Depot Maintenance: Management Attention Required to Further
Improve Workload Allocation Data (09-NOV-01, GAO-02-95).
Federal statute stipulates that not more than 50 percent of
annual depot maintenance funding can be used for work by private
sector contractors. In a report on fiscal years 1998 and 1999
prior-years workloads and fiscal years 2000-2004 future-years
workloads, GAO could not determine whether the Department of
Defense (DOD) had complied with the 50-percent limitation. More
recent testimony highlighted continuing and pervasive weaknesses
in DOD's financial management systems, operations, and controls,
which impair its ability to accurately accumulate and report
reliable budget execution (including disbursements and
obligations) and cost data. The military departments had mixed
results complying with the 50-50 requirement for private sector
workloads in fiscal years 1999 and 2000. The projections of the
Army, Air Force, and Navy in DOD's report for fiscal years 2001
through 2005 are not accurate or reasonable estimates of the
future allocations of public and private sector workloads. The
services placed much less emphasis on the future-years data and
reports. The reported projections are based in part on incorrect
data, questionable assumptions, and some inconsistencies with
existing budgets and management plans. DOD's report should be
viewed with caution because it does not provide the best data
available to DOD decisionmakers and congressional overseers, and
the reported data are misleading with regard to how future
workloads are likely to be allocated between the public and
private sectors. Although DOD has greatly improved the 50-50
reporting guidance and the implementation of the reporting
process, opportunities for improvement still exist.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-02-95
ACCNO: A02417
TITLE: Depot Maintenance: Management Attention Required to
Further Improve Workload Allocation Data
DATE: 11/09/2001
SUBJECT: Contractors
Facility maintenance
Internal controls
Maintenance costs
Military budgets
Military cost control
Military facilities
Reporting requirements
AH-64 Helicopter
Apache Helicopter
Army Integrated Sustainment Maintenance
Program
Patriot Missile
Towed Decoy Program
******************************************************************
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GAO-02-95
Report to Congressional Committees
United States General Accounting Office
GAO
November 2001 DEPOT MAINTENANCE
Management Attention Required to Further Improve Workload Allocation Data
GAO- 02- 95
Page i GAO- 02- 95 Depot Maintenance Reporting Letter 1
Results in Brief 3 Background 4 Military Departments Had Mixed Results
Complying With 50- 50
Prior- Years Requirement 6 Future- Year Projections Are Not Reasonably
Accurate or Useful 14 Reporting Processes Improved, but Some Problems Remain
25 Conclusions 28 Recommendations for Executive Action 29 Agency Comments
and Our Evaluation 31 Scope and Methodology 32
Appendix I Comments From the Department of Defense 35
Appendix II GAO Contacts and Staff Acknowledgments 39 GAO Contacts 39
Acknowledgments 39
Related GAO Products 40
Tables
Table 1: DOD Reported Depot Maintenance Workload Allocations, Prior and
Future- Years Reports 6 Table 2: GAO Changes to Army Prior- Years Report 7
Table 3: GAO Changes to Air Force Prior- Years Report 9 Table 4: GAO Changes
to Navy Prior- Years Report 13 Table 5: GAO Changes to Army Future- Years
Report 15 Table 6: GAO Changes to Air Force Future- Years Report 18 Table 7:
GAO Changes to Navy Future- Years Report 23
Abbreviations
DOD Department of Defense OSD Office of the Secretary of Defense Contents
Page 1 GAO- 02- 95 Depot Maintenance Reporting
November 9, 2001 The Honorable Carl Levin Chairman The Honorable John Warner
Ranking Minority Member Committee on Armed Services United States Senate
The Honorable Bob Stump Chairman The Honorable Ike Skelton Ranking Minority
Member Committee on Armed Services House of Representatives
Section 2466 of title 10, U. S. Code, stipulates that not more than 50
percent of annual depot maintenance funding provided to the military
departments and defense agencies can be used for work accomplished by
private sector contractors. It also provides that the Secretary of a
military department may waive the 50- 50 requirement if the Secretary
determines a waiver is necessary for reasons of national security and
notifies Congress regarding the reasons for the waiver. Further, section
2466 provides that the Department of Defense (DOD) shall submit two reports
on public- and private- sector depot maintenance workloads to the Congress
every year. The first report is to provide the percentages of funds expended
in the public and private sectors during the 2 preceding fiscal years (the
?prioryears report?), and the second report is to project this same
information for the current and 4 succeeding fiscal years (the ?future-
years report?). For 2001, the prior- years report was issued on February 1,
2001, and the future- years report on April 1, 2001.
Section 2466 requires us to submit to Congress our views on whether DOD
complied with the 50- 50 requirement in the prior- years report and whether
the projections in the future- years report are reasonable. Accordingly, as
agreed with your offices, this report discusses whether (1) the military
departments met the 50- 50 requirement for fiscal years 1999 and 2000 and
(2) the projections for fiscal years 2001 through 2005 represent reasonable
estimates. As a part of our work, we also examined the DOD?s efforts to
improve the reporting process and sought to identify opportunities to
further improve it. To accomplish these objectives, we analyzed each
service?s procedures and internal management controls for collecting,
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 02- 95 Depot Maintenance Reporting
aggregating, and reporting depot maintenance information for purposes of
responding to the section 2466 requirements. Further explanation of our
methodology is provided in the scope and methodology section.
This is one in a series of reports on the 50- 50 requirement. In last year?s
report covering the fiscal year 1998 and 1999 prior- years workloads and
fiscal year 2000- 2004 future- years workloads, we noted that because of DOD
depot maintenance reporting data, we were unable to determine with precision
whether DOD had complied with the 50- percent limitation. 1 That report
recognized the limitations of DOD?s financial systems and data, noting that
in addition to the data reliability weaknesses, our audits of financial
management operations routinely identified pervasive weaknesses in financial
systems and fund controls that adversely affected DOD?s ability to
accumulate costs and reliably determine expenditures, obligations, and
funding availability. While we recognized that our analysis of DOD?s 50- 50
data showed that the quality of the data reported to Congress in 2000 was
substantially improved over previous years, we continued to find errors and
inconsistencies in the reporting and in how well the services documented
their analyses supporting their workload reports. At that time we
recommended, among other points, that the Secretary of Defense direct the
military departments to provide improved guidance and increased management
attention to improve workload reporting in several areas including the
reporting of depot- related portions of contractor logistics support and
warranties. We also recommended that the Air Force implement a long- term
strategy to comply with the 50- percent requirement. In an earlier report, 2
we observed that the future year projections, at best, provide a rough
estimate of future workload allocations since they are developed with
budgetary estimates that change over time. Consequently, the forecast and
actual workload mix will continue to differ because of the changing nature
of budget estimates.
