial defense review shall be 
conducted so as--: 

(1) to delineate a national defense strategy consistent with the most 
recent National Security Strategy prescribed by the President pursuant 
to section 108 of the National Security Act of 1947 (50 U.S.C.404a); 

(2) to define sufficient force structure, force modernization plans, 
infrastructure, budget plan, and other elements of the defense program 
of the United States associated with that national defense strategy 
that would be required to execute successfully the full range of 
missions called for in that national defense strategy; 

(3) to identify (A) the budget plan that would be required to provide 
sufficient resources to execute successfully the full range of missions 
called for in that national defense strategy at a low-to-moderate level 
of risk, and (B) any additional resources (beyond those programmed in 
the current future-years defense program) required to achieve such a 
level of risk; and: 

(c) Assessment of risk.--The assessment of risk for the purposes of 
subsection (b) shall be undertaken by the Secretary of Defense in 
consultation with the Chairman of the Joint Chiefs of Staff. That 
assessment shall define the nature and magnitude of the political, 
strategic, and military risks associated with executing the missions 
called for under the national defense strategy. 

(d) Submission of QDR to Congressional committees.--The Secretary shall 
submit a report on each quadrennial defense review to the Committees on 
Armed Services of the Senate and the House of Representatives. The 
report shall be submitted in the year following the year in which the 
review is conducted, but not later than the date on which the President 
submits the budget for the next fiscal year to Congress under section 
1105(a) of title 31. The report shall include the following: 

(1) The results of the review, including a comprehensive discussion of 
the national defense strategy of the United States, the strategic 
planning guidance, and the force structure best suited to implement 
that strategy at a low-to-moderate level of risk. 

(2) The assumed or defined national security interests of the United 
States that inform the national defense strategy defined in the review. 

(3) The threats to the assumed or defined national security interests 
of the United States that were examined for the purposes of the review 
and the scenarios developed in the examination of those threats. 

(4) The assumptions used in the review, including assumptions relating 
to--(A) the status of readiness of United States forces; (B) the 
cooperation of allies, mission-sharing and additional benefits to and 
burdens on United States forces resulting from coalition operations; 
(C) warning times; (D) levels of engagement in operations other than 
war and smaller-scale contingencies and withdrawal from such operations 
and contingencies; and (E) the intensity, duration, and military and 
political end-states of conflicts and smaller-scale contingencies. 

(5) The effect on the force structure and on readiness for high- 
intensity combat of preparations for and participation in operations 
other than war and smaller-scale contingencies. 

(6) The manpower and sustainment policies required under the national 
defense strategy to support engagement in conflicts lasting longer than 
120 days. 

(7) The anticipated roles and missions of the reserve components in the 
national defense strategy and the strength, capabilities, and equipment 
necessary to assure that the reserve components can capably discharge 
those roles and missions. 

(8) The appropriate ratio of combat forces to support forces (commonly 
referred to as the 'tooth-to-tail' ratio) under the national defense 
strategy, including, in particular, the appropriate number and size of 
headquarters units and Defense Agencies for that purpose. 

(9) The strategic and tactical air-lift, sea-lift, and ground 
transportation capabilities required to support the national defense 
strategy. 

(10) The forward presence, pre-positioning, and other anticipatory 
deployments necessary under the national defense strategy for conflict 
deterrence and adequate military response to anticipated conflicts. 

(11) The extent to which resources must be shifted among two or more 
theaters under the national defense strategy in the event of conflict 
in such theaters. 

(12) The advisability of revisions to the Unified Command Plan as a 
result of the national defense strategy. 

(13) The effect on force structure of the use by the armed forces of 
technologies anticipated to be available for the ensuing 20 years. 

(14) The national defense mission of the Coast Guard. 

(15) Any other matter the Secretary considers appropriate. 

