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Setting Aircraft Availability Goals in the New Security Environment' 
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Report to the Chairman, Subcommittee on Readiness, Committee on Armed 
Services, House of Representatives:

United States General Accounting Office:

GAO:

April 2003:

MILITARY READINESS:

DOD Needs a Clear and Defined Process for Setting Aircraft Availability 
Goals in the New Security Environment:

Military Readiness:

GAO-03-300:

GAO Highlights:

Highlights of GAO-03-300, a report to the Chairman, Subcommittee on 
Readiness, Committee on Armed Services, House of Representatives 

Why GAO Did This Study:

The attacks on 9/11/2001 show that threats to U.S. security can now 
come from any number of terrorist groups, at any number of locations, 
and in wholly unexpected ways. As a result, the Department of Defense 
(DOD) is shifting to a new defense strategy focused on dealing with 
uncertainty by acting quickly across a wide range of combat 
conditions. One key ingredient of the new strategy is the availability 
of aircraft to carry out their missions. Key measures of availability 
include the percentage of time an aircraft can perform at least one or 
all of its assigned missions, termed the “mission capable” (MC) and 
“full mission capable” (FMC) rates, respectively.

At the Subcommittee’s request, GAO examined whether key DOD aircraft 
have been able to meet MC and FMC goals in recent years, and DOD’s 
process for setting aircraft availability goals.

What GAO Found:

Less than one-half of the 49 key active-duty aircraft models that GAO 
reviewed met their MC or FMC goals during fiscal years 1998-2002. The 
levels of mission capability varied by military service and type of 
aircraft, and the levels at which the goals were set also varied 
widely, even among the same type of aircraft. However, the MC and FMC 
goals for each model changed little over time. Since 1998, only 11 of 
49 aircraft models (22 percent) experienced a change to their goals. 
Seven of the changes were to raise the goals to higher levels. 
Difficulties in meeting the goals are caused by a complex combination 
of logistical and operational factors.

Despite their importance, DOD does not have a clear and defined 
process for setting aircraft availability goals. The goal-setting 
process is largely undefined and undocumented, and there is widespread 
uncertainty among the military services over how the goals were 
established, who is responsible for setting them, and the continuing 
adequacy of MC and FMC goals as measures of aircraft availability. 
Uncertainty and the lack of documentation in setting the goals 
ultimately obscures basic perceptions of readiness and operational 
effectiveness, undermines congressional confidence in the basis for 
DOD’s funding requests, and brings into question the appropriateness 
of those goals to the new defense strategy. DOD guidance does not 
define the availability goals that the services must establish or 
require any objective methodology for setting them. Nor does it 
require the services to identify one office as the coordinating agent 
for goal setting or to document the basis for the goals chosen. DOD 
officials told GAO that the guidance has not been updated since 1990 
to reflect the new security environment of increased deployments and 
other changes since the end of the Cold War.

What GAO Recommends:

GAO recommends that DOD review the current goals to ensure that they 
have a valid basis and are appropriate to the new defense strategy, 
and revise its instructions to ensure that such measures are based on 
a clearly defined and documented process and objective methodology. 
DOD concurred or partially concurred with all of GAO’s recommendations 
and outlined planned actions to address them.

www.gao.gov/cgi-bin/getrpt?GAO-03-300.

To view the full report, including the scope and methodology, click on 
the link above. For more information, contact Neal Curtin at 
(757) 552-8100 or Curtinn@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

DOD Aircraft Experienced Widespread Problems in Meeting MC and FMC 
Goals:

Mission Capable Problems Caused by a Combination of Factors:

DOD'S Goal-Setting Process Is Largely Undefined and Undocumented:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluation:

Appendix I: Mission Capable Goals and Rates, Fiscal Years 1991-2002:

Appendix II: Scope and Methodology:

Appendix III: Comments from the Department of Defense:

Appendix IV: GAO Contacts and Staff Acknowledgments:

Tables:

Table 1: Key DOD Aircraft Models:

Table 2: Air Combat Command Interim MC Goals, Fiscal Years 2000-2002:

Table 3: Aircraft Ages and 2002 MC Rates/Goals:

Figures:

Figure 1: Percentage of Aircraft Models Meeting MC and FMC Goals, 
Fiscal Years 1998-2002:

Figure 2: Percentage of Aircraft Models Meeting MC Goals by Service, 
Fiscal Years 1998-2002:

Figure 3: Average Annual MC Rates by Service, Fiscal Years 1998-2002:

Figure 4: Average Annual FMC Rates by Service, Fiscal Years 1998-2002:

Figure 5: Average Annual MC Rates by Aircraft Type, Fiscal Years 1998-
2002:

Figure 6: Average Annual FMC Rates by Aircraft Type, Fiscal Years 1998-
2002:

Abbreviations:

DOD: Department of Defense:

FMC: full mission capable:

GAO: General Accounting Office:

MC: mission capable:

United States General Accounting Office:

Washington, DC 20548:

April 7, 2003:

The Honorable Joel Hefley 
Chairman 
Subcommittee on Readiness 
Committee on Armed Services 
House of Representatives:

Dear Mr. Chairman:

The terrorist attacks on September 11, 2001, clearly demonstrated that 
the U.S. security landscape has changed. The familiar Cold War threats 
of large-scale wars between nation states in predictable areas such as 
the Koreas and the Middle East have been joined by a broad array of new 
threats characterized by surprise and uncertainty. Attacks on U.S. 
security can now come from any number of terrorist groups such as al 
Qaeda, in any number of locations, and in wholly unexpected ways. As a 
result of the changed security environment, the Department of Defense 
(DOD) has rethought defense strategy and is shifting to a 
"capabilities-based" approach focused on contending with uncertainty by 
enhancing its ability to act quickly and decisively across a wide range 
of combat conditions and locations.

One key ingredient of the new strategy is the availability of aircraft 
to carry out their assigned missions. DOD requires each military 
service to establish availability goals for aircraft and other major 
weapon systems, and measures of the degree to which those goals are 
met.[Footnote 1] Key measures include the percentage of time that an 
aircraft can perform at least one or all of its assigned missions, 
termed the "mission capable" (MC) and "full mission capable" (FMC) 
rates, respectively. MC and FMC goals and rates are fundamental 
indicators of readiness expectations. They are also used by DOD as 
indicators of maintenance and supply effectiveness and are made 
available to the Congress for its general oversight of DOD. Moreover, 
the level at which the goals are set also influences large amounts of 
military spending for aircraft procurements, spare parts inventories, 
and other resources needed to meet the goals. However, our recent 
reports have identified problems in meeting MC goals among certain 
aircraft. For example, we reported in June 2000 that many of the cargo 
aircraft needed to meet wartime airlift requirements were not meeting 
MC goals.[Footnote 2]

Concerned that the new capabilities-based strategy may be difficult to 
carry out if aircraft are experiencing problems in meeting existing 
availability goals, you requested that we examine DOD's structure for 
establishing MC and FMC goals for aircraft in the Air Force, Army, 
Navy, and Marine Corps. This report addresses (1) whether key active-
duty aircraft have been able to meet existing MC and FMC goals, (2) the 
causes of any difficulties in meeting those goals, and (3) whether DOD 
has a clear and defined process for setting aircraft availability 
goals. We performed our review from February through November 2002 in 
accordance with generally accepted government auditing standards. 
Appendix II describes the scope and methodology of our work.

Results in Brief:

Less than one-half of DOD's key active-duty aircraft models have met 
their MC and FMC goals since 1998.[Footnote 3] For example, during 
fiscal years 1998-2002, only 23-35 percent of the 49 aircraft models we 
reviewed were able to meet their MC goals. Similarly, some 31-49 
percent of the models met their FMC goals during the same period. In 
most cases, the actual rates were at least 5 percentage points below 
the goals. The level of mission capability varied by military service 
and by type of aircraft. The Army and Air Force had the highest average 
MC rates, at 77-83 percent over the past 5 years; followed by the 
Marines, at about 71-75 percent; and the Navy, at 61-67 percent. Rates 
have increased slightly since fiscal year 2001 in all services except 
the Navy. Average MC rates were the highest for helicopters, at 76-80 
percent; followed by cargo aircraft and tankers, at 75-79 percent; 
fighter/attack aircraft, at 75-77 percent; bombers, at 64-69 percent; 
and electronic command/control aircraft, at 60-67 percent. Average FMC 
rates followed similar rank order patterns. The level at which the 
goals were set showed little consistency, varying widely even among the 
same type of aircraft. For example, MC goals for the bombers and 
fighters in our review ranged from 50 to 80 percent and 65 to 83 
percent, respectively. While the level at which the goals were set 
showed little consistency, MC and FMC goals have changed little over 
time. Since 1998, only 11 of 49 aircraft models (22 percent) 
experienced a change to their goals. Seven of these changes were to 
raise the goals.

Difficulties in meeting the goals are caused by a combination of 
interrelated logistical and operational factors, with no dominating 
single problem. For example, depending upon the missions and 
capabilities it was designed to provide, each aircraft can be 
inherently complex and prone to failure or be simple and easy to 
maintain and available more often. Complex aircraft require well-
trained and experienced maintenance personnel. However, service 
officials frequently cited shortages of such personnel as a key cause 
of difficulties in meeting MC goals, and we have cited this as a major 
problem area for years. Age and overuse of the aircraft were cited as 
key factors as well. While age may affect MC rates, we found no 
statistical evidence that age alone explains the difficulties in 
meeting the MC goals. MC rates are also undermined by spare parts 
shortages. Such shortages may be particularly troublesome for older 
aircraft as they near the end of their projected life and spare parts 
inventories are reduced. We have previously reported on problems with 
spare parts shortages, and DOD is taking steps to increase the 
inventories of some parts.[Footnote 4] Finally, perceived low funding 
levels and the way that maintenance systems are structured were also 
viewed as keys to low MC rates. For example, increases in the use of 
centralized depot-level maintenance were cited as a cause of 
maintenance delay and lowered MC rates. We have raised concerns for 
years that DOD's downsizing of its depot infrastructure and workforce 
was done without sound strategic planning and that investments in 
facilities, equipment, and personnel have not been sufficient to ensure 
the long-term viability of the depots.