Moreover, our recent testimony 3 highlighted continuing and pervasive
weaknesses in DOD?s financial management systems, operations, and controls,
which impair its ability to accurately accumulate and report
1 Depot Maintenance: Action Needed to Avoid Ceiling on Contract Workloads
(GAO/ NSIAD- 00- 193, Aug. 24, 2000). 2 Depot Maintenance: Future Year
Estimates of Public and Private Workloads Are Likely to Change (GAO/ NSIAD-
00- 69, Mar. 1, 2000). 3 DOD Financial Management: Integrated Approach,
Accountability, and Incentives Are Keys to Effective Reform (GAO- 01- 681T,
May 8, 2001).
Page 3 GAO- 02- 95 Depot Maintenance Reporting
reliable budget execution (including disbursements and obligations) and cost
data. To date, none of the military services or major DOD components has
passed the test of an independent financial audit. A continuing inability to
capture and report the full cost of its programs represents one of the most
significant impediments facing the Department. Nonetheless, the reported 50-
50 data are the only data available and are accepted and used for DOD
decisionmaking and for congressional oversight.
The military departments had mixed results complying with the 50- 50
requirement for private sector workloads in fiscal years 1999 and 2000.
Based on our review, the Army met the requirement for both 1999 and 2000,
while the Air Force met the requirement in 1999 but exceeded it in 2000,
issuing a national security waiver as provided for in 10 U. S. C. 2466.
Although we identified some errors in the Army and Air Force prior- years
data, improved guidance and data collection efforts and validation and
reviews by the Army and Air Force audit agencies indicate that the processes
of these departments provided a sufficient basis for evaluating compliance.
Further, in the Army?s case, the errors we identified were not material in
the context of the 50- 50 requirement because they were not sufficient to
cause it to exceed the limitation. With respect to the Air Force, the
cumulative errors added further support to the need for the Air Force
waiver. Although the reported Navy numbers indicated compliance with the 50-
50 requirement, because of concerns about management processes and data
validation, there is insufficient support for us to determine the Navy?s
compliance. An additional factor influencing our concerns is that Navy
leadership did not involve its internal audit service, as did the other
military departments.
The projections of the Army, Air Force, and Navy in DOD?s report for fiscal
years 2001 through 2005 are not accurate or reasonable estimates of the
future allocations of public and private sector workloads. The services?
management placed much less emphasis on the future- years data and reports.
The reported projections are based in part on incorrect data, questionable
assumptions, and some inconsistencies with existing budgets and management
plans. Further, our review identified errors and other shortcomings. As a
result, DOD?s report should be viewed with caution because it does not
provide the best data available to DOD decisionmakers and congressional
overseers, and the reported data are misleading with regard to how future
workloads are likely to be allocated between the public and private sectors.
For example, an apparent change in the Air Force?s public- private ratio for
fiscal year 2002 is due largely to a 17 percent rate increase in public
workloads. However, it is questionable that the Air Force?s projected
workload would be funded at the increased Results in Brief
Page 4 GAO- 02- 95 Depot Maintenance Reporting
rate as officials noted that a price increase of that magnitude would likely
result in a reduction in the amount of maintenance the operating commands
would be able to fund. Further, since January 2000 the Air Force has told
the Congress that it was developing a depot plan so that waivers of the 50-
50 requirement would not be needed. As of November 2001, it has not been
successful in implementing such a plan.
While DOD has greatly improved the 50- 50 reporting guidance and the
implementation of the reporting process, opportunities for improvement still
exist. We have noted improvements in the process each year in response to
our recommendations, particularly with respect to revisions to the reporting
guidance by the Office of the Secretary of Defense (OSD) and by the Air
Force and Army?s use of internal auditors to review data. At the same time,
some problems and concerns persist in the incomplete and inconsistent
recordkeeping by the services and Navy?s inadequate data validation. Thus
opportunities exist for DOD to take actions to improve the validity of the
process and the reliability of the data. Increased management direction and
oversight together with improved data validation efforts, expanded use of
service auditors, and continued clarification of guidance in identified
problem areas would help make the 50- 50 report a more useful management
tool for DOD in managing the Department?s depot maintenance program to help
maintain compliance with the 50- 50 requirement. It would also make the
report more useful to the Congress in its oversight of this requirement.
This report contains a number of recommendations for executive action
designed to improve the 50- 50 reporting process and the usefulness of the
data for Defense planners and for congressional oversight. DOD generally
concurred with the recommendations.
OSD has issued guidance to the military departments for reporting
publicprivate workload allocations required by 10 U. S. C. 2466. The
guidance is consistent with 10 U. S. C. 2460, which defines depot
maintenance and repair. The guidance requires the comprehensive reporting of
all work associated with the overhaul, upgrade, or rebuilding of parts,
assemblies, and subassemblies and the testing and reclamation of equipment,
regardless of the source of funds or the location at which maintenance is
performed. It also requires the reporting of software maintenance, interim
Background
Page 5 GAO- 02- 95 Depot Maintenance Reporting
contractor support, and contractor logistics support, to the extent work
performed in these categories is depot maintenance. 4
In recent years, the Department of Defense has implemented acquisition and
logistics policy initiatives that have shifted depot maintenance workloads
from the public to the private sector. We recently reported 5 that between
1987 and 2000, the public sector?s share of depot maintenance work declined
by 6 percent, while the private sector?s share increased by 90 percent. As
the military departments move closer to the 50- percent ceiling for private
sector work, with the Air Force exceeding the ceiling, the accuracy of the
collection and aggregation of 50- 50 data becomes increasingly important.
The data in the prior- years report are important because they provide the
best indicators the military departments have of the current public- private
sector allocations. While we have said that the future- year data provide a
rough estimate, the data are the Department?s only predictor to indicate
that management attention may be needed to avoid potential compliance
problems.
Table 1 provides a consolidated summary of DOD?s two reports to the Congress
on depot maintenance public and private sector workload allocations, dated
February 1, 2001 (prior- years) and April 1, 2001 (futureyears). The amounts
shown are actual obligations incurred for depot maintenance work in fiscal
years 1999 and 2000 and projected obligations for fiscal years 2001- 2005
based on the defense budget and service funding baselines. 6 The percentages
show the relative allocations between the public and private sectors.
4 Interim contractor support is designed to be an interim support
arrangement in which a contractor provides depot maintenance (and sometimes
other logistics support) as part of the acquisition strategy for new
systems. Contractor logistics support is designed to be a lifetime support
concept in which a contractor provides most or all elements of logistics
support, including depot maintenance.
5 Defense Maintenance: Sustaining Readiness Support Capabilities Requires a
Comprehensive Plan (GAO- 01- 533T, Mar. 23, 2001). 6 Although 10 U. S. C.