(e) CJCS review.--(1) Upon the completion of each review under 
subsection (a), the Chairman of the Joint Chiefs of Staff shall prepare 
and submit to the Secretary of Defense the Chairman's assessment of the 
review, including the Chairman's assessment of risk. 

(2) The Chairman shall include as part of that assessment the 
Chairman's assessment of the assignment of functions (or roles and 
missions) to the armed forces, together with any recommendations for 
changes in assignment that the Chairman considers necessary to achieve 
maximum efficiency of the armed forces. In preparing the assessment 
under this paragraph, the Chairman shall consider (among other matters) 
the following: 

(A) unnecessary duplication of efforts among the armed forces. 

(B) changes in technology that can be applied effectively to warfare. 

(3) The Chairman's assessment shall be submitted to the Secretary in 
time for the inclusion of the assessment in the report. The Secretary 
shall include the Chairman's assessment, together with the Secretary's 
comments, in the report in its entirety. 

[End of section] 

Appendix III: Summary of New Changes in 10 U.S.C. �8 for Future 
Quadrennial Defense Reviews: 

This appendix provides a summary of changes to the Quadrennial Defense 
Review (QDR) legislation (10 U.S.C. �8) as a result of the John 
Warner National Defense Authorization Act for Fiscal Year 
2007.[Footnote 43] The new requirements will be in effect when the 
Department of Defense issues its next quadrennial review in 2010. 

* The QDR should make recommendations that are not constrained to 
comply with the budget submitted to Congress by the President. 

* The review shall include the following new reporting elements: 

- the specific capabilities, including the general number and type of 
specific military platforms, needed to achieve the strategic and 
warfighting objectives identified in the review; and: 

- the homeland defense and support to civil authority missions of the 
active and reserve components, including the organization and 
capabilities required for the active and reserve components to 
discharge each such mission. 

* The Chairman shall describe the capabilities needed to address the 
risk that he identified in his risk assessment. 

* The Secretary of Defense shall establish an independent panel to 
conduct an assessment of the QDR not later than 6 months before the 
date on which the QDR will be submitted. 

- Not later than 3 months after the date on which the QDR is submitted, 
the panel shall submit an assessment of the review, including the 
review's recommendations, the stated and implied assumptions 
incorporated in the review, and the vulnerabilities of the strategy and 
force structure underlying the review. 

- The panel's assessment shall include analyses of the trends, 
asymmetries, and concepts of operations that characterize the military 
balance with potential adversaries, focusing on the strategic 
approaches of possible opposing forces. 

[End of section] 

Appendix IV: DOD Comments: 

Principal Deputy Under Secretary Of Defense: 
2100 Defense Pentagon: 
WASHINGTON, D.C. 20301-2100:  

JULY 19, 2007: 

Ms. Janet A. St Laurent
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W.: 
Washington, DC 20548:  

Dear Ms. St Laurent: 

This is the Department of Defense response to the GAO Draft Report, GAO-
07- 709C, "Quadrennial Defense Review: Future Reviews Could Benefit 
from Improved Department of Defense Analyses and Changes to Legislative 
Requirements," dated June 6, 2007 (GAO Code 350845). 

The Department partially concurs with the draft report's 
recommendations. The rationale for the Department's position is 
enclosed. 

The Department appreciates the opportunity to comment on the draft 
report. Technical comments were provided separate]. For further 
questions concerning this report, please contact Ms. Elisabeth Cordray 
a (703) 697-2451. 

Sincerely,

Signed by: 
Ryan Henry: 

Enclosure: 

GAO Draft Report - Dated June 6, 2007: 
GAO Code 350845 /GAO-07-709C: 

"Quadrennial Defense Review: Future Reviews Could Benefit from Improved 
Department of Defense Analyses and Changes to Legislative Requirements" 

Department Of Defense Comments To The Recommendations

Recommendation 1: The GAO recommends that the Secretary of Defense 
develop appropriate methods for the Department to use in conducting 
comprehensive, data-driven capabilities-based assessments of 
alternative force structures and personnel requirements during future 
Quadrennial Defense Reviews. 

