Under 10 U.S.C. 2466, the military departments and defense agencies can use no more than 50 percent of annual depot maintenance funding for work performed by private-sector contractors. DOD also must submit two reports to the Congress annually on the division of depot maintenance funding between the public and private sectors--one about the percentage of funds spent in the previous 2 fiscal years (prior-years report) and one about the current and 4 succeeding fiscal years (future-years report). As required, GAO reviewed the two DOD reports submitted in early 2004 and is, with this report, submitting its views to the Congress on whether (1) the military services met the so-called "50-50 requirement" for fiscal years 2002-3 and (2) the projections for fiscal years 2004-8 are reasonable estimates. GAO also identified key limitations in the 50-50 process that affect the department's ability to comply with the 50-50 requirement.
Recommendations for Executive Action
|Department of Defense||The Secretary of Defense should direct the Secretaries of the military departments, within 30 days of reporting 50-50 data indicating that past, current, or budget year data are within 2 percent of exceeding the 50 percent threshold, to submit a plan to the Office of the Secretary of Defense that identifies actions the military department shall take to ensure continued compliance, including the identification of decisions on candidate maintenance workload sourcing that could be made to support remaining within the 50 percent threshold.|
|Department of Defense||The Secretary of Defense should require the Secretaries of the military departments to direct the use of the services' audit agencies or an agreed-upon alternate method for third-party review and validation of 50-50 data and to ensure that auditor-identified errors in the data are corrected before the data are sent to the Congress.|
|Department of Defense||The Secretary of Defense should direct the Secretaries of the military departments to emphasize that individuals and staff receive proper and prompt training for 50-50 data gathering and reporting and that management at all levels afford the 50-50 process the level of attention necessary to produce an accurate and complete 50-50 report.|
|Department of Defense||The Secretary of Defense should direct the Commandant of the Marine Corps to require the Marine Corps' command responsible for weapon systems management to compile a consolidated report on its depot maintenance funding allocation between the public and private sectors.|