2466 specifies reporting of funds expended in the prior- years and projected
to be expended in the future- years, DOD?s past and current 50- 50 reports
are based on obligations data. A DOD official explained that obligation data
is considered to be more appropriate in view of the statutory requirement to
report funds made available in a given fiscal year and expenditure data may
not be completely recognized in the accounting records for a year or more
following its obligation. Summary of 50- 50 Data
Reported by DOD in February and April 2001 for Prior and Future Years
Page 6 GAO- 02- 95 Depot Maintenance Reporting
Table 1: DOD Reported Depot Maintenance Workload Allocations, Prior and
Future- Years Reports
Dollars in millions
Prior Years Future Years 1999 2000 2001 2002 2003 2004 2005 Air Force
Public $3,593 $3,066 $3,350 $3,998 $3,607 $3,604 $3,642 54% 49% 49% 54% 52%
52% 52% Private $3,012 $3,199 $3,520 $3,343 $3,358 $3,361 $3,370
46% 51% 51% 46% 48% 48% 48%
Total $6,605 $6,265 $6,869 $7,341 $6,966 $6,965 $7,012 Army
Pubic $1,035 $1,167 $1,257 $1,278 $1,575 $1,770 $1,670 53% 54% 54% 54% 59%
60% 61% Private $925 $987 $1,088 $1,078 $1,101 $1,167 $1051
47% 46% 46% 46% 41% 40% 39%
Total $1,960 $2,154 $2,345 $2,356 $2,676 $2,937 $2,721 Navy
Public $3,843 $3,984 $3,746 $4,282 $4,684 $4,323 $4,456 57% 55% 54% 55% 56%
57% 57% Private $2,850 $3,267 $3,215 $3,478 $3,623 $3,271 $3,346
43% 45% 46% 45% 44% 43% 43%
Total $6,693 $7,251 $6,961 $7,759 $8,307 $7,594 $7,802
Source: DOD ?50- 50 Reports?, dated Feb. 1 and Apr. 1, 2001. Marine Corps
data are reported as part of the Navy Department total.
The Department had mixed results complying with the 50- 50 prior- years
requirement for fiscal years 1999 and 2000. Based on our review, the Army
met the requirement for both 1999 and 2000, while the Air Force met the
requirement in 1999 but exceeded it in 2000, issuing a national security
waiver as provided for in the statute. Although we identified some errors in
the Army and Air Force prior- years data, improved guidance and data
collection efforts and validation and reviews by their audit agencies
indicate that the Army and Air Force processes provide a sufficient basis
for evaluating compliance. Further, in the Army?s case, the errors were not
material in the context of the 50- 50 requirement because they would not be
sufficient to cause it to exceed the limitation. With respect to the Air
Force, the cumulative errors further support the need for the Air Force
waiver. However, because of data reliability issues and concerns about
management controls and data validation, there is insufficient support for
us to determine the Navy?s compliance. Military Departments
Had Mixed Results Complying With 50- 50 Prior- Years Requirement
Page 7 GAO- 02- 95 Depot Maintenance Reporting
Based on our review, the Army met the 50- 50 requirement in both 1999 and
2000, with about a 53 to 47 percent public- private sector split in both
fiscal years 1999 and 2000. Our review of the Army?s prior- years 50- 50
report, internal reviews by auditors, and improved guidance and direction of
the data collection effort indicate that the Army process provides a
sufficient basis for determining that it met the 50- 50 requirement during
this 2- year period. While we identified errors that would increase private
sector costs, about 1 percent in fiscal year 2000 above that projected by
the Army, this would not be material to the 50- percent requirement since
the Army would still be about 3 percent below the ceiling. Table 2 shows our
adjustments to the Army data to correct for the errors we identified and the
resulting impacts on the public- private sector allocations.
Table 2: GAO Changes to Army Prior- Years Report
Dollars in millions
1999 2000
Public workload dollars reported $1,034.5 $1,167.1
Percentage reported 53% 54%
Army audit errors not corrected - $1.5 Other $3.7 $2.1 Revised public
workload $1,038.2 $1,170.7
Revised percentage 53% 53%
Private workload dollars reported $924.7 $987.2
Percentage reported 47% 46%
Government material not reported - $24.0 Army audit errors not corrected -
$20.4 Other - ($ 4.6) Revised private workload $924.7 $1,027.0
Revised percentage 47% 47% Total dollars reported $1,959.2 $2,154.3 Total
dollars revised $1,962.9 $2,197.7
Note: Dollar amounts in parenthesis are negative.
The errors and their impacts are as follows:
One reporting activity did not report about $24 million in
governmentfurnished material costs in fiscal year 2000. According to OSD and
Army guidance, the costs of government- furnished material supporting work
performed by contractors are to be reported as private sector costs. Other
Army activities we reviewed properly reported government- furnished material
costs. Army Met 50- 50
Requirement in Fiscal Years 1999 and 2000
Page 8 GAO- 02- 95 Depot Maintenance Reporting
While we determined that the reliability of the Army data was enhanced by
the work of the Army Audit Agency, the Army had not incorporated all the
adjustments recommended by the Army Audit Agency before the 50- 50 data were
submitted to OSD and subsequently to the Congress. Auditors reviewed more
than one- half of the reported dollars submitted to Army headquarters for
fiscal year 2000, identifying errors in about 5 percent of the items. Army
officials revised the 50- 50 data to correct for about $70 million of the
errors identified; but one activity- citing time constraints- did not make
another $21.9 million in adjustments for errors before the Army submitted
its report to OSD. Adjusting for these errors adds $20.4 million to the
private sector total and $1.5 million to the public sector total.
We identified several other small errors that in total would add $5.8
million to the public sector in fiscal year 1999 and subtract $4.6 million
from the private side in fiscal year 2000. These were attributable to
officials using budgeted requirements instead of actual obligations, double
counting, and other mistakes.
As previously noted, we recognize there are some systemic problems with
DOD?s financial data. However, based on the work of the Army Audit Agency
and our work, we believe the Army process provides a sufficient basis for
determining that it met the 50- 50 requirement during the 2- year prior-
year period of fiscal years 1999 and 2000.
Based on our review, the Air Force met the 50- 50 requirement in fiscal year
1999, with a 54 to 46 percent public- private split. However, the 48 to 52
percent public- private sector split in fiscal year 2000 required that the
Secretary of the Air Force issue a national security waiver and notify
Congress. We identified some reporting weaknesses that increased the amount
the Air Force exceeded the ceiling in fiscal year 2000 from the reported 1
percent to about 2 percent; and correcting for these weaknesses resulted in
increasing the private sector share in both fiscal years 1999 and 2000.
Consequently, the weaknesses were not material in the context of meeting the
50- 50 requirement since correcting for these weaknesses did not cause the
Air Force to exceed the limitation in fiscal year 1999 and it had already
reported exceeding the limitation in fiscal year 2000.
While recognizing some problems in the data, the Air Force data review
process added to the reliability and the credibility of the reported data
and, together with our work, serves as a basis for determining compliance
with the 50- 50 requirement. The 50- 50 data reported to Congress included
Air Force Met 50- 50
Requirement in Fiscal Year 1999 but Exceeded It in 2000, Issuing a Waiver
Page 9 GAO- 02- 95 Depot Maintenance Reporting
adjustments made as a result of reviews by the Air Force Audit Agency, Air
Force Materiel Command, and Air Force Headquarters. The auditors identified
adjustments amounting to 4.3 percent of the total workload. This rate is
higher than last year?s and follows several years of gradually declining
adjustment rates. 7 The higher rate was mainly attributed to rather large
errors in one acquisition program, late posting of a cash transfer into the
working capital fund, and high turnover in the staff assigned to collect
data.
