Defense Depot Maintenance:

Information on Public and Private Sector Workload Allocations

NSIAD-98-41: Published: Jan 20, 1998. Publicly Released: Jan 20, 1998.

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Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) guidelines and procedures for identifying depot maintenance workloads and quantifying the public- and private-sector share of depot maintenance funding, focusing on: (1) public and private workload distributions as reported by the military departments and defense agencies for fiscal years (FY) 1996 through 2002; and (2) the procedures DOD uses to define and quantify depot workload distribution.

GAO noted that: (1) DOD's May 1997 report of public- and private-sector depot maintenance workload distribution for FY 1996 through 2002 did not provide a complete, consistent, and accurate assessment of DOD's public- and private-sector funding; (2) vague Office of the Secretary of Defense guidance and incomplete and inconsistent reporting of data by the military departments and defense agencies contributed to this condition; (3) the workload distribution analysis showed that in FY 1996 DOD spent $7.1 billion for work assigned to public-sector facilities and about $3.4 billion for work assigned to the private sector; (4) in addition, DOD's analysis shows that DOD provided an additional $706 million for depot maintenance-related work acquired from the private sector through interim contractor support and contractor logistics support arrangements; and (5) DOD's depot maintenance workload distribution and supporting data show that: (a) in some cases modification and conversion work obtained from private-sector contractors was not reported but similar work in public depots was included; (b) reporting of computer software maintenance work was inconsistent and perhaps incomplete; (c) public-sector depot maintenance funding included substantial expenditures for goods and services purchased from private-sector contractors, and resulted in inconsistent reporting of the allocation between the public and private sector; and (d) depot maintenance expenditures for equipment and software owned by various defense agencies were not reported.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: In a letter to the Director, Defense Management Issues, the Acting Deputy Under Secretary of Defense (Logistics) stated that DOD agreed with the recommendation that a standard methodology should be developed for annually collecting depot maintenance funding data for the public and private sectors. Subsequent to DOD's review of the draft report, DOD issued written guidance to the services and defense agencies defining the types of workloads that were to be reported, the defense components that should be reporting, and data collection procedures that were to be followed to facilitate complete, accurate and consistent future reports of public- and private-sector depot maintenance funding. In the final report, GAO acknowledged that DOD issued written instructions that established a methodology and procedures for annually collecting public- and private-sector depot maintenance funding information and that the guidelines should provide more accurate and consistent reporting.

    Recommendation: To improve the accuracy of reporting on the amount of funding for depot maintenance in the public and private sectors, the Secretary of Defense should develop a standardized methodology for annually collecting depot maintenance funding data for the public and private sectors. This should include: (1) a specific definition of the types of activities to be reported; (2) the defense components that should be reporting; and (3) specific data collection processes and procedures the military departments are to follow to insure complete, accurate, and consistent reporting of the amount of funding provided for public- and private-sector depot maintenance workloads.

    Agency Affected: Department of Defense


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