DOD Response: The Department of Defense partially concurs with 
Recommendation 1. It is accurate that the analysis performed to support 
the 2006 QDR did not comprehensively assess alternatives to planned 
force structure. However, DOD has sufficient methods for conducting 
data-driven capabilities-based assessments of alternative force 
structures and personnel requirements. As noted by GAO, the QDR 
analysis did examine alternative force structures and personnel 
requirements within particular capability areas. Each of the Services, 
the Joint Staff, and the Director for Program Analysis and Evaluation 
have analytical tools and methodologies used to assess alternative 
force structures and establish appropriate end strength levels to meet 
the needs of the defense strategy. The Department continuously improves 
its analytic processes through the analytic agenda, which establishes a 
range of illustrative scenarios to set potential demands, military 
concepts of operation and associated force structure, and a baseline 
set of data for analysis. 

The Operational Availability 2006 (OA-06) study, the key QDR analytic 
tool, counted force demands and applied resources to determine 
shortfalls. In OA analysis, force structure and personnel requirements 
are derived using a set of particular concepts of operation. To 
comprehensively assess alternative force structures, the analysis would 
need to alter these concepts of operation for each illustrative 
scenario. In OA-06, there were 26 separate illustrative vignettes, with 
26 separate concepts of operation. To produce an alternative force 
structure, analysts would need to produce different concepts of 
operation for each vignette. While such analysis was not undertaken 
comprehensively during the QDR, the methodology exists for assessing 
alternative force structures. 

OA-06 analysis was also based on a set of analytic tools aligned to the 
previous strategy. The QDR updated the Department's Force Planning 
Construct, however, analysis was designed and executed using the pre-
QDR guidance. The Department has developed a replacement to the 
Baseline Security Posture (BSP), the Steady-State Security Posture 
(SSSP), to demonstrate demands on the Department over time. The SSSP 
has five strategic environments or future themes, from which to form a 
basis for demand over time, and has developed or is developing a menu 
of different surge-inducing events to overlay on those Steady-State 
demands. Future analysis will produce a series of demands with 
associate force structures and personnel requirements for each 
strategic environment, thus providing even more robust capability 
analysis. The Operational Availability 2008 study will be the 
Department's first comprehensive look at the revised Force Planning 
Construct. 

The QDR is designed to evaluate the defense strategy and produce a 
defense program aligned to that strategy. It is not feasible to 
complete both of these tasks during the QDR process. The detail and 
complexity of the analysis required to align the entire defense program 
with a revised strategy extends well beyond the QDR, especially because 
a significant portion of the review process is spent revising the 
strategy. As in past reviews, the QDR represents the starting point of 
a four-year process to analyze the implications of a revised strategy 
and develop the best-suited defense program. As the Department further 
develops the underlying assumptions for the force planning construct 
and refreshes the illustrative scenarios available for analysis, it 
will be in a better position to analyze overall needed capabilities, to 
include personnel requirements. 

Finally, all planning is based on assumptions, and changes to 
assumptions lead to changes in demand. QDR analysis on force structure 
and personnel requirements was based on the information available in 
2005. The results of Departmental analysis informed its senior 
leadership as they discussed the need to increase the size of the force 
during the development of the QDR Terms of Reference. The collective 
decision, approved by the Secretary of Defense, was that while the size 
of the force was about right, the force mix (capabilities and personnel 
specialties) should be adjusted to meet current and emerging national 
security priorities. The 2006 QDR strategic environment was based on a 
different level of demand than what military forces face today. As a 
result of this change of demand, DOD responded by increasing Army and 
Marine Corps end strength. As its preface notes, the QDR Report 
represents a snapshot in time that must continually be reexamined. 

