Army Maintenance:

More Effective Implementation of Maintenance Expenditure Limits Needed

NSIAD-91-270: Published: Sep 18, 1991. Publicly Released: Sep 18, 1991.

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GAO reviewed the Army's policies and procedures for computing and using maintenance expenditure limits (MEL), to determine whether: (1) the Army Materiel Command (AMC) was applying MEL effectively in their repair-or-buy decisions; and (2) AMC was sufficiently overseeing the commands' use of MEL.

GAO found that: (1) the three buying commands reviewed did not properly follow or consistently apply the AMC policies and procedures for computing MEL; (2) Communications-Electronics Command (CECOM) had not written implementing regulations or taken any other action to implement the AMC fiscal year (FY) 1987 MEL policy, because the Command was unaware that AMC had officially adopted the regulation; (3) for FY 1991, MEL computations at the Aviation Systems Command (AVSCOM) and the Tank-Automotive Command (TACOM) were untimely, since they were computed after repair programs had already been planned; (4) the three buying commands did not follow the required procedures regarding the use of waivers and exemptions; (5) because of confusion over which of the different procurement prices available should have been used in making the computation, AVSCOM inaccurately computed MEL; (6) AMC did not properly monitor the buying commands' implementation of the current regulation to ensure that the commands made cost-effective repair-or-buy decisions; and (7) no reviews had been made of the AMC revised MEL policy since it was issued in FY 1987.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Commanding General, AMC, should reemphasize the requirement that the buying commands are to: (1) compute MEL and compare them with the cost to repair an item; (2) procure items which, according to the MEL, are not economical to repair; and (3) request waivers or exemptions in cases where the repair program is necessary, even though the cost to repair exceeds the MEL.

    Agency Affected: Department of Defense: Department of the Army: U.S. Army Materiel Command

    Status: Closed - Implemented

    Comments: During the September 1991 Maintenance Expenditure Limit Conference, AMC reemphasized the requirement to compute MEL and directed all buying commands to implement the requirement immediately.

    Recommendation: The Commanding General, AMC, should direct the commands to compute and recompute MEL in accordance with the time frames in the AMC MEL regulation and to include in their implementing regulations the correct time frames for making those computations.

    Agency Affected: Department of Defense: Department of the Army: U.S. Army Materiel Command

    Status: Closed - Implemented

    Comments: During the September 1991 MEL Conference, AMC directed the commands to compute and recompute MEL in accordance with AMC regulations. AMC also directed the commands to include in implementing regulations the correct time frames for computing MEL.

    Recommendation: The Commanding General, AMC, should clarify that the procurement price the buying commands are to use in the MEL computations is the per-unit contract cost.

    Agency Affected: Department of Defense: Department of the Army: U.S. Army Materiel Command

    Status: Closed - Implemented

    Comments: During the September 1991 conference, AMC clarified the procurement price buying commands were to use in MEL computations, and to implement it immediately.

    Recommendation: The Commanding General, AMC, should include the extent of implementation of MEL policies and procedures at the buying commands in future compliance reviews.

    Agency Affected: Department of Defense: Department of the Army: U.S. Army Materiel Command

    Status: Closed - Implemented

    Comments: During the September 1991 MEL Conference, AMC emphasized that implementation of MEL policies and procedures will be included in future compliance reviews--the first to have started during the October-December 1991 review.

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