Defense Logistics: Air Force Lacks Data to Assess Contractor Logistics Support Approaches

GAO-01-618 Published: Sep 07, 2001. Publicly Released: Sep 07, 2001.
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The Department of Defense has directed the services to pursue logistics "reengineering" efforts to reduce logistics support costs. To this end, the Air Force has several efforts under way that apply commercial best practices and have, as a key feature, increased reliance on the private sector for logistics support. It is impossible to determine whether cost-effectiveness estimates for proposed contractor logistics support approaches are being achieved because the Air Force lacks the necessary data. Consequently, the Air Force may be testing and adopting support approaches without enough information to assess whether expected readiness improvements and cost reduction goals are being met. The Air Force's limited experience in repairing the same aircraft and components in both the public and private sectors and the lack of comparable and reliable historical financial data make it difficult to assess the cost-effectiveness of private versus public repair facilities. In addition, concerns raised about the impact of the increased use of contractor logistics support on the management of day-to-day activities have not been fully addressed.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should direct the Secretary of the Air Force to enhance accountability over logistics support decisions by (1) developing a requirement to have weapon systems program managers retain logistics support decision documentation, including that for the ongoing pilot programs, and conduct periodic assessments of these decisions to assess their cost effectiveness; (2) using the data from those assessments to develop lessons learned information that can be used to assess existing support strategies and new programs to identify the conditions under which the various support approaches are likely to achieve the most cost-effective results; and (3) use an existing corporate senior-level forum to address issues raised by major commands about expanding the use of contractor logistics support and to formally report on solutions recommended and actions taken to address these issues.
Closed - Implemented
In commenting on GAO's report, DOD partially concurred with the recommendation, but its planned actions did not appear to be fully responsive. Subsequent to its Air Force report, GAO issued an Army/Navy report on the same subject (GAO-02-306) with recommendations that reiterated the recommendation made in the Air Force report. DOD concurred with the recommendations in GAO's Army/Navy report and proposed corrective actions in response. In 2002, subsequent to the DOD response to GAO's recommendations, the Department decided to restructure its DOD 5000 regulation series, the intent of which included changes that implement GAO's recommendations. DOD's May 2003, 5000 policy revisions require that the services conduct continuing reviews of sustainment strategies, comparing expectations against actual performance, and where necessary, revise, correct, and improve sustainment strategies to meet performance requirements. Implementation of the revised policy's requirement to compare actual performance against expectations will achieve the objective of GAO's recommendation to periodically assess the cost effectiveness of logistics support strategies. With respect to the part of GAO's recommendation dealing with major commands concerns, the Department's revised 5000 regulation series also requires service agreements between the program manager and major commands. The Instruction requires program managers to work with the users to document performance and support requirements in performance agreements specifying objective outcomes, measures, resource commitments, and stakeholder responsibilities. The instruction also requires documenting logistics sustainment procedures that ensure integrated combat support. The revision of the 5000.2 Instruction reflects the department's reassessment of its approach for addressing major commands' concerns about expanded use of, and reliance on, contractor personnel as weapon systems logistics providers.

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