Recommendation 2: The GAO recommends that the Secretary of Defense 
develop appropriate methods for the Department to use in conducting 
comprehensive, data-driven approach to assess the risks associated with 
capabilities of its proposed force structure during future Quadrennial 
Defense Reviews. 

DOD Response: The Department of Defense partially concurs with 
Recommendation 2. GAO notes that the QDR coordination group failed to 
provide further risk guidance to each study team as directed in the 
Terms of Reference. As a result, the study teams inconsistently applied 
the risk management framework as options were presented for decision. 
Alternatively, the Department presented a consolidated analysis of risk 
at the November Strategic Planning Council. The Department's leadership 
found this approach to be an effective method for assessing the risk of 
proposed force structure decisions. 

As outlined in the QDR Report, further development of the Department's 
risk methodology is necessary to appropriately assess risk. However, 
the Department's risk management framework must be designed to assess 
more than just risks associated with capabilities, as the GAO 
recommends. Strategic, operational, force management, and institutional 
risk are also key facets of risk that must be addressed in any 
methodology. In order to fully address all of these aspects, the 
Department established the Institutional Reform and Governance 
execution roadmap. 

This execution roadmap outlined several post-QDR initiatives to 
implement new measures that will help link strategic goals to plans and 
budgets, thereby helping the Department to better assess the risks of 
various courses of action. For instance, future strategic guidance will 
identify performance goals, which will be used by senior leaders in 
assessing progress towards those goals. Additionally, efforts are 
underway to identify metrics to measure progress in each of the risk 
areas. The roadmap also places renewed emphasis on performance 
assessment and feedback. One of the major roadmap initiatives is to 
strengthen and integrate existing assessment mechanisms to allow the 
Department's decisionmakers to better set priorities, allocate 
resources, and assess outcomes and risk. The Department is 
consolidating several individual assessments to produce a comprehensive 
joint assessment that will provide a view of risk across various 
missions, domains and timeframes. The comprehensive joint assessment 
will then provide the starting point for updating the Department's 
strategic guidance, performance goals, and associated plans and 
programs. 

The Department will continue to improve its risk assessment methodology 
each year, drawing from best available industry, institutional, and 
international practices. These improvements will be captured in 
existing and emerging assessment processes and will inform risk 
measurement in future QDRs. 

Matters For Congressional Consideration:  

The Department concurs with GAO's recommended legislative revisions 
regarding clarity of expectations for addressing the budget plan and 
eliminating outdated reporting elements. It is important for Congress 
and the Executive Branch to work in close collaboration to tailor 
individual QDRs to answer the most pressing strategic issues. Close 
collaboration is necessary to ensure that both Congress and the 
Secretary of Defense find the QDR a useful tool in assessing future 
defense needs. 

The Department partially concurs with the GAO recommendation to require 
the newly established independent advisory panel to provide DOD with 
alternative perspectives and analyses prior to and during the QDR. The 
QDR 2006 benefited greatly from the analysis provided to the Secretary 
of Defense by a "red team" of defense experts modeled after the 1997 
National Defense Panel. The benefit was derived from open discussions 
that produced a trusting and free environment for red team members to 
challenge assumptions and analysis. To create such an environment, non-
attribution was critical. Red team members and the Department's 
leadership knew their opinions, debates, and recommendations were 
protected. 

The Department agrees with the usefulness of an independent advisory 
panel prior to and during the QDR. Using the same panel to provide 
alternative views to Congress after the QDR may create mistrust between 
the Department's leadership and the independent advisory panel and 
reduce the benefit to the QDR process. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Janet St. Laurent (202) 512-4402, or stlaurentj@gao.gov: 

Acknowledgments: 

In addition to the contact name above, Margaret Morgan, Assistant 
Director; Deborah Colantonio; Alissa Czyz; Nicole Harms; Elizabeth 
Morris; Brian Pegram; Rebecca Shea; and John Townes made major 
contributions to this report. 