DOD does not have a clear and defined process for setting aircraft 
availability goals. DOD's goal-setting process is largely undefined and 
undocumented, and there is widespread uncertainty among the services 
over how the goals were established and who is responsible for setting 
them. Furthermore, the services have basic questions about the adequacy 
of those goals as measures of aircraft availability. Uncertainty and 
the lack of documentation in setting MC and FMC goals ultimately 
obscures basic perceptions of readiness and operational effectiveness, 
undermines congressional confidence in the basis for funding requests, 
and brings into question the appropriateness of those goals to the new 
defense strategy. For example, the services could not explain and 
document how the original MC and FMC goals were set for any of the 
aircraft in our review. Navy and Air Force officials believed that the 
goals were generally based on analyses of historical performance rates 
of similar aircraft and/or subjective judgment. Moreover, in many 
cases, the services identified multiple offices as being responsible 
for setting the goals. But when contacted, each believed that the other 
was responsible. Some officials questioned which goals--the MC goals, 
the FMC goals, or some other goal--were the right ones to use in the 
new security environment. For example, a new measure of aircraft 
availability is being developed for the new Joint Strike Fighter, and 
MC and FMC goals are not being used. DOD's instruction provides little 
or no guidance on these and other key issues.[Footnote 5] For example, 
it requires the services to establish availability goals but does not 
define which goals should be established, even though it specifically 
requires the services to collect condition status information on MC, 
FMC, and other availability measures. The instruction also provides no 
standardized methodology for setting goals, requiring only that they 
include estimates of maximum aircraft performance, assuming peacetime 
usage levels and full funding of logistical support systems. Nor does 
it require the services to identify the pros and cons of setting the 
goals at different levels and the guiding principles used to make those 
decisions. Finally, it does not require the services to identify one 
office as the coordinating agent for goal setting or to document the 
basis for the goals chosen. DOD officials told us that the instruction 
has not been updated since 1990 to reflect the new security environment 
of increased deployments and other changes since the end of the Cold 
War.

To ensure that aircraft availability goals are appropriate to the new 
defense strategy and consistent with a clear and defined process, we 
are recommending that DOD and the services (1) determine whether 
different types of goals are needed; (2) validate the basis for the 
existing goals; and (3) revise Instruction 3110.5 to clearly define the 
goals required to be established and their performance measures, 
establish a standard methodology with objective principles of analysis 
to be used by all services in setting goals, and require each service 
to identify a focal point for the development and documentation of the 
goal setting process.

In comments on a draft of this report, DOD generally agreed with our 
recommendations. However, it believed that including the performance 
measures associated with the goals in Instruction 3110.5 would result 
in their being used as the primary measure of the overall state of 
materiel readiness. We agree that determinations of overall materiel 
readiness require consideration of a variety of factors beyond those 
identified in Instruction 3110.5. However, to avoid confusion and 
misunderstanding about basic aircraft performance, it is necessary to 
clearly identify the performance measures associated with the 
availability goals selected. This does not preclude the use of other 
metrics in broader assessments of materiel readiness. DOD also believed 
that the individual services, not the department, should be responsible 
for establishing their own detailed methodologies for goal setting 
because of the potential for variations in service environments and the 
types of goals used. We also agree that the services should have some 
leeway to accommodate differences between them. However, we continue to 
believe that all services should adhere to a standard set of 
overarching principles of analysis to safeguard objectivity and 
transparency in the goal-setting process. Such principles could be 
established in coordination with the services. The services could then 
develop detailed methodologies consistent with these principles but 
tailored to their own environments. For these reasons we made no change 
to our recommendations.

Background:

DOD aircraft are used to perform a variety of different missions. 
However, for the purpose of this report, we have grouped them into five 
basic categories: (1) various models of fighter/attack aircraft, such 
as the F/A-18 Hornet, provide air superiority or close air support of 
ground forces; (2) bombers, such as the B-1 Lancer, provide long-and 
short-range delivery of heavy munitions; (3) electronic command and 
control aircraft, such as the E-3 Sentry, provide airspace and 
battlefield reconnaissance, command, and control services; (4) tankers 
and cargo aircraft, such as the KC-135 Stratotanker and the C-5 Galaxy, 
respectively, provide air refueling services and the ability to carry 
troops and equipment anywhere in the world; and (5) helicopters, with 
their ability to hover as well as conduct long-and short-range 
operations, are used for a variety of missions, including 
transportation of troops and equipment, air assault and reconnaissance, 
and search and rescue operations. Our review included a total of 49 
different aircraft models (over 5,600 individual aircraft in 2002) in 
these five categories.[Footnote 6] These aircraft were considered by 
the services to be their key active-duty operational aircraft.[Footnote 
7] Table 1 lists these aircraft models, along with the military service 
using them, and their MC and FMC goals for fiscal year 2002.

Table 1: Key DOD Aircraft Models:

2002 mission capable/full mission capable goals in percents.

Fighter/Attack aircraft: A-10 Thunderbolt; Aircraft Service: Air 
Force; Goal: 82[A]/NA[B]; Bombers: B-1 Lancer; Air Force; 67[A]/NA[B]; 
Electronic command/control: E-3 Sentry; Air Force; 85[A]/NA[B]; 
Tankers/Cargo aircraft: C-5 Galaxy; Air Force; 75[A]/45[B]; 
Helicopters: AH-64A Apache; Aircraft Service: Army; Goal: 75[A]/70[B].

Fighter/Attack aircraft: F-15 Eagle; Aircraft Service: Air Force; 
Goal: 83[A]/NA[B]; Bombers: B-2 Spirit; Air Force; 50[A]/NA[B]; 
Electronic command/control: E-8 Joint Stars; Air Force; 75[A]/NA[B]; 
Tankers/Cargo aircraft: C-17 Globemaster; Air Force; 88[A]/78[B]; 
Helicopters: AH-64D Apache; Aircraft Service: Army; Goal: 75[A]/70[B].

Fighter/Attack aircraft: F-15E Eagle; Aircraft Service: Air Force; 
Goal: 81[A]/NA[B]; Bombers: B-52 Stratofortress; Air Force; 
80[A]/NA[B]; Electronic command/control: RC-135 Rivet Joint; Air 
Force; 75[A]/NA[B]; Tankers/Cargo aircraft: C-130 Hercules; Air Force; 
75[A]/48[B]; Helicopters: UH-60A Black Hawk; Aircraft Service: Army; 
Goal: 80[A]/75[B].

Fighter/Attack aircraft: F-16 Fighting Falcon; Aircraft Service: Air 
Force; Goal: 83[A]/NA[B]; Electronic command/
control: U-2; Air Force; 85[A]/NA[B]; Tankers/Cargo aircraft: C-141 
Starlifter; Air Force; 80[A]/59[B]; Helicopters: UH-60L Black Hawk; 
Aircraft Service: Army; Goal: 80[A]/75[B].

Fighter/Attack aircraft: F-117 Nighthawk; Aircraft Service: Air Force; 
Goal: 80[A] /NA[B]; Electronic command/control: S-3B 
Viking; Navy; 70[A]/54[B]; Tankers/Cargo aircraft: KC-135 
Stratotanker; Air Force; 85[A]/77[B]; Helicopters: CH-47D Chinook; 
Aircraft Service: Army; Goal: 75[A]/70[B].

Fighter/Attack aircraft: F-14A Tomcat; Aircraft Service: Navy; Goal: 
65[A]/50[B]; Electronic command/control: E-2C 
Hawkeye; Navy; 70[A]/54[B]; Tankers/Cargo aircraft: KC-10 Extender; 
Air Force; 85[A]/77[B]; Helicopters: OH-58D Kiowa; Aircraft Service: 
Army; Goal: 75[A]/70[B].

Fighter/Attack aircraft: F-14B Tomcat; Aircraft Service: Navy; Goal: 
65[A]/50[B]; Electronic command/control: P-3C Orion; 
Navy; 85[A]/61[B]; Tankers/Cargo aircraft: KC-130F Hercules; Marines; 
72[A]/53[B]; Helicopters: SH-60B Seahawk; Aircraft Service: Navy; 
Goal: 77[A]/58[B].

Fighter/Attack aircraft: F-14 D Tomcat; Aircraft Service: Navy; Goal: 
71[A]/61[B]; Electronic command/control: EA-6B 
Prowler; Navy/ Marines; 73[A]/54[B]; Tankers/Cargo aircraft: KC-130R 
Hercules; Marines; 75[A]/58[B]; Helicopters: SH-60F Seahawk; Aircraft 
Service: Navy; Goal: 75[A]/60[B].

Fighter/Attack aircraft: F/A-18A Hornet; Aircraft Service: Navy/
Marines; Goal: 75[A]/58[B]; Helicopters: 
MH-53E Sea Dragon; Aircraft Service: Navy; Goal: 70[A]/60[B].

Fighter/Attack aircraft: F/A-18C Hornet; Aircraft Service: Navy/
Marines; Goal: 75[A]/58[B]; Helicopters: CH-46E 
Sea Knight; Aircraft Service: Marines; Goal: 80[A]/77[B].

Fighter/Attack aircraft: F/A-18D Hornet; Aircraft Service: Marines; 
Goal: 75[A]/58[B]; Helicopters: CH-53D Sea 
Stallion; Aircraft Service: Marines; Goal: 73[A]/65[B].

Fighter/Attack aircraft: F/A-18E Super Hornet; Aircraft Service: Navy; 
Goal: 75[A] /58[B]; Helicopters: CH-53E Super 
Stallion; Aircraft Service: Marines; Goal: 70[A]/60[B].

Fighter/Attack aircraft: AV-8B Harrier; Aircraft Service: Marines; 
Goal: 76[A]/70[B]; Helicopters: AH-1W Super 
Cobra; Aircraft Service: Marines; Goal: 85[A]/75[B].

Helicopters: UH-1N Huey; Aircraft Service: Marines; Goal: 85[A]/75[B].

Source: Military services' records.

Legend: NA = not applicable.

[A] 2002 mission capable goal.

[B] 2002 full mission capable goal.

[End of table]

DOD Instruction 3110.5, dated September 1990, requires all military 
services to establish quantitative availability goals and corresponding 
condition status measurements for these aircraft and other mission-
essential systems and equipment. The goals established must estimate 
the maximum aircraft performance that is achievable on the basis of the 
aircraft's design characteristics and planned peacetime usage, and 
assuming full funding and optimal operation of the peacetime manpower 
and logistic support systems. Military personnel, civilian contractors, 
or both may perform the required maintenance under these systems. The 
instruction prescribes a basic set of condition status measures, 
including FMC, partial MC, and MC, that each service must use to 
describe the capability of systems or equipment. FMC indicates that an 
aircraft has all of the mission-essential systems and equipment it 
needs to perform all of its missions installed and operating safely. 
Mission-essential systems are those required to perform primary 
functions such as fire control, bombing, communications, electronic 
countermeasures, or radar. Partial MC indicates that an aircraft has 
the operable mission-essential equipment it needs to perform at least 
one of its missions, but not all. For example, an aircraft expected to 
be able to carry troops into combat during wartime in all weather 
conditions, as well as to be able to fly humanitarian missions during 
peacetime, would be considered partial MC if some of its equipment were 
broken and it could fly only humanitarian missions in clear weather. MC 
consists of the sum of the partial MC and FMC measures; that is, the 
number of MC aircraft is equivalent to the sum of the aircraft rated 
partial MC and the aircraft rated FMC. This report focuses on MC and 
FMC goals because the Army, Navy/Marines, and parts of the Air Force do 
not establish separate partial MC goals.

