Air Force Logistics:

C-17 Support Plan Does Not Adequately Address Key Issues

NSIAD-99-147: Published: Jul 8, 1999. Publicly Released: Jul 8, 1999.

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David R. Warren
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Pursuant to a legislative requirement, GAO reviewed the Air Force's C-17 logistics support plan, focusing on the: (1) C-17's core logistics capabilities; (2) cost effectiveness of the planned support strategy; and (3) Air Force's implementation of the plan under current law.

GAO noted that: (1) the Air Force is working to pilot test a new logistics support concept for the C-17 that places increased reliance on the private sector for support; (2) the Air Force plan incorporating this concept was provided to Congress; (3) the plan has three key shortcomings that need to be addressed so the pilot's merits can be adequately assessed; (4) these shortcomings relate to identifying C-17 core requirements, the strategy's cost-effectiveness, and the Air Force's ability to implement the plan under law; (5) the plan the Air Force submitted to Congress did not identify C-17 core requirements or provide information on a process for establishing the specific capabilities needed to support such requirements; (6) the Air Force outlined its process for analyzing core requirements and capabilities and indicated that its approach to such analysis is not weapon-system specific; (7) to date, requirements for the C-17 aircraft have not been included in the Air Force's core process; (8) further, the Air Force stated that it does not expect to complete a core analysis incorporating the C-17 requirements until 2002; (9) the 1999 Air Force plan's conclusion that C-17 depot maintenance would be less cost-effective in Air Force depots is not adequately supported; (10) GAO's first concern is that the analysis is based on 1996 data, and more current information should have been used; (11) the conclusions drawn from the 1996 data about the cost-effectiveness of the private sector under the flexible sustainment approach are based on incomplete analysis; (12) the Air Force is not programming the funds that would be required to establish in-house logistics support capabilities, without which there may not be a viable in-house alternative; (13) GAO questions whether the Air Force plan can be implemented under current law; (14) the Air Force plan envisions that the C-17 contractor will contract with public depots for selected maintenance services for some C-17 systems and equipment; and (15) under applicable law, the Air Force must determine that the services to be obtained from public depots are not commercially available.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Air Force agreed with the intent of the recommendation, but stated that it would complete a C-17 core analysis by 2002 to dovetail with its final support decision in 2003. Initially, the Air Force did not plan to accelerate its C-17 core analysis and provide the information with the fiscal year 2001 budget, as GAO had recommended. However, on August 10, 1999, the Principal Deputy Under Secretary of Defense directed the services to identify their core logistics capabilities for depot level maintenance and repair by December 23, 1999. The Air Force completed its core analysis which included the C-17 aircraft on January 18, 2000.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to update the Air Force's core analysis to include the C-17 airframe and subsystems and provide this information with the fiscal year 2001 President's budget.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The Air Force initially said that it would follow its normal Source of Repair Assignment Analysis (SORAP) process, which includes a cost analysis. The Air Force's SORAP process does not identify specific cost elements, data sources, or methodologies for performing the cost analysis, so GAO would consider this action to be unresponsive. However, subsequently the Air Force decided to redirect its approach for making a C-17 life-cycle support decision for logistics including developing a methodology that will consider CORE requirements and best-value. A January 31, 2002, SAF/AQ memo documented the Air Force's decision to prepare a business case analysis documenting the program office's decisions regarding placement of CORE and non-CORE workloads. The program office has completed an extensive business case analysis concluding that the Air Force will use contractor logistics support for the C-17, but that significant C-17 workload has a CORE maintenance requirement, and that this workload will be accomplished at the three Air Force depots. The business case analysis allows for additional work to be performed at these depots based on future cost-effectiveness determinations.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to develop a more specific logistics resourcing plan that includes a comprehensive cost-effectiveness analysis and evaluation metrics prior to the submission of the 2001 budget.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: The Air Force did not incorporate funding requirements in to the fiscal year (FY) 2001, Program Objective Memorandum (POM) to support public depot maintenance as a final support decision. The Air Force said it plans to include about 10 percent of the funds necessary to establish organic capability in the FY2002 POM. The Air Force said that placing the funds in the FY2001 POM would have made funds available in 2003, the year of the decision. Air Force (IL) officials said that it is likely that they will not make a final support decision until near the end of FY2003. Consequently, there may be no executable funding requirements in the year of the decision. To preclude tying up funds in FY2003 that could be used to fund other requirements, the Air Force said it will program for public depot funding in the FY2002 POM, so that funds will be available in FY2004 for depot facilitation.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to develop budget requirements for public depot funding consistent with having this capability as a support option, including incorporating requirements in the fiscal year 2001 Program Objective Memorandum.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: The Air Force believes its actions, taken and planned, regarding the depot sale of goods and services to the C-17 support contractor are consistent with existing law. The Air Force has not, and does not, plan to seek special legislative authority to allow depots to sell goods and service to the C-17 support contractor, notwithstanding the commercial availability of those repair services.

    Recommendation: If the Department of Defense decides to implement the current support plan, the Secretary of Defense should seek legislative authority to allow military depots to sell depot maintenance goods and services to the C-17 support contractor, notwithstanding the commercial availability of those repair services.

    Agency Affected: Department of Defense


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