Defense Depot Maintenance:

DOD's Policy Report Leaves Future Role of Depot System Uncertain

NSIAD-96-165: Published: May 21, 1996. Publicly Released: May 21, 1996.

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Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) policy regarding depot-level maintenance and repair, focusing on the: (1) future role of defense depots; and (2) inconsistency of DOD policy with current statutes and congressional directives.

GAO found that: (1) the DOD depot maintenance policy calls for a greater mix of public and private-sector maintenance capabilities; (2) DOD will likely rely more on private-sector depots given the uncertainty of future workload assignments; (3) the policy is vague and offers no guidance as to how DOD should downsize its depot maintenance capacity; (4) the policy ignores congressional directives calling for competition between public and private-sector entities for non-core maintenance work; (5) under this policy, DOD depots would not be allowed to compete for non-core workloads even if they offer the most cost-effective source of repair; and (6) DOD needs to develop a system that allows excess capacity reduction and vigorous public-private competition between DOD depots and commercial firms.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Congress reaffirmed its desire that DOD should continue public-private competition in section 312 of the FY1997 Defense Authorization Act. Congress did not revoke 10 U.S.C. 2469, as requested by DOD.

    Matter: Since the DOD policy report did not provide for public-private competition consistent with the direction of section 311 of the 1996 Defense Authorization Act, Congress may wish to consider providing new direction regarding DOD use of public-private competition and the manner in which those competitions should be conducted.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: OSD and the services agreed that the recommendation would result in better and consistent decisions and DOD subsequently jointly developed a standard set of evaluative factors. These factors were approved by the Defense Depot Maintenance Council and supplemental guidance was issued to the services regarding processes and procedures to be followed in developing risk assessments, including specific factors to be evaluated.

    Recommendation: The Secretary of Defense should direct the military services to work with the Office of the Secretary of Defense to jointly develop consistent policies and methodologies for assessing private-sector repair capabilities and determining prudent risk thresholds for assigning mission essential workloads to the private sector. The methodology should, at a minimum, identify specific qualitative and quantitative factors to be evaluated in this process.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD depot maintenance policy continues to evolve slowly and only incrementally with a continued emphasis on outsourcing more workloads. At the same time, DOD must adapt policy in response to recent congressional legislation regarding the definition of depot maintenance, the amount that can be contracted out, competitions for depot work, and the workloads that must be done in the organic depots to meet core requirements.

    Recommendation: The Secretary of Defense should establish specific milestones for completing the new depot maintenance policy and individual guidance and criteria necessary to the implementation of the policy's various components.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: The DOD Logistics Strategic Plan, published in January 1998, includes metrics on depot maintenance cycle times, capacity utilization, costs, competitions, and infrastructure reductions. DOD and individual military department strategic and annual performance plans required under GPRA also contain performance goals and measures to reduce maintenance costs and improve responsive support to the warfighters. The January 14, 1997 Defense Depot Maintenance Council Business Plan includes depot capacity measures and describes service plans and initiatives to improve depot performance. Individual major commands have also included measurable goals in their annual plans. For example, the Air Force Materiel Command's strategic plan establishes numerical and time-bounded objectives to reduce depot flow days, cut maintenance costs to the customer, and divest unneeded infrastructure, among other objectives.

    Recommendation: The Secretary of Defense should develop a set of measurable goals to determine if the DOD depot maintenance policy is achieving the desired objectives, such as eliminating excess depot maintenance capacity, restructuring remaining depots to improve their efficiency and capacity utilization, decreasing depot maintenance costs, and improving readiness.

    Agency Affected: Department of Defense

 

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