DOD Aircraft Experienced Widespread Problems in Meeting MC and FMC 
Goals:

Many of DOD's key aircraft have been unable to meet their MC and FMC 
goals since at least 1998. For example, during fiscal years 1998-2002, 
only 23-35 percent of the 49 aircraft models we reviewed were able to 
meet their MC goals, and 31-49 percent met their FMC goals.[Footnote 8] 
In most cases, the actual rates were at least 5 percentage points below 
the goals. Average MC and FMC rates varied by service and type of 
aircraft. For example, the Army and Air Force had the highest average 
MC rates, followed by the Marines and the Navy. These rates have 
increased slightly since fiscal year 2001 in all services except the 
Navy. Among aircraft types, the average MC rates varied from 60 to 80 
percent. Average MC rates were the highest for helicopters, followed by 
cargo aircraft and tankers, fighter/attack aircraft, bombers, and 
electronic command/control aircraft. While the rates have fluctuated, 
MC and FMC goals have generally remained constant over time. Since 
1998, only 11 of 49 aircraft models (22 percent) experienced a change 
to their goals--and 7 of these changes were to raise the goals.

Less Than One-Half of the Aircraft Models Met Goals:

DOD's key, high-demand aircraft have experienced widespread 
difficulties in meeting MC and FMC goals since at least 1998. (Appendix 
I provides a full listing of MC and FMC goals, rates, and other 
information by year for each aircraft model we reviewed.) For example, 
during fiscal years 1998-2002, the percentage of aircraft models 
meeting their MC goals never exceeded 35 percent. (See fig. 
1.)[Footnote 9] During this period, the rates for the individual 
aircraft models were more than 5 percentage points below their MC goals 
in 62 percent of the cases. The percentage of aircraft models meeting 
FMC goals during the same period ranged from 31 to 49 percentage 
points, and 71 percent of the cases were more than 5 percentage points 
below the goals.

Figure 1: Percentage of Aircraft Models Meeting MC and FMC Goals, 
Fiscal Years 1998-2002:

[See PDF for image]

[End of figure]

At the service level, Army aircraft generally met their MC goals the 
most frequently, followed by the Marine Corps, Air Force, and Navy. 
(See fig. 2.) The same rank order held for FMC goals.

Figure 2: Percentage of Aircraft Models Meeting MC Goals by Service, 
Fiscal Years 1998-2002:

[See PDF for image]

[End of figure]

As previously shown in table 1, the level at which the goals were set 
showed little consistency, varying widely even among the same type of 
aircraft. For example, MC goals for the bombers in our review ranged 
from 50 to 80 percent, and MC goals for the fighters, from 65 to 83 
percent.

Actual MC Rates Varied by Service and Type of Aircraft:

Actual MC rates also varied between services and the various aircraft 
types. MC and FMC rates are based on the ratio of the number of hours 
an aircraft was actually available to the total number of hours it 
could have been available. The Navy/Marines and Air Force reduce the 
latter figure by the amount of time an aircraft was away for scheduled 
depot maintenance, while the Army does not make this adjustment. We 
computed the average rates by service and aircraft type from service 
data on the total number of hours each aircraft model was MC and FMC, 
and the total hours each aircraft model was available each year.

The average annual MC and FMC rates for the services as a whole are 
shown in figures 3 and 4. The Army and the Air Force had the highest 
average MC rates, at 77-83 percent during fiscal years 1998-2002; 
followed by the Marines, at about 71-75 percent; and the Navy, at 61-67 
percent. A similar pattern follows for the average FMC rates for the 
services.

Figure 3: Average Annual MC Rates by Service, Fiscal Years 1998-2002:

[See PDF for image]

[End of figure]

Figure 4: Average Annual FMC Rates by Service, Fiscal Years 1998-2002:

[See PDF for image]

[End of figure]

When grouped by type of aircraft, average annual MC rates were highest 
for helicopters (76-80 percent), cargo/tankers (75-79 percent), and 
fighter/attack aircraft (75-77 percent). Average annual MC rates for 
bombers (64-69 percent) and electronic command/control aircraft (60-67 
percent) were somewhat lower. Average FMC rates showed similar rank 
orders. (See figs. 5 and 6.):

Figure 5: Average Annual MC Rates by Aircraft Type, Fiscal Years 1998-
2002:

[See PDF for image]

Note: EC/C refers to electronic command and control aircraft:

[End of figure]

Figure 6: Average Annual FMC Rates by Aircraft Type, Fiscal Years 1998-
2002:

[See PDF for image]

Note: EC/C refers to electronic command and control aircraft.

[End of figure]

Goals Generally Remained Constant over Time:

MC and FMC goals have generally remained constant over time. Since 
1998, only 11 of 49 aircraft models (22 percent) experienced a change 
to their MC goals, FMC goals, or both. Seven models had their goals 
raised, and three had their goals lowered. One model's MC goal was 
changed but then returned to its initial level. Ten of the 11 changes 
were for aircraft operated by the Air Force. The remaining change was 
for a Marine Corps aircraft. (See app. I for additional details.):

In fiscal year 2002, for example, the Air Force raised the MC goal for 
its E-8 Joint Stars electronic command and control aircraft from 73 to 
75 percent. According to officials, the E-8 is a relatively new (3-
year-old) aircraft that is slowly increasing its performance level as 
it matures and Air Force maintenance personnel understand the aircraft 
better. The increase in the MC rate was based on an analysis of actual 
E-8 MC rates that were showing an upward trend in performance. The Air 
Force is the only service that routinely conducts formal reviews of its 
goals. Air Force officials told us that they generally try to keep the 
goals high because it is difficult to stop the goals from dropping 
further once they begin to be lowered. Moreover, officials believed 
that contractors need to be held to high standards to keep spare parts 
inventories and other aspects of maintenance at high levels. In another 
case, the MC goal for the Marine Corps' F/A-18D Hornet fighter was 
raised from 60 to 75 percent, and its FMC goal, from 46 to 58 percent 
at the beginning of fiscal year 2000. According to Navy documents, this 
increase was due to a change in the aircraft's assigned mission.

While most of the goals were either unchanged or increased, the Air 
Force's Air Combat Command developed a set of interim goals in fiscal 
year 2000 for some of the fighters, bombers, and electronic command/
control aircraft under its command. These interim goals were lower than 
its official MC goals.[Footnote 10] In 1999, the Command determined 
that problems with suppliers and manpower shortages were undercutting 
its ability to meet MC goals and lowering unit morale. To combat this 
problem, the Command developed the interim goals listed in table 2. In 
2002, the Command returned to using the pre-2000 goals for all but six 
aircraft (A-10, E-3, F-15 C/D, F-15 E, RC-135, and U-2). According to 
Command officials, the lower goals applied only to their units. Goals 
for suppliers remained at official levels to keep spare parts 
inventories high. Neither the other services nor the Air Force's other 
major commands responsible for aircraft operations have developed 
interim goals.

Table 2: Air Combat Command Interim MC Goals, Fiscal Years 2000-2002:

Percent.

A-10; 2000: MC goal: 84; 2000: Interim goal: 74; 2001: MC goal: 84; 
2001: Interim goal: 78; 2002: MC goal: 82; 2002: Interim goal: 78.

B-1; 2000: MC goal: 67; 2000: Interim goal: 57; 2001: MC goal: 67; 
2001: Interim goal: 63; 2002: MC goal: 67; 2002: Interim goal: NA.

B-52; 2000: MC goal: 80; 2000: Interim goal: 79; 2001: MC goal: 80; 
2001: Interim goal: NA; 2002: MC goal: 80; 2002: Interim goal: NA.

E-3; 2000: MC goal: 85; 2000: Interim goal: 73; 2001: MC goal: 85; 
2001: Interim goal: 81; 2002: MC goal: 85; 2002: Interim goal: 83.

F-15 C/D; 2000: MC goal: 83; 2000: Interim goal: 75; 2001: MC goal: 83; 
2001: Interim goal: 77; 2002: MC goal: 83; 2002: Interim goal: 81.

F-15 E; 2000: MC goal: 80; 2000: Interim goal: 75; 2001: MC goal: 80; 
2001: Interim goal: 77; 2002: MC goal: 81; 2002: Interim goal: 77.

F-16; 2000: MC goal: 84; 2000: Interim goal: 79; 2001: MC goal: 84; 
2001: Interim goal: 81; 2002: MC goal: 83; 2002: Interim goal: NA.

RC-135; 2000: MC goal: 75; 2000: Interim goal: 65; 2001: MC goal: 75; 
2001: Interim goal: 72; 2002: MC goal: 75; 2002: Interim goal: 72.

U-2; 2000: MC goal: 85; 2000: Interim goal: 83; 2001: MC goal: 85; 
2001: Interim goal: 84; 2002: MC goal: 85; 2002: Interim goal: 80.

Source: U.S. Air Force, Air Combat Command.

Legend: NA = not applicable:

[End of table]

Mission Capable Problems Caused by a Combination of Factors:

According to DOD officials, difficulties in meeting MC and FMC goals 
are caused by a complex combination of interrelated logistical and 
operational factors, with no dominating single problem. The complexity 
of aircraft design, the lack of availability and experience of 
maintenance personnel, aircraft age and usage patterns, shortages of 
spare parts, depot maintenance systems and other operational factors, 
and perceived funding shortages were all identified as causes of 
difficulties in meeting the goals. As indicated below, our work found 
that some indicated factors were valid causes, while the impact of 
others was less certain.

Aircraft Design Considered Key:

Officials believe that the complexity of military aircraft affects its 
availability, and thus its ability to meet MC goals. Military aircraft 
are designed to handle a specific set of missions and provide a 
specific set of capabilities over a projected useful lifespan. 
According to officials, each aircraft can be inherently complex and 
maintenance intensive, or, depending upon the missions and capabilities 
it was designed to provide, simple and easy to maintain. For example, 
the B-2 bomber had the lowest MC rates (32-44 percent) of any aircraft 
we reviewed. However, according to Air Combat Command officials, one 
reason for these low rates is the complex design of the aircraft. The 
B-2 is a very advanced aircraft with low observable (stealthy) 
characteristics using new composite materials, and Air Force personnel 
are still learning how to maintain the aircraft. In contrast, the B-52 
bomber had some of the highest MC rates (76-84 percent) of all the 
aircraft we reviewed. According to Air Force officials, the B-52 is a 
relatively simple and flexible design intended for ease of maintenance 
and durability.