Table 3 identifies the changes to the reported Air Force report after
adjusting to correct weaknesses we identified.
Table 3: GAO Changes to Air Force Prior- Years Report
Dollars in millions
1999 2000
Public workload dollars reported $3,593.4 $3,066.3
Percentage reported 54% 49%
General & admin. adjustment (42.6) ($ 57.9) Revised public workload $3,550.8
$3,008.4
Revised percentage 54% 48%
Private workload dollars reported $3,011.7 $3,199.1
Percentage reported 46% 51%
General & admin. adjustment $42.6 $57.9 Contracts not reported $0.2 $2.1
Revised private workload $3,054.5 $3,259.1
Revised percentage 46% 52% Total dollars reported $6,605.1 $6,265.4 Total
dollars revised $6,605.3 $6,267.5
Note: Dollar amounts in parenthesis are negative.
7 The previous Air Force Audit Agency adjustment rates were 1.2 percent
(1999), 3 percent (1998), and 9 percent (1997).
Page 10 GAO- 02- 95 Depot Maintenance Reporting
The reporting weaknesses and their impacts are as follows:
As in past years, 1 Air Force officials continue to adjust the 50- 50 data
for general and administrative expenses associated with managing depot
maintenance contracts. These amounts are for overhead and salary costs
incurred by government personnel charged with administering depot
maintenance contracts funded through the working capital fund. Air Force
headquarters and Materiel Command officials subtract these amounts ($ 57.9
million in fiscal year 2000) from the private sector costs- where they are
accounted for within the working capital fund- and add them to the public
sector costs for 50- 50 purposes. Air Force officials told us that they
believe these costs should be reported as part of the public sector since
government employees incur them. Although this type of cost is not
specifically addressed, OSD 50- 50 guidance requires that the costs for all
factors of production- labor, material, parts, indirect, and overhead-
associated with a particular repair workload should be counted in the sector
accomplishing the actual maintenance. For example, contract maintenance on
depot plant equipment used by government employees to repair items should be
counted as public sector costs because they are incurred by the government
in producing the repair. Thus, consistent with our prior assessments, we
continue to believe that it is appropriate to count the general and
administrative costs associated with administering depot maintenance
contracts as part of the private sector costs of doing business.
Accordingly, in table 2 we reversed the Air Force adjustments to again
report them as private sector costs.
We also identified unreported contractor logistics support costs totaling
about $2.3 million in both fiscal years 1999 and 2000. The Joint Stars
program office reported most of its depot maintenance dollars appropriately
but did not report technical data support costs. Additionally, one office in
the Special Operations Directorate did not report contract maintenance costs
that should have been reported based on Air Force 50- 50 guidance.
As previously noted, we recognize there are some systemic problems with
DOD?s financial data, but the Air Force has made improvements in the
1 We reported on this and other issues concerning DOD?s 50- 50 submissions
last year in
Depot Maintenance: Actions Needed to Avoid Exceeding the Ceiling on Contract
Workloads (GAO/ NSIAD- 00- 193, Aug. 24, 2000). Other 50- 50 reports are
listed in the Related GAO Products section at the end of this report.
Page 11 GAO- 02- 95 Depot Maintenance Reporting
50- 50 reporting data processes since the requirement to submit the report
to Congress was imposed. Based on the past improvement efforts and the more
recent work of the Air Force Audit Agency and us, we believe the Air Force
provided a sufficient basis for determining that the Air Force met the 50-
50 requirement during fiscal year 1999 and exceeded it in fiscal year 2000,
but submitted a waiver as provided by statute.
As authorized under section 2466, on January 11, 2000, the Air Force
notified the Congress that the Secretary was waiving the applicability of
the 50- percent limitation on private sector contracting for fiscal year
2000 for reasons of national security. The Air Force explanation for the
waiver was based primarily on the need to use temporary contracts to support
transitioning workloads from closing depots. However, we reported previously
that the temporary contracts represented only a minor share of the Air Force
contract workload. 2 We noted that the more significant factors were
previous Air Force actions, such as the increase of long- term depot
maintenance contracts from $600 million in 1996 to $1.1 billion in 2000 and
the transfer of about half of the workload from two closing depots to the
private sector, had increased the private sector share from 36 percent in
fiscal year 1991 to the 50- percent ceiling in fiscal year 2000. These
actions left Air Force officials little flexibility to use emergency
contracts without exceeding the ceiling for contract depot maintenance work.
We also pointed out that while the Air Force projected that it would
exercise management changes to remain within the 50- percent limitation in
fiscal year 2000 and beyond, it was uncertain whether it would be successful
in these efforts.
Because of weaknesses in the Navy?s reporting processes and data, we were
unable to determine whether the Navy complied with the 50- percent
requirement for the 1999 and 2000 prior- years report. The Navy?s report, as
presented, indicates that the Navy complied with the requirement in both
years, with a 57- 43 percent mix in fiscal year 1999 and a 55- 45 percent
mix in 2000. However, our review of the Navy 50- 50 data for fiscal years
1999 and 2000 identified concerns about management controls and data
validation processes. Also, Navy leadership chose not to use the Naval Audit
Service as a part of this year?s process, and the absence of this review
added to our concern about the reliability of the Navy data. The
2 Depot Maintenance: Air Force Faces Challenges in Managing to 50- 50
Ceiling
(GAO/ T- NSIAD- 00- 112, Mar. 3, 2000) and Depot Maintenance: Air Force
Waiver to 10 U. S. C. 2466 (GAO/ NSIAD- 00- 152R, May 22, 2000). 50- 50
Waiver Issued for Fiscal
Year 2000 Process and Data Weaknesses Preclude Determination of Compliance
in Navy
Page 12 GAO- 02- 95 Depot Maintenance Reporting
specific process problems, which are discussed in more detail later in our
overall analyses of the military services? data reporting processes, include
(1) a decentralized and tiered reporting process that consolidated 50- 50
numbers into summary reports with little evidence that the data were checked
and validated while passing through the reporting layers and (2) the
inability to track and document the estimating methodologies. While we have
identified these same issues in the past, Navy leadership has not placed
enough emphasis on the 50- 50 reporting process to make the improvements
required to assure that the data reported provide a sufficient basis for
developing the Navy?s 50- 50 information in the prioryears report.
For example, the Naval Sea Systems Command, which reported about onefifth of
the total Navy 50- 50 amount for this time period, had one coordinating
official who received summary data from 37 reporting units. Some units had
in turn rolled up data received from as many as 10 subactivities.