[End of section] 

Related GAO Products: 

Tactical Aircraft: DOD Needs a Joint and Integrated Investment 
Strategy. GAO-07-415. Washington, D.C.: April 2, 2007. 

Best Practices: An Integrated Portfolio Management Approach to Weapon 
System Investments Could Improve DOD's Acquisition Outcomes. GAO-07- 
388. Washington, D.C.: March 30, 2007. 

United States Government Accountability Office: Supporting the Congress 
through Oversight, Insight, and Foresight. GAO-07-644T. Washington, 
D.C.: March 21, 2007. 

Fiscal Stewardship and Defense Transformation. GAO-07-600CG. 
Washington, D.C.: March 8, 2007. 

Homeland Security: Applying Risk Management Principles to Guide Federal 
Investments. GAO-07-386T. Washington, D.C.: February 7, 2007. 

Military Personnel: DOD Needs to Provide a Better Link between Its 
Defense Strategy and Military Personnel Requirements. GAO-07-397T. 
Washington, D.C.: January 30, 2007. 

Force Structure: Joint Seabasing Would Benefit from a Comprehensive 
Management Approach and Rigorous Experimentation before Service Spend 
Billions on New Capabilities. GAO-07-211. Washington, D.C.: January 26, 
2007. 

Force Structure: Army Needs to Provide DOD and Congress More Visibility 
Regarding Modular Force Capabilities and Implementation Plans. GAO-06- 
745.Washington, D.C.: September 6, 2006. 

Force Structure: DOD Needs to Integrate Data into Its Force 
Identification Process and Examine Options to Meet Requirements for 
High-Demand Support Forces. GAO-06-962. Washington, D.C.: 

September 5, 2006. 

DOD Acquisition Outcomes: A Case for Change. GAO-06-257T. Washington, 
D.C.: November 15, 2005. 

Defense Management: Additional Actions Needed to Enhance DOD's Risk- 
Based Approach for Making Resource Decisions. GAO-06-13. Washington, 
D.C.: November 15, 2005. 

DOD's High-Risk Areas: Successful Business Transformation Requires 
Sound Strategic Planning and Sustained Leadership. GAO-05-520T. 
Washington, D.C.: April 13, 2005. 

Military Personnel: DOD Needs to Conduct a Data-Driven Analysis of 
Active Military Personnel Levels Required to Implement the Defense 
Strategy. GAO-05-200. Washington, D.C.: February 1, 2005. 

21st Century Challenges: Reexamining the Base of the Federal 
Government. GAO-05-325SP. Washington, D.C.: February 1, 2005. 

High-Risk Series: An Update. GAO-05-207. Washington, D.C.: 

January 1, 2005. 

Results-Oriented Cultures: Implementation Steps to Assist Mergers and 
Organizational Transformations. GAO-03-669. Washington, D.C.: 

July 2, 2003. 

Quadrennial Defense Review: Future Reviews Can Benefit from Better 
Analysis and Changes in Timing and Scope. GAO-03-13. Washington, D.C.: 
November 4, 2002. 

A Model of Strategic Human Capital Management. GAO-02-373SP. 
Washington, D.C.: March 15, 2002. 

Quadrennial Defense Review: Opportunities to Improve the Next 
Review.GAO/NSIAD-98-155. Washington, D.C.: June 25, 1998. 

Quadrennial Defense Review: Some Personnel Cuts and Associated Savings 
May Not Be Achieved. GAO/NSIAD-98-100. Washington, D.C.: 

April 30, 1998. 

Combating Terrorism: Threat and Risk Assessments Can Help Prioritize 
and Target Program Investments. GAO/NSIAD-98-74. Washington, D.C.: 
April 9, 1998. 

Bottom-Up Review: Analysis of DOD War Game to Test Key Assumptions. 
GAO/NSIAD-96-170. Washington, D.C.: June 21, 1996. 

Bottom-Up Review: Analysis of Key DOD Assumptions. GAO/NSIAD-95-56. 
Washington, D.C.: Jan. 31, 1995. 