Availability and Experience of Maintenance Personnel Have an Impact:

Service officials also frequently linked shortages of the total number 
of maintenance personnel, as well as their experience level, to the 
failure to meet MC goals. Navy officials told us that the growing 
sophistication of their aircraft in general requires maintenance 
personnel to take longer to learn the complex computer and electronic 
skills needed to handle the aircraft. However, high demand for these 
skills in the private sector makes it difficult to retain personnel 
with these maintenance skills, leading to turnover and increasing the 
difficulty in meeting the MC goals. Similarly, a recent study published 
in the Air Force Journal of Logistics found that the number and 
experience level of maintenance personnel correlated highly with the MC 
rates of F-16 aircraft.[Footnote 11] As the number of experienced 
personnel assigned to an aircraft increased, the MC rates increased as 
well. Army officials also cited shortages of experienced maintenance 
personnel as a cause of lower MC and FMC rates. However, they also 
stated that it may be possible to raise the rates by maximizing the 
time that maintenance personnel actually spend maintaining the 
aircraft. For example, one Army Audit Agency study in 1998 found that 
maintenance personnel at one unit were spending about 70 percent of 
their time on nonmaintenance activities such as administrative duties, 
training, and time attending to personal duties.[Footnote 12]

Personnel management is an area that we have cited as a major 
management challenge and program risk for DOD.[Footnote 13] For years, 
DOD has been wrestling with shortages of key personnel because of 
retention problems. In 1999 we reported that the majority of factors 
cited as sources of dissatisfaction and reasons to leave the military 
were related to work circumstances, such as the lack of spare parts and 
materials needed to perform daily job requirements.[Footnote 14]

Aircraft Age and Usage Patterns Also Believed to Influence 
Availability:

The advancing age and usage patterns of aircraft were other factors 
often cited by service officials as reasons why aircraft did not meet 
MC goals. DOD's inventory of aircraft is getting older. The 
Congressional Budget Office recently reported that from 1980 to 2000, 
the average age of active-duty Navy aircraft rose from 11 years to more 
than 16 years; Air Force aircraft, from 13 to more than 20 years; and 
Army helicopters, from 10 to over 17 years.[Footnote 15] Logistics 
officials told us that aging influences on MC rates typically follow a 
cyclical pattern over the life of an aircraft. When aircraft are 
initially introduced, they go through a "shake down" period and have 
low MC rates as new equipment and supply systems stabilize and 
maintenance personnel learn to understand the aircraft. Eventually, MC 
rates begin to rise and then stabilize at a higher working level. 
However, as more and more flying time is accrued over the passing 
years, problems due to materials and parts fatigue, corrosion, and 
obsolescence increase, and MC rates begin to fall again. Modernization 
programs are then instituted to replace worn and obsolete equipment, 
and the pattern begins again.

Although age may affect MC rates, we found no statistical evidence that 
age alone explains difficulties in meeting MC goals. For example, our 
analysis of average aircraft ages and 2002 MC rates found no indication 
that older aircraft have the lowest MC rates. (See table 3.)[Footnote 
16] With an average age of 40 years, the B-52 is the second oldest 
aircraft in DOD's inventory. However, its MC rate of 81 for 2002 and 
historical MC rates consistently in the upper 70s and low 80s rank it 
among the highest performers we reviewed. According to Air Force 
officials at the Air Combat Command, in addition to their simplicity, 
B-52s have a relatively low number of actual flight hours, averaging 
about 16,000 hours each despite their age. These officials believed 
that accrued flight hours are a more appropriate measure of wear and 
tear than chronological age. Moreover, according to these officials, 
the B-52 was originally scheduled to retire in the mid-1990s. However, 
because of its durability and flexibility, the Air Force decided to 
retain the aircraft until the average age reaches 32,000 hours, 
projected at about 2040.

Table 3: Aircraft Ages and 2002 MC Rates/Goals:

Aircraft: model: KC-130F; Average age (years): 40.1; 2002 MC rate/goal 
(percent): 64/72; Aircraft: model: F-14D; Average: age (years): 15.3; 
2002 MC rate/goal: (percent): 67/71.

Aircraft: model: B-52; Average age (years): 40.0; 2002 MC rate/goal 
(percent): 81/80; Aircraft: model: B-1; Average: age (years): 14.6; 
2002 MC rate/goal: (percent): 61/67.

Aircraft: model: KC-135; Average age (years): 39.6; 2002 MC rate/goal 
(percent): 82/85; Aircraft: model: CH-47D; Average: age (years): 14.4; 
2002 MC rate/goal: (percent): 75/75.

Aircraft: model: RC-135; Average age (years): 38.3; 2002 MC rate/goal 
(percent): 76/75; Aircraft: model: AH-64A; Average: age (years): 14.2; 
2002 MC rate/goal: (percent): 83/75.

Aircraft: model: C-141; Average age (years): 35.0; 2002 MC rate/goal 
(percent): 74/80; Aircraft: model: SH-60B; Average: age (years): 13.7; 
2002 MC rate/goal: (percent): 63/77.

Aircraft: model: CH-46E; Average age (years): 33.6; 2002 MC rate/goal 
(percent): 76/80; Aircraft: model: CH-53E; Average: age (years): 13.7; 
2002 MC rate/goal: (percent): 70/70.

Aircraft: model: CH-53D; Average age (years): 31.9; 2002 MC rate/goal 
(percent): 78/73; Aircraft: model: AH-1W; Average: age (years): 12.3; 
2002 MC rate/goal: (percent): 73/85.

Aircraft: model: C-130; Average age (years): 29.2; 2002 MC rate/goal 
(percent): 81/75; Aircraft: model: MH-53E; Average: age (years): 11.5; 
2002 MC rate/goal: (percent): 48/70.

Aircraft: model: UH-1N; Average age (years): 27.6; 2002 MC rate/goal 
(percent): 69/85; Aircraft: model: F-16; Average: age (years): 11.1; 
2002 MC rate/goal: (percent): 80/83.

Aircraft: model: S-3B; Average age (years): 26.2; 2002 MC rate/goal 
(percent): 43/70; Aircraft: model: F-117; Average: age (years): 10.7; 
2002 MC rate/goal: (percent): 83/80.

Aircraft: model: KC-130R; Average age (years): 25.4; 2002 MC rate/goal 
(percent): 65/75; Aircraft: model: SH-60F; Average: age (years): 10.6; 
2002 MC rate/goal: (percent): 54/75.

Aircraft: model: P-3C; Average age (years): 24.5; 2002 MC rate/goal 
(percent): 61/85; Aircraft: model: F-15E; Average: age (years): 10.2; 
2002 MC rate/goal: (percent): 76/81.

Aircraft: model: E-3; Average age (years): 22.0; 2002 MC rate/goal 
(percent): 74/85; Aircraft: model: F/A-18C-Navy; Average: age (years): 
10.2; 2002 MC rate/goal: (percent): 66/75.

Aircraft: model: F-14A; Average age (years): 21.0; 2002 MC rate/goal 
(percent): 69/65; Aircraft: model: F/A-18C-Marine; Average: age 
(years): 10.2; 2002 MC rate/goal: (percent): 82/75.

Aircraft: model: A-10; Average age (years): 20.1; 2002 MC rate/goal 
(percent): 76/82; Aircraft: model: E-2C; Average: age (years): 10.2; 
2002 MC rate/goal: (percent): 51/70.

Aircraft: model: C-5; Average age (years): 20.0; 2002 MC rate/goal 
(percent): 66/75; Aircraft: model: F/A-18D; Average: age (years): 9.6; 
2002 MC rate/goal: (percent): 78/75.

Aircraft: model: EA-6B-Navy; Average age (years): 19.8; 2002 MC rate/
goal (percent): 58/73; Aircraft: model: OH-58D; Average: age (years): 
8.5; 2002 MC rate/goal: (percent): 88/75.

Aircraft: model: EA-6B-Marine; Average age (years): 19.8; 2002 MC rate/
goal (percent): 68/73; Aircraft: model: UH-60L; Average: age (years): 
7.6; 2002 MC rate/goal: (percent): 84/80.

Aircraft: model: F-15C/D; Average age (years): 18.7; 2002 MC rate/goal 
(percent): 79/83; Aircraft: model: B-2; Average: age (years): 7.4; 2002 
MC rate/goal: (percent): 44/50.

Aircraft: model: UH-60A; Average age (years): 18.4; 2002 MC rate/goal 
(percent): 76/80; Aircraft: model: AV-8B; Average: age (years): 7.0; 
2002 MC rate/goal: (percent): 71/76.

Aircraft: model: U-2; Average age (years): 18.3; 2002 MC rate/goal 
(percent): 76/85; Aircraft: model: C-17; Average: age (years): 4.1; 
2002 MC rate/goal: (percent): 83/88.

Aircraft: model: KC-10; Average age (years): 16.9; 2002 MC rate/goal 
(percent): 83/85; Aircraft: model: AH-64D; Average: age (years): 3.3; 
2002 MC rate/goal: (percent): 83/75.

Aircraft: model: F-14B; Average age (years): 16.0; 2002 MC rate/goal 
(percent): 73/65; Aircraft: model: E-8; Average: age (years): 3.0; 2002 
MC rate/goal: (percent): 84/75.

Aircraft: model: F/A-18A-Navy; Average age (years): 16.0; 2002 MC rate/
goal (percent): 62/75; Aircraft: model: F/A-18E; Average: age (years): 
1.8; 2002 MC rate/goal: (percent): 71/75.

Aircraft: model: F/A-18A-Marine; Average age (years): 16.0; 2002 MC 
rate/goal (percent): 80/75.

Source: Military services' data.

[End of table]

Logistics officials also believe that MC rates are affected by usage 
patterns and whether the aircraft is operated under the conditions for 
which it was designed. Officials told us that the large increase in 
deployments in recent years has caused many DOD aircraft to be operated 
at rates higher than expected during their design, thus accelerating 
aging problems. For example, according to the Air Force Journal of 
Logistics study, F-15 fighters sent to Saudi Arabia in 1997 were flown 
at over three times their normal rate.[Footnote 17]

Spare Parts Inventories Critical:

Shortages of spare parts have been recognized by us and others for 
years as a major contributor to lower-than-expected MC rates. As a 
result, we have also cited DOD inventory management as a major 
management challenge and program risk since 1990.[Footnote 18] Service 
officials continued to cite spare parts shortages as a frequent cause 
of difficulties in meeting MC goals. Spare parts shortages are caused 
by a number of problems, including underestimates of demand, and 
contracting and other problems associated with aging aircraft or small 
aircraft fleets.

We have reported on DOD's problems in estimating aircraft spare parts 
requirements for years. For example, in 1999 and again in 2001, we 
reported that shortages of spare parts caused by inaccurate forecasting 
of inventory requirements was degrading MC rates for key Air Force 
aircraft such as the B-1B bomber, C-5 cargo planes, and F-16 
fighters.[Footnote 19] In 2001 we reported that key Navy aircraft were 
also having readiness problems because of spare parts shortages 
resulting from underestimates of demand.[Footnote 20] Officials 
continued to raise this issue as an underlying factor in spare parts 
shortages. In addition, some officials also believed that the higher 
operating tempos associated with increased deployments have caused 
parts to fail quicker than expected, exacerbating weaknesses in 
forecasting inventory requirements.

Air Force officials told us that aging aircraft, in particular, may 
experience parts shortages and delays in repairs because original 
manufacturers may no longer make required parts. To obtain a new part, 
officials must wait for it to be manufactured. However, this may not be 
a high priority for the commercial supplier because of the relatively 
low profit potential. Alternatively, another company could make the 
part if the original manufacturer were willing to give up its 
proprietary rights. However, this can take longer and be more expensive 
than simply waiting for the original manufacturer. Moreover, officials 
also told us that spare parts inventories are sometimes reduced when 
aircraft are nearing the end of their projected life. For example, Air 
Force officials said that in the mid-1990s they began to shut down the 
spare parts supply for the B-52 because of its anticipated retirement. 
This resulted in a depletion of inventories, the canceling of 
contracts, and ultimately a drop in MC rates from 1997 to 2000. As a 
result of the decision to retain the B-52, the supply system is 
recovering and MC rates are moving up.

