Depot Maintenance:

Workload Allocation Reporting Improved, but Lingering Problems Remain

NSIAD-99-154: Published: Jul 13, 1999. Publicly Released: Jul 13, 1999.

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Pursuant to a legislative requirement, GAO provided information on the Department of Defense's (DOD) distribution of depot maintenance workloads, focusing on: (1) DOD's compliance with the percentage requirement in 10 U.S.C. 2466; (2) comparing the results of DOD's recent report of fiscal year (FY) 1998 workload with prior years' reports; (3) the continuing weaknesses in the accuracy, completeness, and consistency of reported data; and (4) improvements in DOD's guidance, data collection processes, oversight, and opportunities to further improve the quality of future reports.

GAO noted that: (1) as submitted, DOD's report covering FY 1998 depot workloads would indicate that each of the covered military departments and the one reporting defense agency are in compliance with the 50-percent ceiling set by section 2466; (2) however, because of errors and inconsistencies in reporting, GAO could not determine whether DOD's departments and agencies were in compliance with the 50-percent ceiling for private sector performance; (3) further, consistent with DOD's stated plans, the private sector's portion of such work is continuing to increase; (4) DOD is collecting projected out-year obligation data that likely would have provided a more definitive outlook for future workload allocations, but has not yet completed its data collection and analysis of this data; (5) notwithstanding limitations in DOD's data, its report covering FY 1998 depot workloads was more comprehensive than prior years' reports because of improved guidance and, in the case of the Air Force, use of its audit agency to review its data; (6) DOD reported obligating a total of $14.1 billion for depot maintenance in FY 1998--about 37 percent more than was reported for fiscal year 1997; (7) the percentage reported going to the private sector increased from 37 to 42 percent between fiscal years 1997 and 1998, with much of the increase resulting from contractor logistics support and interim contract support; (8) the Office of the Secretary of Defense, the Air Force, and the Army have provided improved guidance and oversight for this year's report, and these actions resulted in more comprehensive reporting; (9) however, reporting requirements are unclear in certain areas such as distinctions between depot and other levels of maintenance and repair activities; (10) also, problems, occurred in this reporting cycle because guidance was not communicated to and understood by all organizational levels responsible for reporting; (11) further, data were not always reviewed for consistency and completeness within each service prior to submission to the Office of the Secretary of Defense; and (12) even once these issues are addressed, some subjectivity would likely continue because of difficulties in categorizing certain maintenance repair actions.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Although GAO's 50-50 reviews since the issuance of this report continue to find instances of inadequate documentation, OSD and the services have reemphasized its importance in guidance and in internal planning meetings. Also, the use of the service audit agencies--at least in the Army and Air Force--has resulted in some improvements as they provide another check on the quality and comprehensiveness of data. GAO expects that it will continue to see some deficiencies in documentation, particularly given the large number of reporting offices and the often high turnover of staff assigned to report 50-50 data.

    Recommendation: To improve the data collection and reporting processes, the Secretary of Defense, in conjunction with the secretaries of the military departments and commanders of the defense agencies and activities, should ensure retention of necessary documentation to verify workload allocations.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: OSD and the military services agreed with GAO's recommendation to make greater use of their audit agencies to verify data and validate collection procedures. In GAO's review of the 50/50 reports issued in 2000, it determined that the Navy made use of its audit agency for the first time, the Army expanded the use of its audit agency, and the Air Force continued to effectively employ its auditors. The auditing agencies' reviews identified many errors, which were corrected before being forwarded to OSD for consolidation and submission to the Congress.

    Recommendation: To improve the data collection and reporting processes, the Secretary of Defense, in conjunction with the secretaries of the military departments and commanders of the defense agencies and activities, should consider greater involvement of service audit agencies and statistical methods, as appropriate, to verify workload reporting data before the data is submitted to the Office of the Secretary of the Defense.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: In response to the recommendation, OSD and the military services increased management oversight to ensure reporting requirements were adequately and more widely communicated to reportable programs and organizations. During this year's 50/50 review, GAO noted several actions taken to better disseminate reporting responsibilities and achieve more accurate, comprehensive reporting. In all three military departments, more organizations reported depot data than in past years. (NSIAD-00-193).

    Recommendation: To improve the data collection and reporting processes, the Secretary of Defense, in conjunction with the secretaries of the military departments and commanders of the defense agencies and activities, should increase management emphasis and oversight to ensure reporting requirements are adequately communicated to all organizational levels responsible for providing workload reporting data.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: In response to the recommendation, OSD and the military services improved their data collection guidance in the specific problem areas GAO cited in the report and recommendation. During this year's 50/50 review, GAO determined that the services more fully and consistently reported depot workloads in these areas (NSIAD-00-193).

    Recommendation: To improve the data collection and reporting processes, the Secretary of Defense, in conjunction with the secretaries of the military departments and commanders of the defense agencies and activities, should provide additional clarifying guidance in areas of uncertainties such as those involving warranties that include the performance of maintenance, remanufacturing, and consolidation of depot and nondepot work at individual locations.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: Congress mandated the annual reporting of outyear public and private sector workload data in the fiscal year 2000 Defense Authorization Act. DOD made its intial reporting of projected workload allocations in April 2000, and GAO has reviewed, thus far, three reports of future-years projections.

    Recommendation: To improve the data collection and reporting processes, the Secretary of Defense, in conjunction with the secretaries of the military departments and commanders of the defense agencies and activities, should provide future years' projections along with the prior-year data, or as otherwise required by Congress.

    Agency Affected: Department of Defense

 

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