Individuals generally accepted the data, rolled up totals, and transmitted
them up the reporting chain without conducting in- depth critical checks of
the data. In most cases, an audit trail to track individual subactivity 50-
50 submissions that were subsequently rolled- up into a single program or
project unit figure did not exist.
In addition to our concerns about the Navy?s process, we identified one
major reporting inconsistency that would impact the public- private sector
allocations as shown in table 4.
Page 13 GAO- 02- 95 Depot Maintenance Reporting
Table 4: GAO Changes to Navy Prior- Years Report
Dollars in millions
1999 2000
Public workload dollars reported $3,843.4 $3,983.5
Percentage reported 57% 55%
Revised public workload $3,843.4 $3,983.5
Revised percentage 57% 55%
Private workload dollars reported $2,850.0 $3,267.0
Percentage reported 43% 45%
Inactivation costs not reported $81.8 $31.8
Revised private workload $2,931.8 $3,298.8 Revised percentage 43% 45% Total
dollars reported $6,693.4 $7,250.5 Total dollars revised $6,775.2 $7,282.3
We determined that two activities within the Naval Sea Systems Command
reported inactivation activities 3 inconsistently. One project office
reported $650 million in nuclear ship inactivation costs performed mainly at
the public shipyards, but another project office did not report about $113.6
million in conventional ship inactivation costs performed mainly in the
private sector ($ 81.8 million in fiscal year 1999 and $31.8 million in
fiscal year 2000). Officials from the non- reporting office said they did
not know these types of costs were to be reported for 50- 50 purposes. It is
uncertain how many other activities have similar non- reported costs. DOD?s
financial management regulation includes inactivation activities as
reportable depot maintenance workloads. The internal Navy guidance specified
reporting nuclear ship inactivations but did not mention conventional ships.
In commenting on a draft of this report, Navy officials said that the
relatively complex process for nuclear ship inactivations is considered to
be equivalent to depot maintenance and repair, while the less- complex
process for conventional ship inactivations is not generally considered
equivalent to depot- level work. However, we believe that some portion of
the conventional ship workload should be reported as depot maintenance,
3 DOD Financial Management Regulation 7000. 14- R, Vol. 6, Ch. 14 prescribes
depot maintenance reporting requirements and includes inactivation as a
depot maintenance activity. It defines inactivation as the servicing and
preservation of an item before it is placed in storage or in an inactive
status.
Page 14 GAO- 02- 95 Depot Maintenance Reporting
based on follow- up reviews with Navy program officials. OSD is developing
additional guidance to clarify this reporting category for future 50- 50
reports.
The projections of the Army, Air Force, and Navy in DOD?s future- years?
report for fiscal years 2001 through 2005 are not reasonably accurate
estimates of the future allocations of public and private sector workloads.
The services? management placed much less emphasis on the future- years data
and reports. The reported projections are based in part on incorrect data,
questionable assumptions, and some inconsistencies with existing budgets and
management plans. Further, our review identified errors, inconsistencies,
and other shortcomings. As a result, DOD?s future- years report should be
viewed with caution because it does not provide the best data available to
DOD decisionmakers and congressional overseers, and the reported data is
misleading with regard to how future workloads are likely to be allocated
between the public and private sectors. To make the future year 50- 50
report a useful management tool would require improved management oversight
and direction.
While the reported Army future years? workload allocations show an
increasing public sector share, after adjusting the reported numbers to
correct for errors and omissions, the net effect is an increase in the
projected private sector?s share for each year. In our last year?s report,
we noted that the Army faced long- term challenges remaining within the
contract ceiling. Army officials said that they had taken action to increase
the public sector?s share, not only to deal with the contract workload
ceiling but also to more cost- effectively use underutilized Army depot
infrastructure. The reported Army numbers suggested that these actions were
effective. However, we identified significant problems and omissions in the
Army?s reporting of its future- years 50- 50 data, the net effect of which
significantly increases the projected private sector?s share each year.
Whereas the Army reported that public sector workloads were projected to
increase in the future years, in actuality, after correcting for errors and
omissions, the data show that the Army is substantially closer to the
private sector limitation and that the future expected public- private
sector allocations are relatively constant. Table 5 summarizes adjustments
we made to the reported future year Army numbers. Future- Year
Projections Are Not Reasonably Accurate or Useful
Army Future- Year Projections Are Inaccurate and Do Not Portray Continuing
Challenge
Page 15 GAO- 02- 95 Depot Maintenance Reporting
Table 5: GAO Changes to Army Future- Years Report
Dollars in millions
2001 2002 2003 2004 2005
Public workload dollars reported $1,256.6 $1,278.0 $1,575.2 $1,769.9
$1,670.4
Percentage reported 54% 54% 59% 60% 61%
Transcription error - - (211.6) ($ 324.0) ($ 147.9) Repairs at non- depot
locations $24.0 $24.0 $24.0 $24.0 $24.0 Double- counting costs - - - ($
19.9) Revised public workload $1,280.6 $1,302.0 $1,387.6 $1,450.0 $1,546.5
Revised percentage 52% 52% 53% 53% 56%
Private workload reported $1,088.0 $1,077.9 $1,100.6 $1,167.2 $1,050.8
Percentage reported 46% 46% 41% 40% 39%
Contractor costs not reported $25.7 $28.6 $37.0 $63.5 $72.3 Government
material not reported $24.0 $24.0 $24.0 $24.0 $24.0 Repairs at non- depot
locations $56.0 $56.0 $56.0 $56.0 $56.0 Double- counting costs - - - ($
36.3) Revised private workload $1,193.7 $1.186.5 $1,217.6 $1,274.4 $1,203.1
Revised percentage 48% 48% 47% 47% 44% Total dollars reported $2,344.6
$2,355.9 $2,675.8 $2,937.1 $2,721.2 Total dollars revised $2,474.3 $2,488.5
$2,605.2 $2,724.4 $2,749.6
Note: Dollar amounts in parenthesis are negative.
The errors and their impacts are as follows:
One reporting activity made a series of transcription errors that reported
thousands of dollars as millions of dollars. These errors overstated public
sector workloads by a total of $683.5 million in fiscal years 2003 -2005.
This same activity did not fully report contractor costs for contractor
logistics support, which resulted in understating private sector workloads
by a total of about $227. 1 million in fiscal years 2001- 2005.
Page 16 GAO- 02- 95 Depot Maintenance Reporting
Two major commands did not report depot costs associated with the Army?s
Integrated Sustainment Management program. 4 Officials said they did not
report these costs because the Army Materiel Command will eventually be
responsible for the reporting. However, a Materiel Command official told us
the command was not ready to assume this reporting and did not include the
costs of these activities in the 50- 50 report. These additional projected
costs are estimated to add $24 million per year to the public sector
reporting and $56 million per year for the private sector. As we reported in
the past, the Army?s move to consolidate maintenance activities under the
National Maintenance Program and to perform depot- level maintenance at
field locations continues to pose reporting challenges and could result in
an underreporting of both public and private sector costs. 5
As discussed in the section on the prior- years report, one Army reporting
activity had not reported the costs of government- furnished material. This
material, when supplied to a contractor for use in the maintenance process,
should be counted as private sector work. Assuming annual material costs
stay constant at the fiscal year 2000 level ($ 24 million), this activity
underreported private sector costs by about $120 million over the 5- year
reporting period.