Similarly, the size of the aircraft fleet can also influence spare 
parts inventories and MC rates. According to officials, manufacturers 
may see little profit in stocking large inventories of spare parts for 
a small fleet of specialized military aircraft. Small fleets of 
aircraft can also suffer from having their MC rates strongly influenced 
by the MC failures of just a few aircraft. Large fleets of aircraft 
also have an advantage in having more opportunities to remove 
serviceable parts from one aircraft and install them in another--termed 
"cannibalizing"--thus helping to insulate their MC rates from the 
impact of parts shortages. However, we recently reported that while 
cannibalization is a widespread practice among the services, it 
increases maintenance personnel workloads and lowers morale and 
retention.[Footnote 21]

Maintenance Approach and Other Operational Factors May Affect MC Rates:

Air Force and Navy officials cited changes to their maintenance 
approaches as a significant cause of slower repair times and lowered MC 
rates. In the mid-1990s the Air Force changed from a three-level 
maintenance approach to a two-level approach.[Footnote 22] This change 
moved much of the intermediate maintenance functions, such as the 
replacement or emergency manufacture of parts, away from the air base 
level to centralized maintenance depots. According to officials at both 
the Air Combat Command and Air Mobility Command, these changes slowed 
the pace of repairs significantly. Repair expertise was taken away from 
the base level, and aircraft were shipped away from home base more 
often for repairs. Moreover, officials believed that many experienced 
maintenance people were lost as they refused to move to other locations 
associated with the reorganizations. In this regard, our 1996 review of 
depot closures noted that DOD's outplacement program helped limit the 
number of involuntary separations and that jobs were often available 
for employees willing to relocate.[Footnote 23]

The Army continues to use a three-level maintenance system, as does the 
Navy. However, Navy officials said they also changed their system in 
the mid-1990s by introducing the integrated maintenance concept. This 
approach, in contrast to the Air Force approach, increased the amount 
of aircraft modernization and other work performed at the base level 
during a time when funding for depot-level work was being reduced. 
However, officials believed this change overloaded the base-level 
maintenance systems and ultimately lowered reported MC rates.

From fiscal year 1988 to fiscal 2001, DOD reduced the number of major 
depots from 38 to 19. During this same period, the maintenance 
workforce was reduced by about 60 percent (from 156,000 to 64,500). 
These reductions were the result of overall force structure reductions 
since the end of the Cold War, as well as DOD's desire to reduce costs 
by relying more on the private sector for the performance of depot 
maintenance. We have raised concerns that DOD's downsizing of its depot 
infrastructure and workforce was done without sound strategic planning 
and that investments in facilities, equipment, and personnel in recent 
years have not been sufficient to ensure the long-term viability of the 
depots.[Footnote 24]

Other operational factors can also affect MC rates. For example, from 
1997 to 2000, the Air Force's B-1 bomber had a major power system 
problem that lowered MC rates by 12 points. To address the problem, the 
Air Combat Command instituted a system of frequent video 
teleconferences between the offices involved in the maintenance 
response to provide more intensive management of the response. This 
approach worked, as the MC rate climbed by 9 points by 2002. Management 
integration between the operations and logistics sides of the 
organization was also viewed as key. Good coordination between these 
two groups is essential because of the complex and multifaceted causes 
of MC problems. Finally, Air Force officials noted that some of the 
problems with Air Force MC rates could be explained by a change in 
reporting procedures. During the mid-1990s, the Air Force returned an 
aircraft to MC status after it was repaired but prior to the actual 
check flight to ensure that it was operating correctly. Now, the 
aircraft must pass the check flight before being classified as MC. 
Officials believe that this change would tend to lower MC rates 
slightly.

Funding Levels Raise Concerns:

Officials from all services cited underfunding of spare parts 
inventories, maintenance depots, and other aspects of the maintenance 
and supply systems as a key problem. For example, Army and Navy 
officials told us that they often use remanufactured parts instead of 
new parts to save money.

DOD reports in its Fiscal Year 2000 Performance Report that it has 
increased funding for spare parts and depot maintenance 
requirements.[Footnote 25] For example, the report indicates that 
funding for depot maintenance increased from $5.58 billion to $7.01 
billion from fiscal year 1997 to fiscal 1999 (most recent year that 
data are available). However, the report also acknowledges an unfunded 
requirement of about $1.18 billion in fiscal year 1999. Notwithstanding 
claims regarding the lack of funding for spare parts, we recently 
reported that when provided additional funds for spare parts, DOD was 
unable to confirm that those additional funds were used for that 
purpose.[Footnote 26]

The pressures for more funding to maintain DOD's aircraft may well go 
up even more in coming years as the aircraft inventory continues to 
age. The Congressional Budget Office estimates that spending for 
operations and maintenance for aircraft increases by 1 to 3 percent for 
every additional year of age.[Footnote 27]

DOD'S Goal-Setting Process Is Largely Undefined and Undocumented:

Despite the importance of MC and FMC goals as measures of readiness and 
logistical funding needs, we found widespread uncertainty over how the 
services' MC and FMC goals were established and who is responsible for 
establishing them, as well as basic questions about the adequacy of 
those goals as measures of aircraft availability. The services could 
not explain and document how the original MC and FMC goals were set for 
any of the aircraft in our review. Furthermore, some officials 
questioned which goals are the best to use in reviewing aircraft 
availability: MC goals, FMC goals, or perhaps a new type of goal. DOD's 
instruction provides little or no guidance on these and other key 
issues. DOD officials told us that the instruction has not been updated 
to reflect the current environment of increased deployments and other 
changes since the end of the Cold War.

Goals Are Important Indicators of Readiness, Operational Effectiveness, 
and Logistical Funding Needs:

MC and FMC goals are used as fundamental measures of readiness 
throughout DOD, used as indicators of operational effectiveness, and 
used to help determine the size of spare parts inventories and other 
logistical resources needed to maintain aircraft availability. As a 
result, the level at which the goals are set can influence not only 
perceptions about operations and readiness, but also millions of 
dollars in spending for logistical operations.

In addition to the requirement to maintain MC and FMC data set forth by 
DOD Instruction 3110.5, the services use MC and FMC measures as a 
component of overall unit readiness determinations under DOD's Global 
Status of Resources and Training System.[Footnote 28] The System 
requires commanders to rate their unit's readiness at levels 1 
(highest) through 5 on the basis of a combination of their professional 
judgment and the readiness ratings in four specific areas: personnel, 
training, equipment on hand, and equipment condition. MC and FMC 
measures are used to determine the ratings for equipment condition. For 
example, the Army measures equipment condition (termed "serviceability" 
by the Army) for aircraft by using the FMC rate. An FMC rate of 75 
percent or more is required for a level-1 readiness rating, the highest 
available. Congress also requires DOD to include Status of Resources 
and Training System information on the condition of equipment as well 
as specific information on equipment that is not mission capable in its 
quarterly readiness reports to Congress. These reports assist Congress 
in its general responsibilities for overseeing DOD readiness and 
operations.

Similarly, according to DOD and service officials, MC and FMC goals are 
used as management tools within DOD units to diagnose problems and 
motivate personnel. For example, officials in the Air Combat Command 
told us that their use of lower interim goals beginning in fiscal year 
2000 was an attempt to raise unit morale that had suffered as a result 
of their inability to meet the actual goals owing to shortages of 
personnel and spare parts. In this regard, DOD's instruction 
specifically calls for the services to use the goals and condition 
status measurements, such as MC and FMC, to review maintenance and 
supply effectiveness and to have programs to identify and correct 
problems with systems and equipment.

Service officials told us that the goals also affect DOD's funding 
levels because the goals are used to help determine the size of spare 
parts inventories and other logistical resources needed. Higher goals 
require more money to maintain parts inventories and other resources 
needed to achieve the goals. For example, officials told us that in the 
early 1990s, a $100 million contract for logistics support for one Air 
Force aircraft contained an MC goal of 90 percent. During this period, 
the contractor kept supply bins full of parts and MC goals were met. 
However, in the mid-1990s a new contractor was brought in, and the MC 
goal was dropped to 85 percent. According to Air Force officials, their 
decision to lower the MC goal by 5 percentage points allowed the 
contractor to lower spare parts inventories and reduced the price of 
the maintenance contract by $10 million. However, MC rates also dropped 
and eventually fell below the new goal. The services have developed 
mathematical models to determine the size and cost of the spare parts 
inventories needed to support various levels of MC and FMC goals and 
other measures of aircraft availability. For example, the Navy uses a 
model called "Readiness Based Sparing" that takes a given FMC goal and 
determines the level of funding and spare parts inventories needed to 
reach that goal. Such models are useful in the case of spare parts 
inventories. However, we were not able to identify any models in 
widespread operational use that integrated the other influences on MC 
rates, such as maintenance personnel assigned, into an overall model 
able to predict the impact of changes in those resources on MC and FMC 
rates. Army and Air Force officials told us that they had recently 
developed such integrated models, and they are currently in limited use 
to test their validity. Navy officials told us that they did not yet 
have an integrated model.

The potential amount of funds affected by the level at which MC and FMC 
goals are set is large. Military service estimates of the spending of 
operations and maintenance funds for aircraft spares and repair parts 
were over $7 billion in fiscal year 2001.[Footnote 29] This figure does 
not include spending from other sources such as procurement and working 
capital funds.

Methods Used to Set Goals Unknown:

Precisely how MC and FMC goals are established is unknown. DOD 
officials said that a combined DOD and military service team 
establishes operational requirements and MC goals during the 
acquisition process. After approval, these requirements are recorded in 
the Operational Requirements Document or other documents associated 
with the process. According to officials, part of this process involves 
an engineering analysis of the expected operational availability of the 
aircraft and the underlying level of maintenance support elements 
needed. "Operational availability" is an engineering term referring to 
the probability that equipment is not down owing to failure.[Footnote 
30] In comparison, MC and FMC goals represent the expected percentage 
of time that an aircraft will be able to perform at least one or all of 
its missions, respectively.

Service officials reviewed the acquisition documents for many of the 
aircraft in our review, but were unable to explain and document how the 
actual MC and FMC goals were chosen. According to officials, many of 
these aircraft were acquired 20 to 30 years ago, under processes that 
have changed over the years, and with no clear documentation of the 
basis for the specific goal chosen. Moreover, there was often confusion 
over which organizations were responsible for setting the goals.

For example, Navy officials pointed to a 1996 Center for Naval Analyses 
study that attempted to determine how the MC and FMC goals for Navy 
aircraft were originally computed.[Footnote 31] According to the study, 
however, "no one knows the origin of the numbers or the method used to 
compute them. Now, the numbers are routed to knowledgeable people for 
revision, which are made without documenting the rationale for the 
changes." In a July 17, 2002, letter to us, the Navy further explained 
that it believed that the MC goals were established in the early 1980s 
"to be in line with the reported status quo for the day" with "no 
analytical rigor applied at the time of their birth." We requested a 
written explanation of how the goals were set because, despite repeated 
referrals to various offices over several months, no Navy official 
could explain how the goals were established or identify the 
responsible office. According to Navy officials, there was uncertainty 
between the program and policy offices as to who is responsible for 
establishing the goals and who should answer our questions.