Footnotes:  

[1] See examples, GAO, 21st Century Challenges: Reexamining the Base of 
the Federal Government, GAO-05-325SP (Washington, D.C.: February 2005) 
and Fiscal Stewardship and Defense Transformation, GAO-07-600CG 
(Washington, D.C.: Mar. 8, 2007). 

[2] Force structure represents the numbers, size, and composition of 
the units that compromise U.S. forces, for example, ships or air wings. 

[3] The National Defense Authorization Act for Fiscal Year 2000, Pub. 
L. No. 106-65 �1 (1999), codified at 10 U.S.C. �8. 

[4] DOD is also required to identify any additional resources (beyond 
those programmed in the current future-years defense program) required 
to achieve such a level of risk. 

[5] The first Quadrennial Defense Review was submitted to Congress in 
May 1997 before the current legislation was enacted. The second 
Quadrennial Review was submitted on September 30, 2001, pursuant to 10 
U.S.C. �8. 

[6] DOD refers to irregular warfare as conflicts in which enemy 
combatants are not regular military forces of nation states. 

[7] GAO, Quadrennial Defense Review: Future Reviews Can Benefit from 
Better Analysis and Changes in Timing and Scope, GAO-03-13 (Washington, 
D.C.: Nov. 4, 2002) and GAO, Quadrennial Defense Review: Opportunities 
to Improve the Next Review, GAO/NSIAD-98-155 (Washington, D.C.: June 
25, 1998). 

[8] GAO, Defense Management: Additional Actions Needed to Enhance DOD's 
Risk-Based Approach for Making Resource Decisions, GAO-06-13 
(Washington, D.C.: Nov. 15, 2005). 

[9] John Warner National Defense Authorization Act for Fiscal Year 
2007, Pub. L. No. 109-364, �31 (2006). 

[10] Pub. L. No. 109-364, �32 (2006). 

[11] Department of Defense, Quarterly Report to Congress on 
Implementation of the 2006 Quadrennial Defense Review (Washington, 
D.C.: Jan. 31, 2007) and Second Quarterly Report to Congress on 
Implementation of the 2006 Quadrennial Defense Review (Washington, 
D.C.: June 14, 2007). 

[12] Pub. L. No. 109-364 �31 (2006). 

[13] National Defense Authorization Act for Fiscal Year 1997, Pub. L. 
No. 104-201 �3 (1996). 

[14] Pub. L. No. 106-65 �1 (1999), codified at 10 U.S.C. �8. 

[15] Pub. L. No. 109-364, Ё1031, 1032 (2006). 

[16] DOD submitted its first and second quarterly reports to Congress 
on January 31, 2007, and June 14, 2007, respectively. This reporting 
requirement will terminate upon the publication of the next QDR or when 
the Secretary of Defense notifies the Senate and House Armed Services 
Committees in writing that implementation is complete for the 2006 QDR 
recommendations. 

[17] For examples, GAO, DOD's High Risk Areas Successful Business 
Transformation Requires Sound Strategic Planning and Sustained 
Leadership, GAO-05-520T (Washington, D.C.: Apr. 13, 2005), and Force 
Structure Army Needs to Provide DOD and Congress More Visibility 
Regarding Modular Force Capabilities and Implementation Plans, GAO-06-
745 (Washington, D.C.: Sept. 6, 2006). 

[18] Department of Defense, Quarterly Report to Congress on 
Implementation of the 2006 Quadrennial Defense Review (Washington, 
D.C.: Jan. 31, 2007). We did not find documentation in DOD officials' 
briefings to the Deputy's Advisory Working Group or DOD's report to 
Congress that indicates how effectively DOD is implementing the 
initiatives, such as providing information on whether the activity is 
on schedule or assessing the effectiveness of the initiatives. Further, 
in June 2007, DOD reported that it had closed an additional 19 
initiatives, which brings the number of QDR initiatives that DOD 
considers completed to about 110, or 85 percent, of the 130 
initiatives. 