Another activity double- counted $19.9 million dollars of its public
sector workload and $36 million of its private sector workload for fiscal
year 2004. Estimates for maintenance costs for 7 systems were erroneously
entered twice for 2004.
There are some additional non- quantifiable factors that are expected to
have major impacts on the Army?s future depot maintenance program and these
factors further support our concern (1) with the reasonableness of the
Army?s future year projections and (2) that the Army will be challenged in
the future to manage its depot maintenance program within
4 Integrated Sustainment Management is a program established by the Army
Materiel Command in 1996 to consolidate workloads and eliminate the
proliferation of depot maintenance- type activities. Our prior work, Depot
Maintenance: Army Report Provides Incomplete Assessment of Depot- type
Capabilities (GAO/ NSIAD 00- 20, Oct. 15, 1999), showed that the Army?s
major operating commands developed extensive redundant local maintenance
facilities at multiple locations that supported similar capabilities and
workloads.
5 Depot Maintenance: Army Report Provides Incomplete Assessment of Depot-
type Capabilities (GAO/ NSIAD- 00- 20, Oct. 15, 1999).
Page 17 GAO- 02- 95 Depot Maintenance Reporting
the 50- 50 ceiling. First, quality of the future- years data is questionable
because some funding priorities and plans have substantially changed since
the budget figures supporting the 50- 50 projections were prepared. Revised
plans for extensive repairs of the Patriot Missile and the Apache Helicopter
will likely alter depot workload projections and public- private sector
percentage allocations.
A second factor of potentially greater impact involves depot maintenance
requirements associated with the Army?s recapitalization program. 6 Funding
requirements and implementation strategies for the recapitalization program
are not fully known at this time and continue to evolve. Consequently, these
requirements and expected public- private sector allocations were not fully
reflected in the 50- 50 outyear projections. At the time of our review, Army
records showed that it planned to spend about $15.5 billion on recapitalized
systems between fiscal years 2002 and 2007. Army officials said, however,
that additional funding of at least $7.6 billion is needed over this period
but this has not yet been budgeted. 7 Procedures for managing and
coordinating the recapitalization program were finalized in April 2001, and
detailed implementation strategies are currently being developed for each of
the 21 weapon systems to be recapitalized. While it appears that a
significant portion of the program expenditures will be considered depot
maintenance- type work, the plans supporting the distribution of workloads
between the public and private sectors have not yet been finalized.
Although the reported data indicate that the Air Force would breach the 50-
percent ceiling in fiscal year 2001 but not in fiscal years 2002- 2005, we
identified significant problems and questionable assumptions in the Air
Force?s reporting of its future year 50- 50 data, which indicate that the
future contract work is understated. After adjusting the reported numbers to
correct the problems we could quantify, the net effect is an increase in the
private sector share projected for each year. In addition, other significant
factors cannot be quantified, but indicate further growth in the private
sector is likely. Taken together, the Air Force will likely continue
6 The recapitalization program is the Army?s plan to modernize and sustain
its aging weapon systems. The program will restore currently fielded systems
such as the M- 1 tank and the Bradley infantry vehicle. It will rebuild and
upgrade the systems to ensure operational readiness and a ?zero time/ zero
mile? like new condition.
7 Five of the 21 Army Recapitalization Programs have not yet been funded and
there is a funding shortfall for the other systems. Air Force?s Future- Year
Projections Are Inaccurate and Problems Will Likely Lead to More Waivers
Page 18 GAO- 02- 95 Depot Maintenance Reporting
to exceed the 50- percent private sector limitation, leading to more waivers
such as the second one recently issued for fiscal year 2001. Table 6 shows
the reported data, our quantifiable adjustments, and the resulting impacts
on allocations. The revised allocations show the Air Force just under the
50- percent ceiling for the future years. Significantly, the reported and
revised amounts are both over the 48- percent target for private- sector
allocation that Air Force officials established for management purposes to
allow for some flexibility under the ceiling if estimates and circumstances
change.
Table 6: GAO Changes to Air Force Future- Years Report
Dollars in Millions
2001 2002 2003 2004 2005
Public workload reported $3,349.6 $3,997.6 $3,607.4 $3,603.6 $3,642.0
Percentage reported 49% 55% 52% 52% 52%
General & admin. adjustment ($ 56.1) ($ 53.2) ($ 51.1) ($ 51.0) ($ 51.7)
Additional bridge contracts - ($ 11.0) ($ 2.6) ($ 2.5) Additional contract
augmentees ($ 1. 6)($ 3. 4)-- New Items in source of repair - $0.7 $3.9 $3.9
$4.4 Revised public workload $3,291.9 $3,930.7 $3,557.6 $3,554.0 $3,594.7
Revised percentage 48% 53% 51% 51% 51%
Private workload reported $3,519.8 $3,342.9 $3,358.1 $3,361.3 $3,369.5
Percentage reported 51% 45% 48% 48% 48%
General & admin. adjustment $56.1 $53.2 $51.1 $51.0 $51.7 Additional bridge
contracts - $11.0 $2.6 $2.5 Additional contract augmentees $1.6 $3.4 - - New
items in source of repair - $32.2 $41.3 $58.0 $56.3 Contracts not reported
$2.4 $0.7 $0.7 $0.7 $0.7 Mod installations not reported - - $1.0 $1.0 $1.0
Revised private workload $3,579.9 $3,443.4 $3,454.8 $3,474.5 $3,479.2
Revised percentage 52% 47% 49% 49% 49% Total dollars reported $6,869.4
$7,340.5 $6,965.5 $6,964.9 $7,011.5 Total dollars revised $6,871.8 $7,374.1
$7,012.4 $7,028.5 $7,073.9
Note: Dollar amounts in parenthesis are negative.
Page 19 GAO- 02- 95 Depot Maintenance Reporting
The reporting weaknesses, errors, and their impacts are as follows:
As discussed in our analysis of the Air Force?s prior- year numbers, the
Air Force?s adjustments for general and administrative expenses associated
with contracted workload shifts more than $100 million annually adding about
$50 million to the public sector and subtracting the same amount from the
private sector. We think it more appropriate to count these expenses as part
of the private sector amounts. They are overhead costs required to manage
contract workloads; and the OSD reporting guidance says that the costs for
all factors of production labor, material, parts, indirect, and overhead
associated with a particular repair workload should be counted in the sector
accomplishing the actual maintenance. In table 6 we reverse the contract
administration adjustment each year. This adds about $263.1 million to
projected private sector work for the reporting period and decreases the
public sector by the same amount.