Similarly, Army officials could not explain how their goals were set, 
and two separate Army organizations believed the other was responsible 
for setting the goals. The Army's written response to our request for 
an explanation of how the goals were set (dated July 31, 2002) was 
prepared by officials from the Army's Training and Doctrine Command and 
forwarded to us by a letter from the Office of the Deputy Chief of 
Staff for Logistics. The Deputy Chief of Staff's letter states that MC 
goals for Army aircraft are extracted from the System Readiness 
Objective contained in the Operational Requirements Document 
established during an aircraft's acquisition, and that the Training and 
Doctrine Command is responsible for establishing the System Readiness 
Objectives.[Footnote 32] However, the Training and Doctrine Command's 
letter states that it does not set System Readiness Objectives and that 
the Deputy Chief of Staff for Logistics is responsible for establishing 
readiness goals. Nonetheless, the Training and Doctrine Command 
researched the operational requirements documents for the Army aircraft 
in our review in an attempt to answer our question about how the MC and 
FMC goals were set. The Command's letter identified the operational 
availability requirements for most of the aircraft but did not explain 
how these requirements were set or make any reference to the MC or FMC 
goals. Officials from the Office of the Deputy Chief of Staff for 
Logistics told us that the Army is considering changing the FMC goals 
for all its aircraft to 75 percent to match the requirement for the 
highest-level readiness rating for equipment serviceability under the 
Global Status of Resources and Training System's criterion. They did 
not know how the 75-percent-readiness-rating criterion was chosen.

Air Force officials also could not explain how the initial MC and FMC 
goals for their aircraft were established. Officials from the Air 
Combat Command--responsible for Air Force fighters, bombers, and 
electronic command/control aircraft in our review--told us that they 
could find no historical record of the process used to establish most 
of the goals. Similarly, officials from the Air Mobility Command--
responsible for the cargo and tanker aircraft--stated that the Command 
was formed in 1992 out of elements from the Military Airlift and 
Strategic Air Commands and did not know how the previous Commands had 
established the goals. According to these officials, each of the major 
Commands that operate aircraft and other major weapon systems in the 
Air Force is responsible for establishing its own MC goals, and no one 
has published a standardized methodology to use. Moreover, some of the 
documentation related to the goals was lost when the Military Airlift 
and Strategic Air Commands were deactivated. Similar to the Navy, 
however, officials from both Commands believed that the goals were set 
on the basis of the historical performance of similar aircraft and/or 
subjective Command judgments.

While Air Force officials could not explain how the initial goals were 
established, they told us that their annual reviews of the goals are 
based on a mix of historical trend analysis and requirements reviews. 
The Air Force is the only service that conducts formal reviews of its 
goals each year. According to officials from the Air Mobility and Air 
Combat Commands, until 1997-98, reviews of the goals in both Commands 
were based on an analysis of actual historical MC and FMC rates. For 
example, analysts at the Air Mobility Command compared the goals with 
the actual rates for the previous 2 years. Depending upon actual 
performance, the goal could then be changed, sometimes on the basis of 
subjective judgments. According to Air Combat Command officials, the MC 
goal for the B-2 bomber was set in fiscal year 2000 using an analysis 
of historical rates and command judgment. The first B-2 was delivered 
in 1993.

In 1997-98, the two Air Force Commands began to develop so-called 
"requirements-based analyses" to review the standards. According to 
officials at the Air Combat Command, for example, it was recognized 
that the historical approach to reviewing the standards can perpetuate 
relatively low standards because it simply accepts the low funding 
levels and other problems that may lower MC rates without focusing on 
actual mission needs. The new approach attempts to factor in wartime 
operational requirements, peacetime flying hour requirements for pilot 
training, and other such requirements. A mix of both approaches is 
currently used by the commands to review the goals.

The services also differed in their treatment of other important 
aspects of managing the goals, such as whether to vary the goals on the 
basis of an aircraft's deployment posture. The Navy was the only 
service to tier its goals on the basis of its traditional practice of 
cyclical deployment schedules on board its ships and aircraft carriers. 
Operational aircraft in the Navy follow a cyclical pattern of deploying 
to sea on aircraft carriers and other vessels for a set period of time, 
such as 6 months. Once the deployed units are replaced, they experience 
a stand-down period during which they recover from the rigors of 
deployment until it is time to begin preparing for the next movement. 
The Navy varies the intensity of its maintenance and its MC and FMC 
goals according to this pattern. Navy aircraft more than 90 days away 
from a deployment have goals that are 5 percentage points lower than 
aircraft within 90 days of a deployment, and aircraft actually deployed 
have goals that are 5 percentage points higher than those within 90 
days of deploying.[Footnote 33] In comparison, aircraft in the Marine 
Corps[Footnote 34] and other services have a level approach to 
maintenance where the goals do not vary, and maintenance is kept at a 
relatively constant level. Navy officials believed that the cyclical 
approach to maintenance could lower overall MC rates over time compared 
with the level approach. This is because of the reduced maintenance 
attention when the aircraft are not deployed.

Adequacy of MC and FMC Goals Questioned:

Some officials questioned whether the MC and FMC goals are adequate 
measures of an aircraft's availability. For example, officials from the 
Air Force's Air Mobility Command stated that they focused on the MC 
goal and not the FMC goal because their primary readiness objective is 
the specific mission currently assigned, not every possible mission the 
aircraft was designed for. Moreover, the Air Combat Command did not 
even establish FMC goals. This Command was the only one we reviewed 
that did not set FMC goals for its aircraft. Air Combat Command 
officials told us that they could find no documentation to explain why 
the Command did not establish FMC goals.

In contrast, Army officials stated that their units focus primarily on 
the FMC goal because it is directly connected to readiness ratings 
under the Status of Resources and Training System. Furthermore, Navy 
officials stated that the military is moving away from the MC and FMC 
goals in newer aircraft, such as the Joint Strike Fighter. This is 
because the MC and FMC goals provide only a limited historical 
perspective and do not address issues that are important to war-
fighting commanders such as how often an aircraft can fly missions over 
the course of a day and the probability that the aircraft will complete 
its mission. The Joint Strike Fighter, for example, is using a concept 
called "mission reliability" instead of MC and FMC goals. Mission 
reliability is the probability that the Joint Strike Fighter will 
complete its required operational mission without a failure. According 
to Navy officials, the predictive value and information on flight 
frequency and reliability provided by this new measure is very valuable 
to war-fighting commanders and is better for mission-planning purposes 
than the MC and FMC measures. Officials said that the mission-
reliability concept could be used throughout DOD's inventory of 
aircraft.

DOD Instruction Provides Little or No Guidance on Key Issues:

DOD Instruction 3110.5 provides only vague or no guidance on many of 
the key issues raised in this report. For example, the instruction 
requires each military service to establish availability goals for its 
mission-essential systems and equipment, and a corresponding set of 
condition status measures relative to those goals. The instruction 
specifically identifies MC, FMC, and other specific capabilities as 
measures that the services must maintain. However, it does not identify 
the specific goals that must be established--MC, FMC, or any other--or 
the primary readiness objective to be served. In this regard, the 
instruction states that the services should assume planned peacetime 
usage in setting the goals. According to Air Force officials, peacetime 
usage can be more taxing than wartime usage because of the extra 
training and other requirements. Air Combat Command officials told us 
that they believed that the instruction regarding what goals--including 
the FMC goal--were required to be established was unclear.

The instruction also provides little guidance on the methodology to be 
used in setting the goals. It states that the services should provide 
estimates of the maximum performance that is achievable, given the 
design characteristics of the aircraft, and that full funding and 
optimal operation of the logistics support system should be assumed. 
Service officials said they believe that actual levels of funding, 
personnel, spare parts inventories, and other key resources should be 
factored into the process of setting the goals, since full funding has 
not been provided for years. The instruction is silent on the issue of 
whether it is appropriate to use historical trends of similar aircraft 
in determining the goals, as opposed to a more analytical approach 
using actual requirements, for example. The instruction is also silent 
on whether the aircraft availability goals should vary on the basis of 
the aircraft's deployment posture. Moreover, it includes no requirement 
for the services to identify the readiness and cost implications of 
setting the goals at different levels, to help clarify the pros and 
cons of available choices and the guiding principles used to decide on 
those choices.

Similarly, the instruction provides little organizational structure for 
the goal-setting process in DOD. For example, it does not require the 
services to identify one office as the coordinating organization for 
goal-setting and other related activities. Furthermore, it does not 
require the services to document the basis for the goals chosen or 
outline any of the basic historical documentation that should be 
maintained for goal-setting and other key activities during the 
process.

According to DOD officials from the office responsible for the 
instruction, DOD Instruction 3110.5 dates back to the 1970s when 
readiness concerns had reached a high point. The focus was on getting 
the services to set benchmark readiness goals, and the instruction gave 
them latitude to choose those goals, the methods for setting them, and 
the processes for managing them. The instruction was revised in 1990. 
However, officials told us that it has not been updated to reflect the 
current environment of frequent deployments and other changes since the 
end of the Cold War, and some now consider it a relic.

We performed our work from February through November 2002 in accordance 
with generally accepted government auditing standards. The final 
publication of this report was delayed by the impact on DOD's report 
review and classification process of the terrorist attacks on September 
11, 2001 and DOD's preparations for potential conflict in Iraq.

Conclusions:

While many of DOD's key aircraft are not meeting MC and FMC goals, it 
is difficult to determine how significant this problem is because of 
the uncertainty and lack of documentation of the basis for the existing 
goals. Moreover, without knowing the basis for the existing goals, it 
is also difficult to know whether that basis is appropriate for the 
demands of the new defense strategy.

DOD's Instruction 3110.5 fails to clearly define the specific 
availability goals that all services must establish. Without the 
perspective provided by clear, consistent, and up-to-date goals, the 
perceptions of actual performance are subject to continuing uncertainty 
and disagreement, and confidence in the funding requests based on those 
perceptions is undermined. Moreover, the lack of a standard methodology 
for the services to use in setting the goals removes a safeguard for 
objectivity from the process, risking the possibility that the methods 
used do not realistically reflect actual requirements. This risk is 
increased when there is uncertainty or disagreement over basic 
questions such as whether it is appropriate to base the goals on a 
historical analysis or an analysis of actual requirements, and whether 
full funding of logistical support systems should be assumed in an era 
of reduced funding. Furthermore, the absence of information on the 
readiness and cost implications of setting the goals at different 
levels results in a lack of understanding of the pros and cons of 
available choices and the guiding principles used to make those 
decisions. Ultimately, inappropriately set goals can unnecessarily 
raise or lower the cost of spare parts inventories and other logistical 
resources by millions of dollars.

Also, DOD's instruction requires the services neither to designate one 
office to coordinate the establishment and maintenance of aircraft 
availability goals, nor to document the basis for the goals chosen or 
other key issues in the process. Clear responsibilities and 
requirements in these areas are fundamental to the effective management 
of any performance system. Without the transparency provided by 
adequate documentation of the process, neither DOD nor the Congress can 
be reasonably assured that the services have selected the optimal goals 
on the basis of preferred principles.

