Air Force Depot Maintenance:
Analysis of Its Financial Operations
AIMD/NSIAD-00-38: Published: Dec 10, 1999. Publicly Released: Dec 10, 1999.
Additional Materials:
- Full Report:
Contact:
(202) 512-4841
contact@gao.gov
Office of Public Affairs
(202) 512-4800
youngc1@gao.gov
Pursuant to a congressional request, GAO provided information on the financial operations of the Air Force depot maintenance activity group, focusing on the: (1) Air Force depot maintenance activity group's price increase between fiscal year (FY) 1994 and FY 1999 and the primary reasons for it; (2) activity group's financial losses during FY 1994 through FY 1998 and the primary reasons for them; and (3) Air Force's methods for recovering these losses.
GAO noted that: (1) the Air Force depot maintenance activity group's prices increased from an average of $92.60 per direct labor hour (DLH) in FY 1994 to $128.43 per DLH in FY 1999--a 39 percent increase; (2) the price increase occurred primarily because: (a) the direct material cost per direct labor hour increased; (b) workload declined faster than overhead costs; and (c) the average cost of civilian labor increased; (3) even though the prices increased 39 percent, the Air Force reported that the depot maintenance activity group lost about $623 million during fiscal years 1994 through 1998 on total sales of about $21.8 billion; (4) GAO's analysis indicates that these losses occurred primarily because the activity group: (a) did not accomplish as much work as expected; (b) had material costs that were higher than budget estimates; (c) developed prices based on anticipated savings that were not realized; and (d) incurred losses on its contract repair operations during fiscal years 1996, 1997, and 1998; (5) since FY 1995, the Air Force has tried different methods to recover the depot maintenance activity group's losses with varying success; (6) for fiscal years 1995 through 1997, the Air Force increased prices and requested a direct appropriation; (7) however, neither of these methods was successful in recouping losses; (8) beginning in FY 1998, the Air Force used two other methods, which were more successful in recovering losses; (9) the Air Force developed the depot maintenance activity group's fiscal years 1998 and 1999 prices based on the group's cost of operations plus an amount to recover $310 million in prior year losses; (10) the Air Force then separated the approved fiscal years 1998 and 1999 prices into two pieces; (11) the first piece was the amount the activity group charged individual customers for current year work; (12) the second piece was to recover the $310 million in prior year losses; (13) pursuant to a new Department of Defense policy that directs depot maintenance activities to recover losses that occurred during the year of execution, the Air Force reprogrammed funds and used other available customer appropriated funds to recover the depot maintenance activity group's losses; and (14) as a result, the Air Force recovered or plans to recover $313.4 million in losses that occurred in fiscal years 1998 and 1999.
Feb 26, 2021
-
Defense Transportation:
DOD Can Better Leverage Existing Contested Mobility Studies and Improve TrainingGAO-21-125: Published: Feb 26, 2021. Publicly Released: Feb 26, 2021.
Feb 25, 2021
-
Military Service Uniforms:
DOD Could Better Identify and Address Out-of-Pocket Cost InequitiesGAO-21-120: Published: Feb 25, 2021. Publicly Released: Feb 25, 2021.
Feb 24, 2021
-
Defense Budget:
Opportunities Exist to Improve DOD's Management of Defense SpendingGAO-21-415T: Published: Feb 24, 2021. Publicly Released: Feb 24, 2021.
Feb 22, 2021
-
Service Acquisitions:
DOD's Report to Congress Identifies Steps Taken to Improve Management, But Does Not Address Some Key Planning IssuesGAO-21-267R: Published: Feb 22, 2021. Publicly Released: Feb 22, 2021.
Jan 21, 2021
-
Close Air Support:
Actions Needed to Enhance Friendly Force Tracking Capabilities and Fully Evaluate TrainingGAO-21-99: Published: Jan 21, 2021. Publicly Released: Jan 21, 2021.
Jan 19, 2021
-
GPS Modernization:
DOD Continuing to Develop New Jam-Resistant Capability, But Widespread Use Remains Years AwayGAO-21-145: Published: Jan 19, 2021. Publicly Released: Jan 19, 2021.
Jan 14, 2021
-
Columbia Class Submarine:
Delivery Hinges on Timely and Quality Materials from an Atrophied Supplier BaseGAO-21-257: Published: Jan 14, 2021. Publicly Released: Jan 14, 2021. -
Department of Defense:
Actions Needed to Improve Accounting of Intradepartmental TransactionsGAO-21-84: Published: Jan 14, 2021. Publicly Released: Jan 14, 2021.
Jan 12, 2021
-
DOD Critical Technologies:
Plans for Communicating, Assessing, and Overseeing Protection Efforts Should Be CompletedGAO-21-158: Published: Jan 12, 2021. Publicly Released: Jan 12, 2021.
Dec 10, 2020
-
Climate Resilience:
DOD Coordinates with Communities, but Needs to Assess the Performance of Related Grant ProgramsGAO-21-46: Published: Dec 10, 2020. Publicly Released: Dec 10, 2020.
Looking for more? Browse all our products here