The Air Force data do not fully reflect depot officials? estimates of the
continuing need for temporary contracts and contractor augmentees resulting
from work transfers from base closures and contract competitions. 8 At the
time the future- years report was submitted, these would have added about
$21.1 million to the private sector costs for the fiscal year 2001- 2004
reporting period and decreased the public side by the same amount.
The Air Force data do not include the estimated repair costs of new
systems and upgrades being reviewed for establishing the source of repair.
Most of these items 48 of 66 and representing about 90 percent of the repair
cost estimates for all the systems undergoing the review are currently
recommended for private sector repair. Examples include the C- 5 AMP repair,
which is expected to add about $57 million in private sector repair costs
and the KC- 10 reverser fan modification, which is expected to add $41
million in private sector repair costs between fiscal years 2001 and 2005.
Although some of these source- of- repair decisions could change, as they
stand now, the net effect of the additional workloads would add about
another $175 million to the private sector costs for fiscal years 2002
through
8 Increased use of temporary contracts and contractor augmentees (temporary
contract personnel performing depot maintenance at a government facility)
was the stated basis for the fiscal year 2000 waiver of the 50- 50
requirement. However, as previously discussed, we determined that these
costs were a minor part of the Air Force?s 50- 50 problem.
Page 20 GAO- 02- 95 Depot Maintenance Reporting
2005. In commenting on a draft of this report, Air Force officials pointed
out that it is difficult to accurately project the outcome of the source of
repair process and that the annual dollar projections are very rough budget
estimates. However, all of the data projected in the future- years report
are point- in- time estimates and subject to change. Incorporating estimated
costs for systems in the source- of- repair process would provide a more
comprehensive and useful projection of expected future public- private
sector allocations.
We also identified underreported contractor logistics support costs and
contractor costs to install modifications totaling about $8.2 million.
Program officials at one activity were unaware of the 50- 50 reporting
requirement, while other offices reported some, but not all, of the depot-
related contract costs. Officials in the Towed Decoy program office said
they did not know that the costs for installing modifications should be
reported as depot maintenance costs. The Joint Stars program office did not
report technical data support costs and the Special Operations office did
not report contract maintenance costs. As we have reported in the past, it
is difficult to identify to what extent costs that should be reported are
being reported. However, based on our review this year, we noted
improvements in reporting these kinds of contract costs.
In addition to the problems we could quantify, there are some other
significant factors which, while they cannot be quantified, are likely to
have major impacts on future- year workloads as the Air Force moves closer
to execution. Both public and private sector amounts can be affected.
However, based on past experience, the Air Force?s practice of placing more
depot repair work for new and upgraded systems in the private sector, and
the unlikely event that the in- house depots will receive the projected
amounts of work currently estimated, it is likely that the Air Force will
continue to need to waive the 50- percent limitation in the future, absent
corrective action.
One of the non- quantifiable factors is the relative accuracy of cost and
budget data reported by the depot maintenance activity group, a part of the
Air Force working capital fund. From 70 to 80 percent of the total depot
maintenance amounts reported annually by the Air Force are financed through
the depot maintenance activity group. Consequently, the relative accuracy of
budget projections and accounting records for the activity group will
significantly affect the quality and completeness of the Air Force?s 50- 50
data. However, our review last year of the depot maintenance activity group
identified poor budget estimates, inaccurate
Page 21 GAO- 02- 95 Depot Maintenance Reporting
pricing, and overoptimistic assumptions about worker productivity and
process improvement savings. 9
In addition, the rates charged for maintenance work and workload assumptions
used in estimating fiscal years 2003- 2005 requirements did not incorporate
price increases for both public and private workloads, nor did they fully
reflect expected surcharges and other workload changes. In recent years,
operating losses in the depot maintenance activity group have necessitated
large cash inflows and surcharges applied to maintenance rates to balance
the accounts. For example, a reimbursement of $483 million ($ 417 million
for the public sector and $66 million for the private sector) was spread
over fiscal years 2001 and 2002 to make up for accumulated losses in the
Depot Maintenance Activity Group operations for fiscal year 2000 and prior
years. Performance indicators to date indicate that financial performance
problems are continuing in fiscal year 2001 that could require changes in
future rates and surcharges. Also, the apparent improvement in the 50- 50
ratio for fiscal year 2002 shown in DOD?s report and table 1 in this report
is due largely to a 17- percent rate increase on public workloads. However,
it is questionable whether the projected public workload program can be
funded at the higher rates. Depot officials noted that a price increase of
that magnitude would likely result in a reduction in the amount of
maintenance the operating commands would be able to fund. They said that
budget estimates used to support the projections assumed that 100 percent of
the anticipated workload would be accomplished. In reality, actual
performance generally does not approach 100 percent, resulting in an
overstatement of the reported 50- 50 data. Officials at the three Air Force
depots said that historically in the year of program execution, there are
reductions in the depot maintenance program performed in the public depots
and an increase in the amount of contracted workload over what had been
projected. An official at one depot said that only about 94 percent of the
current program would likely be accomplished in fiscal year 2001 due to
operating inefficiencies, parts shortages, budget reductions, and other
constraints. Air Force Materiel Command headquarters officials said this
lower execution rate can affect both public and private workloads, but it
generally has a greater impact in reducing the actual work accomplished in
public depots. Changes in the amount of workload that is actually
9 Air Force Depot Maintenance: Budgeting difficulties and Operational
Inefficiencies
(GAO/ AIMD/ NSIAD- 00- 185, Aug. 15, 2000.)
Page 22 GAO- 02- 95 Depot Maintenance Reporting
accomplished will have obvious impacts on the dollars and public- private
sector allocations reported in the future.
The Air Force future- years report shows the Department exceeding the 50-
percent ceiling in 2001. On July 31, 2001, the Air Force notified Congress
that the Secretary of the Air Force had waived the 50- percent requirement
for fiscal year 2001. The waiver determination was justified as necessary
for national security because ?the Air Force concluded that no significant
workload could be moved into the public depots in the near term without
increased cost and an adverse effect on readiness.? While we did not analyze
the basis for the Air Force?s determination, we agree that those
transitioning workloads, whether new or old ones, to a military depot would
require increased funding.
The Air Force waiver determination also said that to address future
compliance, the Air Force is preparing a long- term strategic plan that will
address current capacity shortfalls, as well as new technologies and the
associated infrastructure. This long- term depot strategy is supposed to be
designed to ensure compliance with the 50- percent limitation.
However, the Air Force promised such a plan last year but has not been
successful in developing it. After announcing on January 11, 2000, that the
Air Force would exceed the 50- percent limitation last year, the Air Force
told interested Congressional members and the Subcommittee on Readiness,
Senate Committee on Armed Services, that it was developing a short- and
long- term strategy for resolving the 50- 50 dilemma. According to Air Force
officials, they were unsuccessful in identifying workloads that could be
moved into the Air Force depots in the short term and were equally
unsuccessful in identifying workload to transfer into the depots in the long
term. Program offices said they had entered into long- term contracts with
private contractors and they had not budgeted for technical data or depot
plant equipment and facilities that might be required before establishing an
in- house capability in one of the three remaining Air Force depots.
