Depot Maintenance: Issues in Management and Restructuring to Support a Downsized Military

GAO discussed the Department of Defense's (DOD) depot maintenance system. GAO noted that: (1) the depot maintenance system's estimated excess capacity is between 25 and 50 percent; (2) to reduce excess capacity and future depot maintenance costs, DOD and Congress need to eliminate depot duplication by improving interservice depot communication and more closely review capital equipment funding levels, acquisitions, and options for allocating work to the private sector; (3) although the amount of private-sector involvement in depot maintenance has consistently been about 33 percent, DOD needs to determine its core requirements and develop a comprehensive strategy to determine the level of future private-sector work; (4) Navy shipyards have implemented 82 percent of the total public-private competitions, while Army, Air Force, and Navy aviation depots implemented relatively few competitions; (5) projected cost savings from public-private competition initiatives have not been realized because there have been few competitions, and DOD needs to address contractor concerns about fairness; and (6) DOD needs to provide leadership in reorganizing its depot management structure to improve cross-service cooperation, eliminate excess capacity, and cost-effectively manage its depot maintenance operations.