Army Depots:

Planned Distribution Centers Are Not Adequately Justified

NSIAD-86-84: Published: Jun 6, 1986. Publicly Released: Jun 6, 1986.

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GAO reviewed the Army's Area Oriented Depot (AOD) modernization program which will provide three new, mechanized distribution centers to respond to projected peacetime work load increases and to replace old facilities.

GAO noted that construction of the centers should begin in 1986 and is expected to take 30 months for each center. GAO found that: (1) the Army's computations overstated the projected peacetime work load increases for the two facilities; (2) the Army designed the facilities for 3 times their projected work load rather than the required 1.6 times the current peacetime work load; (3) the Army did not document alleged problems with the equipment; (4) most of the problems concerned the materiel handling systems which the Army could replace; (5) a majority of the new equipment the Army purchased for two of the facilities would not be used if the new centers became operational; (6) the analyses did not identify less costly alternatives to the new centers, did not reflect the sensitivity of the two projects to estimated cost changes, and excluded major costs that would affect the viability and payback period for the centers; (7) the highly mechanized operations for the new centers may be unnecessary; and (8) existing work load distribution imbalances would probably continue to exist under the modernization program.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Department of Defense (DOD) did not concur with this recommendation. The centers at Sharpe Army Depot and New Cumberland Army Depot are under construction and fully funded. Congress directed the Army to explore third-party funding for the center at Red River Army Depot.

    Recommendation: The Secretary of Defense should ensure that auditable AOD peacetime work load projections are developed using statistically valid forecasting principles.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: DOD did not concur with this recommendation. The centers at Sharpe Army Depot and New Cumberland Army Depot are under construction and fully funded. Congress directed the Army to explore third-party funding for the center at Red River Army Depot.

    Recommendation: The Secretary of Defense should ensure that the information necessary to identify the amount of excess capacity or capability needed to support emergencies and mobilization is developed.

    Agency Affected: Department of Defense

  3. Status: Closed - Not Implemented

    Comments: DOD did not concur with this recommendation. The centers at Sharpe Army Depot and New Cumberland Army Depot are under construction and fully funded. Congress directed the Army to explore third-party funding for the center at Red River Army Depot.

    Recommendation: The Secretary of Defense should ensure that options for improving the efficiency and capability of existing facilities to satisfy any projected work load increases are examined and the cost effectiveness of those options is compared with the current estimated cost of constructing new distribution centers.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: DOD did not concur with this recommendation. The centers at Sharpe Army Depot and New Cumberland Army Depot are under construction and fully funded. Congress directed the Army to explore third-party funding for the center at Red River Army Depot.

    Recommendation: The Secretary of Defense should ensure that AOD current operations and work load distribution imbalances are analyzed to identify potential economies and efficiencies to be gained by further consolidation or realignment of the AOD system.

    Agency Affected: Department of Defense

 

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