Recommendations for Executive Action:

To ensure that aircraft availability goals and their performance 
measures are appropriate to the new defense strategy and based on a 
clear and defined process, we recommend that (1) DOD and the services 
determine whether different types of aircraft availability goals are 
needed, (2) as appropriate, DOD and the services validate the basis for 
the existing MC and FMC goals, and (3) the Secretary of Defense revise 
DOD Instruction 3110.5 to:

* clearly define the specific aircraft availability goals required to 
be established by the military services and their accompanying 
performance measures;

* establish a standard methodology identifying objective principles of 
analysis to be used by all services in setting the goals, including an 
identification of the readiness and cost implications of setting the 
goals at different levels; and:

* require each service to identify one office to act as a focal point 
for coordinating the development of the goals and for maintaining a 
documentary record of the basis for the goals chosen and other key 
decisions in the goal-setting process.

Agency Comments and Our Evaluation:

In written comments on a draft of this report, DOD concurred or 
partially concurred with all our recommendations. The department agreed 
to determine whether different types of aircraft availability goals are 
needed, including the option of tailoring such goals to unique military 
service and mission requirements. DOD also agreed to validate the basis 
for the existing goals, including the DOD Instruction 3110.5 
requirement that full funding of support systems be assumed in 
establishing availability goals. In addition, DOD indicated that it 
would explore alternative methodologies for setting goals, such as one 
based on unit deployment cycles currently in use by the Navy.

DOD partially concurred with our recommendation for a series of 
revisions to DOD Instruction 3110.5. It agreed with our recommendation 
that the instruction be revised to require each service to designate a 
focal point for the development and historical documentation of the 
goal-setting process. However, DOD did not agree with the part of our 
recommendation calling for it to include the performance measures 
associated with the aircraft availability goals in the instruction. DOD 
believed that that requirement implied that those performance measures 
should be the sole or primary measure of the overall state of materiel 
readiness. That was not our intent. Our recommendation is meant to 
ensure that the goals and accompanying performance/status measures 
selected are clearly defined in the instruction. As pointed out in the 
report, this is not currently the case. We agree that determinations of 
overall materiel readiness require the consideration of a variety of 
factors, such as maintenance manning and supply fill rates, as well as 
metrics such as an aircraft's availability. However, we believe that 
the instruction should continue its current requirement to include 
performance/condition status measures relative to those goals. Clearly 
identifying the goals that are sought and their performance measures in 
the instruction will help avoid further uncertainty and disagreement 
over the level of basic aircraft performance, and does not preclude the 
consideration of other metrics in broader assessments of overall 
readiness. For these reasons, we believe no change to our 
recommendation is needed.

DOD also disagreed with the part of our recommendation calling for the 
Secretary of Defense to revise the instruction to establish a standard 
methodology identifying objective principles of analysis to be used in 
setting the goals. It believed that the services should establish the 
detailed analytical methodology because the types of goals and their 
basis may vary by service, and the services have a better understanding 
of the differences and complexities of their individual environments. 
We agree with the need for some leeway at the service level to handle 
individual differences between them. However, we continue to believe 
that all services should adhere to a standardized set of overarching 
principles of analysis in order to safeguard objectivity and 
transparency in the goal setting process. Such principles could be 
identified in coordination with the services during the department's 
planned evaluation of the basis for the current goals and alternative 
methodologies. The services could then develop detailed methodologies 
consistent with these principles but tailored to their individual 
environments. Consequently, no change to our recommendation is 
required.

The department's comments are reprinted in appendix III. DOD also 
provided technical comments, which we incorporated as appropriate.

As arranged with your office, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
after the date of this letter. At that time, we will send copies to the 
appropriate congressional committees; the Secretaries of Defense, the 
Army, the Navy, and the Air Force; the Commandant of the Marine Corps; 
and the Director, Office of Management and Budget. We will also make 
copies available to others upon request. In addition, the report will 
be available at no charge on the GAO Web site at http://www.gao.gov.

Please contact me at (757) 552-8100 if you or your staff have any 
questions concerning this report. The major contributors to this report 
are listed in appendix IV.

Sincerely yours,

Neal P. Curtin 
Director 
Defense Capabilities and Management Team:

Signed by Neal P. Curtin: 

[End of section]

Appendix I: Mission Capable Goals and Rates, Fiscal Years 1991-2002:

[See PDF for image]

Source: Military service data.

Legend: MC = mission capable, FMC = fully mission capable, FY= fiscal 
year, EC/C = electronic command and control.

Notes: We used the "overall" MC and FMC goal for Navy and Marine Corps 
aircraft, which is a combined goal for the various categories of 
deployment status used by the Navy and Marines in rating aircraft 
availability.

Fiscal year 2002 rates are as of February for the Army, Navy, and 
Marine Corps, and March 31 for the Air Force.

Aircraft ages are as of September 30, 2001 for the Navy/Marines; 
December 31, 2001, for the Air Force; and April 2002 for the Army.

Aircraft costs/flying hour are as of January 2001 for the Army, and 
September 30, 2001, for the Air Force, Navy, and Marines.

[A] No data or only partial cost/flying hour data available.

[End of table]

[End of section]

Appendix II: Scope and Methodology:

To identify Department of Defense (DOD) and service policies and 
practices regarding mission capable (MC) goals and rates, we obtained 
briefings, reviewed DOD and service regulations and prior reports by us 
and others; and interviewed officials at the Office of the Secretary of 
Defense: the Office of the Joint Chiefs of Staff; headquarters offices 
of the Army, Navy/Marine Corps, and Air Force; and aviation commands 
and other locations as appropriate.

To determine whether key DOD aircraft were meeting established MC and 
FMC goals, we requested that each service identify its key active-duty 
operational aircraft. We excluded reserve units from the scope of our 
review, as well as active-duty training units and executive aircraft 
used to transport officials on official business. The resultant list 
included a total of 46 different models of aircraft from the four 
military services, which we categorized into five basic types: bombers, 
cargo/tanker aircraft, electronic command/control aircraft, fighter/
attack aircraft, and helicopters. Three aircraft models (F/A-18A, F/A-
18C, and EA-6B) were used by both the Navy and Marine Corps. For our 
review, we counted the Navy and Marine Corps versions of these aircraft 
as separate models, resulting in a total of 49 aircraft models for 
review. We requested MC and full mission capable (FMC) goal and rate 
data, aircraft age and cost, and other data for these aircraft back to 
1991 to provide a historical perspective on goal and rate history. The 
Army and Air Force provided comprehensive data from fiscal year 1991 to 
mid-fiscal year 2002. However, the Navy and Marine Corps could provide 
data separated by service only from fiscal year 1998 forward. These 
services changed their reporting system in 1998 and were unable to 
provide comparable data for prior years. As a result, we focused our 
report on the 5-year period beginning in fiscal year 1998. However, we 
included the full array of Army and Air Force data in appendix I. We 
used these data to conduct analyses of whether the aircraft were 
meeting their goals. We also provided each service with these databases 
for review, and they confirmed the results for accuracy.

To identify the causes of difficulties in meeting MC and FMC goals, we 
reviewed prior reports by us and others and conducted a variety of 
comparative analyses of our data by service, aircraft type, model, age, 
cost, and fiscal year. We then held discussions with each service to 
gain their perspectives on the causes of observed difficulties in 
meeting the goals.

To determine whether DOD has a clear and defined process for setting MC 
and FMC goals, we reviewed DOD Instruction 3110.5 and other regulations 
and conducted discussions with officials from the Office of the 
Secretary of Defense and service headquarters in Washington, D.C., and 
with officials from the headquarters of the Air Force's Air Mobility 
and Air Combat Commands; the Naval Air Systems Command; and Army 
Training and Doctrine Command officials at Fort Rucker, Alabama. 
Because of the difficulty in obtaining clear information on this issue, 
we also wrote formal letters of inquiry to the Secretaries of the Army 
and Navy requesting clarification of how the goals were established. 
Their responses to those letters of inquiry were used in preparing our 
report.

We performed our work from February through November 2002 in accordance 
with generally accepted government auditing standards. The final 
publication of this report was delayed by the impact on DOD's report 
review and classification process of the terrorist attacks on September 
11, 2001, and DOD's preparations for potential conflict in Iraq.

[End of section]

Appendix III Comments from the Department of Defense:

DEPUTY UNDER SECRETARY OF DEFENSE FOR LOGISTICS AND MATERIEL READINESS 
3500 DEFENSE PENTAGON WASHINGTON, DC 20301-3500:

FEB 26 2003:

Mr. Neal P. Cumin:

Director, Defense Capabilities and Management U.S. General Accounting 
Office:

Washington, DC 20548:

Dear Mr. Cumin:

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-03-3000, "MILITARY READINESS: DoD Needs a Clear and Defined 
Process for Setting Aircraft Availability Goals in the New Security 
Environment," dated November 27, 2002 (GAO Code 350147).":

The Department concurs with recommendations 1 and 2, while partially 
concurring with recommendation 3. An explanation of the DoD position is 
enclosed. Additionally, since portions of the draft report supporting 
the recommendations could be misleading, technical comments are 
provided to improve the accuracy and clarity of the draft report. The 
Department appreciates the opportunity to comment on the draft report.

Sincerely,

Allen W. Beckett Principal Assistant:

Signed by Allen W. Beckett:

Enclosure: As stated:

GAO CODE 350147/GAO-03-300C:

"MILITARY READINESS: DOD NEEDS A CLEAR AND DEFINED PROCESS FOR SETTING 
AIRCRAFT AVAILABILITY GOALS IN THE NEW SECURITY ENVIRONMENT":

DEPARTMENT OF DEFENSE MoD) COMMENTS TO THE RECOMMENDATIONS:

RECOMMENDATION 1: The GAO recommended that the DoD and the Services 
determine whether different types of aircraft availability goals are 
needed.

DoD RESPONSE: Concur. The Deputy Under Secretary of Defense for 
Logistics and Materiel Readiness (DUSD (L&MR), in coordination with the 
Services, will determine the need for aircraft availability goals for 
different types of aircraft, consistent with the current defense 
strategy. Consideration will be given to goal categories (e.g., MC, 
FMC, PMC) tailored for unique Service and mission requirements. For 
example, the draft report states that the Army prefers FMC goals and 
its linkage to their readiness reporting system) while the Air Force's 
Air Mobility Command prefers MC goals due to the primary mission of its 
aircraft. Further, DUSD (L&MR) will consider selected alternatives to 
aircraft availability goals, as may be requested by the Services, such 
as the potential use of a mission reliability goal for the Joint Strike 
Fighter. Finally, DoD will examine the desirability of establishing new 
aircraft availability goals for legacy systems. Appropriate DoD policy 
documents will be revised to incorporate any changes resulting from 
this effort.

RECOMMENDATION 2: The GAO recommended that DoD and the Services 
validate the basis for existing MC and FMC goals.