[19] The eight post-QDR study teams are Authorities; Irregular Warfare; 
Building Partnership Capacity; Strategic Communications; Institutional 
Reform and Governance; Joint Command and Control; Locate, Tag, Track; 
and Sensor-based Management of Intelligence, Surveillance, and 
Reconnaissance Enterprise. 

[20] For example, DOD officials, including the Assistant Secretary for 
Public Affairs and the Chairman of the Joint Chief of Staff Director 
for Strategic Communication, plan to develop formal processes that will 
enable DOD to better coordinate and synchronize the assessment and 
delivery of information to key allies and coalition partners. 

[21] DOD defines operational risk as the ability to achieve military 
objectives in a near-term conflict or other contingency. 

[22] According to DOD, a capability gap is the military inability to 
achieve a desired effect by performing a set of tasks under specified 
standards and conditions. The gap may be the result of not having an 
existing capability or the lack of proficiency or sufficiency in an 
existing capability. 

[23] Our reporting shows that DOD's experience has been different than 
this assumption. To meet operational demands in Iraq and Afghanistan, 
DOD has relied increasingly on reassigning and retraining personnel to 
meet requirements. See GAO-06-962. 

[24] GAO, Tactical Aircraft: DOD Needs a Joint and Integrated 
Investment Strategy, GAO-07-415 (Washington, D.C.: Apr. 2, 2007). 

[25] In December 2004, the Deputy Secretary of Defense directed the 
Quadrennial Defense Review to review ground forces capability. 

[26] The operational demands related to Iraq's security environment 
were not part of DOD's planning scenarios used in the ground forces 
study. 

[27] GAO, Force Structure: Joint Seabasing Would Benefit from a 
Comprehensive Management Approach and Rigorous Experimentation before 
Services Spend Billions on New Capabilities, GAO-07-211 (Washington, 
D.C.: Jan. 26, 2007). 

[28] GAO, Best Practices: An Integrated Portfolio Management Approach 
to Weapon System Investments Could Improve DOD's Acquisition Outcomes, 
GAO-07-388 (Washington, D.C.: Mar. 30, 2007). 

[29] In September 2006 the Deputy Secretary of Defense announced a new 
DOD management effort to explore whether managing groups of military 
capabilities across the entire department will enable DOD to improve 
the interoperability of future capabilities, minimize capability 
redundancies and gaps, and maximize the effectiveness of capabilities. 
DOD identified the following test cases: battlespace awareness, joint 
command and control, joint net centric operations, and joint logistics. 

[30] GAO-05-200. 

[31] GAO, A Model of Strategic Human Capital Management, GAO-02-373SP 
(Washington, D.C.: Mar.15, 2002). 

[32] GAO-07-397T. 

[33] The QDR legislation requires that the Secretary of Defense assess 
the nature and magnitude of the political, strategic, and military 
risks associated with executing the missions called for under the 
national defense strategy. The legislation also requires that upon the 
completion of each QDR, the Chairman of the Joint Chiefs of Staff shall 
prepare and submit to the Secretary of Defense the Chairman's 
assessment of the review, including the assessment of risk. (10 U.S.C. 
�8.) 

[34] GAO-06-13. 

[35] GAO-05-325SP. 

[36] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: 
January 2005). 

[37] DOD is also required to identify any additional resources (beyond 
those programmed in the current future years defense program) required 
to achieve such a level of risk. 

[38] For example, see GAO-05-325SP. 

[39] GAO, DOD Acquisition Outcomes: A Case for Change, GAO-06-257T 
(Washington, D.C.: Nov. 15, 2005). 

[40] GAO-03-13. 

[41] 10 U.S.C. �1(b). 

[42] GAO-03-13. 

[43] Pub. L. No. 109-364 �31 (2006). 

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