Defense Depot Maintenance:

Use of Public-Private Partnering Arrangements

NSIAD-98-91: Published: May 7, 1998. Publicly Released: May 7, 1998.

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David R. Warren
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Pursuant to a congressional request, GAO reviewed the use of partnering arrangements between the Department of Defense (DOD) and private-sector contractors to use excess capacity at military service repair depots, focusing on the: (1) legal framework under which partnering can occur; and (2) types of current partnering arrangements and the services' and industry's views of such arrangements.

GAO noted that: (1) a number of statutory provisions enacted primarily during the 1990s provide, under certain conditions, the authority and framework for partnering arrangements; (2) various provisions of title 10 of the United States Code allow the services to sell articles and services outside DOD for limited purposes and under certain conditions; (3) the Army has this authority for many of its industrial facilities under section 4543 of title 10; (4) the Army controls the sales authority under this provision; (5) the authority for the remaining DOD industrial facilities, including those of the Air Force, is contained in 10 U.S.C. 2553; (6) it requires the Secretary of Defense to designate which facilities will have the authority to sell articles and services outside of DOD; (7) under both provisions, the goods or services sold must not be available commercially in the United States and providing these goods and services must not interfere with a facility's military mission; (8) due in part to these differing authorities, the extent to which the Army and the Air Force pursue partnering arrangements varies; (9) the Army has designated depots that may sell articles and services outside of DOD and has developed criteria for determining when such goods and services are not commercially available; (10) at the time of GAO's review the Army had established 13 partnering arrangements using both the sales statutes in title 10 and worksharing arrangements not requiring specific legislation; (11) Army and private-sector officials state that partnering has improved operational efficiencies at their respective facilities and that they are pursuing additional partnering opportunities; (12) the Secretary of Defense has delegated to the Secretary of the Air Force the authority to designate which facilities may sell articles and services outside of DOD; (13) however, the Air Force Secretary has not made any such designations nor developed criteria to determine whether a good or service is available from a domestic commercial source; (14) there have been several private-sector and depot proposals to enter into partnering arrangements but none have been approved; and (15) the Commander of the Air Force Materiel Command states that he is not opposed to partnering, but he is not willing to enter into such arrangements unless savings can be demonstrated.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: On June 22, 1999, the Air Force issued its partnering policy for direct sales, which included criteria for determining commercial availability of goods and services provided by the Air Logistics Centers.

    Recommendation: Considering DOD's expressed support of partnering, the Secretary of the Air Force should designate the Air Logistics Centers that may use the sales statutes and provide implementing guidance to include criteria for determining the commercial availability of goods or services provided by the Centers.

    Agency Affected: Department of Defense: Department of the Air Force


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