Fast Facts

About 40,000 civilians at Marine Corps, Navy, and Air Force depots maintain weapon systems and equipment. During FY 2020, COVID-19 exacerbated challenges the depots already faced, such as having too few people or materials to finish work.

The depots responded to COVID-19 by protecting personnel, shifting schedules, or pausing operations. DOD also acted to keep the funds used to operate depots solvent, despite reduced depot revenue.

Our 9 recommendations include that DOD provide guidance to depot personnel before a crisis, update depot contingency plans based on COVID-19 lessons learned, and publish its Working Capital Fund cash management policy.

Civilian depot employees work on an F-16 aircraft at Hill Air Force Base, Utah during COVID-19.

Masked civilian depot employees repairing an F-16 aircraft from below.

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Highlights

What GAO Found

The Coronavirus Disease 2019 (COVID-19) pandemic exacerbated productivity challenges Marine Corps, Navy, and Air Force depots already faced, such as not having enough personnel to perform maintenance. At half of the eight depots GAO reviewed, productivity was lower than planned every month during fiscal year 2020. For example, revenue at one Air Force depot was about 10 to 30 percent less than planned throughout fiscal year 2020. Prior to COVID-19, depot revenue was decreased due to fewer orders than planned at Marine Corps and Navy depots, and fewer flying hours than planned at Air Force depots, according to officials. After the onset of COVID-19, all eight depots reported that some of the challenges they were already facing worsened, such as personnel shortages.

Marine Corps, Navy, and Air Force management supported their workforce during COVID-19, but had challenges continuing operations and improving crisis response, according to GAO analysis. Depots supported the workforce by considering local conditions, adjusting operating schedules, and using remote work. However, depots did not consistently address key practices for continuing operations. Depot officials said that adapting existing contingency plans for natural disasters to COVID-19 added to confusion among mission-essential personnel early in the pandemic. Additionally, depots did not consistently document lessons learned. Improving guidance to depots, updating contingency plans to address a long-term crisis impacting the depot workforce, and using lessons learned from the COVID-19 pandemic to develop exercises, will help the depots protect the workforce and maintain productivity during a future crisis.

Congress and the Department of Defense (DOD) took steps to ensure the Navy and Air Force Working Capital Funds (WCFs) were solvent at the end of fiscal year 2020, but DOD's cash management policy is not reflected in current guidance. In March 2020, Congress provided the Navy and Air Force WCFs $475 million each through the CARES Act. In addition, DOD, Navy, and Air Force officials used a cash management policy in draft since July 2015 to raise cash balances above the lower cash requirement by the end of fiscal year 2020. However, DOD's cash management policy is not reflected in published DOD Financial Management Regulation. Publishing the guidance would improve transparency and the ability of Congress to oversee DOD WCFs.

Fiscal Year 2020 Working Capital Fund Cash Balances

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Why GAO Did This Study

Pandemics such as COVID-19 can impact the productivity of critical DOD depots that maintain weapon systems if essential personnel are unable to report for work. Navy and Air Force WCFs must also maintain cash balances sufficient for the activities they support, including the eight depots operated by the Marine Corps, Navy, and Air Force, to sustain readiness.

GAO was asked to assess the effects of COVID-19 on WCF and depot operations as part of its CARES Act oversight. This report (1) describes how COVID-19 impacted Marine Corps, Navy, and Air Force depot productivity; (2) examines the extent to which depot actions in response to COVID-19 addressed key practices to support the workforce, continue operations, and improve crisis response; and (3) examines the extent to which WCF cash management policy ensured financial solvency and reflected current guidance. GAO reviewed DOD guidance, depot revenue data for fiscal year 2020, and documents related to the impact of COVID-19 on productivity and WCF solvency; and interviewed depot and financial management officials.

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Recommendations

GAO is making nine recommendations, including that DOD develop guidance and a communication plan for mission-essential depot personnel; update contingency plans and exercises; record lessons learned from COVID-19; and publish WCF cash management policy. DOD concurred with GAO's recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of the Secretary of Defense 1. The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment develop guidance to ensure that depot management and civilian personnel are aware of their mission-essential status and the need to support readiness during a long-term crisis affecting the DOD depot workforce. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of the Secretary of Defense 2. The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment develop a communications plan to ensure that depot management and civilian personnel are aware of their mission-essential status and the need to support readiness during a long-term crisis affecting the depot workforce. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
United States Marine Corps 3. The Commandant of the Marine Corps should ensure that the Marine Corps Maintenance Command formally record lessons learned in response to the COVID-19 pandemic, and use lessons learned to update depot-specific contingency plans. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
United States Marine Corps 4. The Commandant of the Marine Corps should ensure that the Marine Corps Maintenance Command develop exercises for Marine Corps Production Plants to support productivity during any long-term crisis affecting the depot workforce. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of the Navy 5. The Secretary of the Navy should ensure that Naval Air Systems Command and the Commander, Fleet Readiness Centers formally record lessons learned in response to the COVID-19 pandemic, and use lessons learned to update depot-specific contingency plans. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of the Navy 6. The Secretary of the Navy should ensure that Naval Air Systems Command and the Commander, Fleet Readiness Centers develop exercises to support productivity during any long-term crisis affecting the depot workforce. (Recommendation 6)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of the Air Force 7. The Secretary of the Air Force should ensure that Air Force Material Command and the Air Force Sustainment Center formally record lessons learned in response to the COVID-19 pandemic, and use lessons learned to update depot-specific contingency plans. (Recommendation 7)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Department of the Air Force 8. The Secretary of the Air Force should ensure that Air Force Material Command and the Air Force Sustainment Center develop exercises to support productivity during any long-term crisis affecting the depot workforce. (Recommendation 8)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Office of the Secretary of Defense 9. The Secretary of Defense should ensure that the Under Secretary of Defense (Comptroller) publish the most recent DOD Working Capital Fund cash management policy in the DOD <i>Financial Management Regulation</i>. (Recommendation 9)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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