DoD RESPONSE: Concur. DUSD (L&MR), in coordination with the Services, 
will validate the basis for the aircraft availability goals and, if 
required, will develop, coordinate, and disseminate revised DOD policy 
guidance. The existing basis contained in DODI 3110.5, Materiel 
Condition Reporting for Mission-Essential Systems and Equipment, 
(maximum availability achievable with optimal resourcing and peacetime 
usage), will be evaluated in light of its relevance to the current 
defense strategy. Alternatives that DUSD (L&MR) will explore include a 
mission requirements-based methodology; a blend of the maximum 
availability and mission requirements-based methods; and the use of 
flexible goals (such as the Navy's which are based on the unit's 
deployment cycle).

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense 
revise DoD Instruction 3110.5 to:

* (a) clearly define the specific aircraft availability goals required 
to be established by the Military Services and their accompanying 
performance measures;

* (b) establish a standard methodology identifying objective principles 
of analysis to be used by all Services in setting the goals, including 
an identification of the readiness and cost implications of setting the 
goals at different levels, and;

* (c) require each service to identify one office to act as a focal 
point for coordinating development of the goals and for maintaining a 
documentary record of the basis for the goals chosen and other key 
decisions in the goal setting process.

DoD RESPONSE: Partially concur. DUSD (L&MR) and the Services will 
consider a number of issues relevant to aircraft availability goals in 
response to Recommendation 3. The issues that will be addressed include 
the following:

* (a) While aircraft availability is an important metric, the Office of 
the Secretary of Defense (OSD) and the Services routinely use it in 
conjunction with other key metrics (e.g., Customer Wait Time, 
cannibalization, maintenance manning, supply fill rates, MICAP 
incidents, and aircraft-in-depot status) to assess the overall state of 
materiel readiness. In addition, the importance of aircraft 
availability goals is being considered as part of an on-going study 
that will identify a balanced set of key materiel readiness metrics for 
use by the DUSD (L&MR).

* (b) While the GAO draft report only addressed active duty aircraft, 
any DoD policy guidance must consider aircraft from the Active and the 
Reserve Components as well as other mission-essential weapon systems 
and equipment including ground combat vehicles and ships.

* (c) The degree that aircraft availability goals are used as the basis 
for resourcing (via the Planning, Programming and Budgeting System) as 
opposed to more common methods such as annual flying hour programs and 
aircraft sustainability modeling.

In addition, any revised DoD guidance may be promulgated in a document 
other than DODI 3110.5.

With respect to the actions in RECOMMENDATION 3 pertaining to revision 
of DoD Instruction 3110.5:

DoD response to 3 (a): Per the DoD responses to recommendations 1 and 
2, DUSD (L&MR) and the Services will determine the need for different 
types) of aircraft availability and/or mission reliability goals and 
the basis for such goals. However, DUSD (L&MR) does not concur with the 
inclusion of other performance measures in DoDI 3110.5. The degree that 
designated aircraft availability/mission reliability goals are (or are 
not) met should be measured by OSD and the Services in concert with 
other key metrics and form the basis for a more complete assessment of 
materiel readiness. Focusing solely on a performance measure for 
aircraft availability would distort that assessment.

DoD response to 3 (b): DUSD (L&MR), in coordination with the Services, 
will review appropriate policy document(s) to ensure sufficient overall 
readiness goals are available for the Services to set their respective 
aircraft availability/mission reliability goals. OSD will review 
overall Service readiness plans and programs as part of the annual 
budget preparation. Because the types and bases for goals may vary by 
(and possibly within) each Service, detailed analytical methodology 
should be retained by the Services. The Services are responsible for 
the logistical support and operational employment of the Department's 
weapon systems, and they best understand the differences in complexity 
of those systems and how they are employed in support of operational 
requirements. Spares funding, manpower/skill level issues, depot 
capacity, and wartime tasking are just a few of the Service level 
factors that impact goals and readiness and are clearly understood at 
the Service level. In addition, the factors influencing establishing 
goals at different levels (such as age, complexity, mission 
requirement, and unit operational priority) are numerous and dynamic 
and thus better addressed in Service-controlled guidance.

DoD response to 3 (c): DUSD (L&MR) will revise appropriate policy 
document(s) to include the establishment of the requirement for the 
Services to designate focal points for the development, periodic 
review, and historical documentation of aircraft availability and/or 
mission requirement goals.

[End of section]

Appendix IV: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

William C. Meredith (retired) John W. Nelson (404) 679-1949:

Staff Acknowledgments:

In addition to those named above, Bernice Benta, Katherine Chenault, 
and R.K. Wild made key contributions to this report.

FOOTNOTES

[1] See Department of Defense Instruction 3110.5, Materiel Condition 
Reporting for Mission-Essential Systems and Equipment, Sept. 14, 1990.

[2] See U.S. General Accounting Office, Military Readiness: Air 
Transport Capability Falls Short of Requirements, GAO/NSIAD-00-135 
(Washington, D.C.: June 22, 2000).

[3] We focused our report on fiscal years 1998-2002 because the Navy 
and Marine Corps changed their reporting system in 1998 and were unable 
to provide data separated by service for previous years. (The Marine 
Corps is a separate service under the Department of the Navy and 
follows Navy regulations governing MC and FMC goals and performance 
measures.). Appendix I provides MC and FMC data for all services, 
including Army and Air Force data back to fiscal year 1991. 

[4] See U.S. General Accounting Office, Air Force Depot Maintenance: 
Management Improvements Needed for Backlog of Funded Contract 
Maintenance Work, GAO-02-623 (Washington, D.C.; June 20, 2002).

[5] See DOD Instruction 3110.5.

[6] Three models (F/A-18A, F/A-18C, and EA-6B) were used by both the 
Navy and Marines. For our analyses, the Navy and Marine versions of 
each were considered to be separate models.

[7] To determine which aircraft should be included in the scope of our 
review, we used listings of key active duty aircraft provided by each 
service. We excluded aircraft operated by reserve units from the scope 
of our review, as well as active duty aircraft used for training and 
for transporting service officials on official business.

[8] FMC goals appear to be more difficult to meet because aircraft must 
be capable of performing more missions to meet them than MC goals. 
However, since the FMC goals were always lower, this resulted in higher 
percentages of aircraft models meeting the FMC goals in fiscal years 
1998-2001. For example, current MC goals range from 3 to 30 percentage 
points higher than FMC goals, with an average difference of 13 
percentage points.

[9] The services provided overall yearly MC and FMC rates for each 
aircraft model we reviewed. We computed the percentage of aircraft 
models meeting their MC and FMC goals by taking the ratio of the total 
number of aircraft models meeting the goal in that year to the total 
number of aircraft models that could have met the goals in that year.

[10] The Air Force refers to the MC and FMC goals as "standards." For 
simplicity and consistency with the other services, we use the term 
"goals" throughout this report.

[11] Steven A. Oliver, et al, "Forecasting Readiness: Regression 
Analysis Techniques," Air Force Journal of Logistics (fall 2001): 1, 3, 
31-43.

[12] Army Audit Agency, Aviation Maintenance: 25th Infantry Division 
(Light) and U.S. Army Hawaii, AA 98-185 (May 4, 1998).

[13] See U.S. General Accounting Office, Major Management Challenges 
and Program Risks: Departments of Defense, State, and Veterans Affairs, 
GAO-01-492T (Washington, D.C.: Mar. 7, 2001).

[14] See U.S. General Accounting Office, Military Personnel: 
Perspectives of Surveyed Service Members in Retention Critical 
Specialties, GAO/NSIAD-99-197BR (Washington, D.C.: August. 16, 1999).

[15] Congressional Budget Office, CBO Paper: The Effects of Aging on 
the Costs of Operating and Maintaining Military Equipment (Washington, 
D.C.: August 2001).

[16] We performed a statistical test of the relationship between 
average age in years and the MC level and found no relationship between 
those two factors.

[17] Steven A. Oliver, et al (fall 2001).

[18] See GAO-01-492T.

[19] See U.S. General Accounting Office, Defense Inventory: Continuing 
Challenges in Managing Inventories and Avoiding Adverse Operational 
Effects, GAO/T-NSIAD-99-83 (Washington, D.C.: Feb. 25, 1999), and U.S. 
General Accounting Office, Air Force Inventory: Parts Shortages Are 
Impacting Operations and Maintenance Effectiveness, GAO-01-587 
(Washington, D.C.: June 27, 2001). 

[20] See U.S. General Accounting Office, Navy Inventory: Parts 
Shortages Are Impacting Operations and Maintenance Effectiveness, 
GAO-01-771 (Washington, D.C.: July 31, 2001).

[21] See U.S. General Accounting Office, Military Aircraft: Services 
Need Strategies to Reduce Cannibalizations, GAO-02-86 (Washington, 
D.C.: Nov. 21, 2001).

[22] Under the three-level approach, maintenance is divided into 
organizational, intermediate, and depot categories. Organizational 
maintenance is performed at the air base level and includes functions 
such as inspections, minor repairs, and servicing. Intermediate 
maintenance generally takes place at shops on the air bases and 
consists of activities such as calibration, repair, or the emergency 
manufacture of parts, and technical assistance. The more sophisticated 
depot maintenance requires more extensive facilities and is conducted 
at government or contractor industrial facilities.

[23] See U.S. General Accounting Office, Closing Maintenance Depots: 
Savings, Workload, and Redistribution Issues, GAO/NSIAD-96-29 
(Washington, D.C.: Mar. 4, 1996).

[24] See U.S. General Accounting Office, Defense Logistics: Actions 
Needed to Overcome Capability Gaps in the Public Depot System, 
GAO-02-105 (Washington, D.C.: Oct. 12, 2001). 

[25] See U.S. Department of Defense, Government Performance and Results 
Act: Department of Defense FY 2000 Performance Report (Washington, 
D.C.: Mar. 2001).

[26] See U.S. General Accounting Office, Defense Inventory: Information 
on the Use of Spare Parts Funding Is Lacking, GAO-01-472 (Washington, 
D.C.: June 11, 2001).

[27] See Congressional Budget Office (August 2001).

[28] The Global Status of Resources and Training System is the 
automated reporting system within DOD used as the central registry of 
readiness information for all U.S. operational units. 

[29] See U.S. General Accounting Office, Defense Inventory: Better 
Reporting on Spare Parts Spending Will Enhance Congressional Oversight, 
GAO-03-18 (Washington, D.C.: Oct. 24, 2002).

[30] Operational availability is calculated by dividing the mean time 
between maintenance events by the sum of the mean time between 
maintenance events and mean downtime (time needed for corrective and 
preventive maintenance and waiting time).

[31] See Center for Naval Analyses, Naval Aviation Goals Study 
(Alexandria, Va.: June 1996).

[32] The System Readiness Objective is defined as the measurable 
criterion used to assess the ability of a weapons system to undertake a 
set of missions at planned utilization rates.

[33] As agreed with Navy officials, we used "overall" MC and FMC goals 
in our analyses of Navy and Marine Corps aircraft. The overall goals 
are a combined goal for the various categories of deployment status.

[34] Marine Corps aircraft share the same goals as the Navy aircraft. 
However, according to officials, Marine Corps aircraft do not follow 
the cyclical pattern of deployments and thus maintain the same goal 
throughout the year.

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