Further, DOD and Air Force acquisition strategy continues to express a
preference for long- term contractor logistics support, to include
maintenance, supply, and other logistics functions. This year?s waiver
determination did not specify a date for the completion of the Air Force?s
latest effort in developing a long- term depot strategy that would resolve
the Air Force?s current 50- 50 imbalance. As of November 2001, it has not
been successful in implementing such a plan. Without an approved strategy
for increasing the Air Force depots? workloads and the funding of the
resources required to establish new capability, the Air Force will not be
able to resolve its 50- 50 problem. The Air Force?s long- term depot Air
Force Issued a Second
Waiver for Fiscal Year 2001
Page 23 GAO- 02- 95 Depot Maintenance Reporting
strategy is now expected to be completed by the end of calendar year 2001,
according to officials commenting on our draft report.
We identified two major problems in reporting that, together with our
reservations about the reliability of the Navy?s data, lead us to conclude
that, like the other services, the Navy?s future year projections are not
accurate. The resulting impacts on public- private sector allocations after
adjusting for these problems are displayed in table 7.
Table 7: GAO Changes to Navy Future- Years Report
Dollars in millions
2001 2002 2003 2004 2005
Public workload reported $3,745.7 $4,281.9 $4,684.0 $4,323.1 $4,456.0
Percentage reported 54% 55% 56% 57% 57%
Revised public workload $3,745.7 $4,281.9 $4,684.0 $4,323.1 $4,456.0
Revised percentage 52% 54% 56% 56% 56%
Private workload reported $3,215.0 $3,477.5 $3,623.1 $3,271.0 $3,346.2
Percentage reported 46% 45% 44% 43% 43%
Inactivation costs not reported $74.5 $56.6 $86.8 $58.2 $80.7 USS Cole
repairs not counted $150.0 $93.0 - - Revised private workload $3,439.5
$3,627.1 $3,709.9 $3,329.2 $3,426.9
Revised percentage 48% 46% 44% 44% 44% Total dollars reported $6,960.7
$7,759.4 $8,307.1 $7,594.1 $7,802.2 Total dollars revised $7,185.2 $7,909.0
$8,393.9 $7,652.3 $7,882.9
The problems and their impacts on the allocations are as follows:
As discussed in the earlier section on the prior- years 50- 50 report, the
Navy did not report inactivation costs for conventional ships as depot
maintenance costs but reported similar work for nuclear ships. The Navy
projects that up to $357 million over the 5- year period covered in the
future- years report will be spent on conventional ship inactivation
activities, mostly in the private sector. The Navy projections did include
about $1.2 billion in nuclear inactivation workloads at public shipyards for
this time period. As discussed earlier, the Navy believes that conventional
ship inactivation workload is generally not equivalent in complexity to
depot- level maintenance. A Navy official said they would use the additional
clarifying guidance being developed by OSD in reporting future 50- 50
workload allocations. Navy and Marine Corps
Future- Year Projections Are Inaccurate
Page 24 GAO- 02- 95 Depot Maintenance Reporting
We also determined that the Navy did not include the costs of repairs on
the USS Cole, the target of last year?s terrorist attack. The Congress late
in calendar year 2000 appropriated $150 million in fiscal year 2001 funds
for these repairs, which are to be accomplished at a private shipyard.
Officials said the 2001 supplemental came after the 50- 50 report was
developed. Officials estimate that about another $93 million will be
required to complete repairs on the USS Cole, which was also not reported in
the 50- 50 data. For display purposes, table 7 shows this additional amount
in fiscal year 2002.
Several other issues affect the Navy?s report but are not quantified. For
example, the Navy plans call for a substantial increase in submarine depot
maintenance workloads associated with a major refueling program during this
reporting period. Most of the work is expected- and was reported for 50- 50
purposes- to be accomplished at the public shipyards. However, Naval Sea
Systems Command officials told us that the plans and depot requirements are
not yet firm and that extensive use of contract employees to augment the
civilian workforce at the shipyards is anticipated. These contract
requirements have not been fully identified and were not included in the 50-
50 report. In commenting on a draft of this report, Navy officials stated
that as soon as contract requirements for shipyard augmentation are
determined, the amounts will be included in the 50- 50 reports.
As we reported last year, the Navy is moving to a regional maintenance
approach, which has made it difficult to identify and report depot- level
work. Initially implemented at Pearl Harbor, this approach combines depot-
level and lower levels of non- depot maintenance, changes funding sources,
and consolidates financial systems. The Navy has not yet developed a system
to discretely track and account for work meeting the definition of depot
maintenance. In its absence, the officials used estimates to report 50- 50
data. While this is a reasonable approach, actual data will likely cause
future estimates to be revised if this program is implemented as planned
throughout the Navy.
The Marines Corps projections for fiscal years 2001- 2005 were based on a
combination of budget formulation figures and straight- line projections.
Headquarters Materiel Command Officials agreed that the reported data do not
fully reflect the planned decrease in total revenues for this period, the
impact of new systems going to the private sector for support, and the
anticipated decrease in the public depot workforce. They did not provide an
estimate to reflect these changes but said actions are underway to improve
future reports.
Page 25 GAO- 02- 95 Depot Maintenance Reporting
In its report, we observed that the Navy and Marine Corps are now projecting
a substantial shift to more private sector workload over the 50- 50
reporting period compared to last year. Comparing the 5 years that the
current 50- 50 reports and last year?s reports have in common (fiscal years
2000- 2004), the Navy is now projecting an additional $2.9 billion in
private sector work and a decrease of $1.1 billion in public sector work.
Whereas in last year?s reports they were projecting private sector
allocations in the 35- to 42- percent range, this year?s reports project a
significantly higher 43- to 46- percent range. Navy officials responsible
for coordinating and reporting the 50- 50 data attributed the increase in
private sector amounts to (1) a sharp increase in the private sector wage
rates, (2) some shifts in ship maintenance from the public to private
sectors to make room for the extensive submarine refueling effort to be
accomplished mainly in the public sector, (3) contracts with private
shipyards, and (4) changes in cost models and estimating baselines.
While DOD has greatly improved the 50- 50 reporting guidance and
implementation, opportunities for improvement still exist. We have noted
improvements in the process each year, particularly with respect to the Air
Force and Army?s use of internal auditors to review data, the Navy?s
development of internal guidance, and OSD?s revisions to its reporting
guidance in response to our recommendations. At the same time, some problems
and concerns persist, including incomplete and inconsistent recordkeeping by
the services and the Navy?s inadequate data validation. While the 50- 50
process and resulting data will never be perfect, there are still
opportunities for DOD to take actions to improve the validity of the process
and the reliability of the data. If implemented, these improvements could
improve the reasonableness of the 50- 50 data as input to the management of
the depot maintenance program to attain future compliance with the 50- 50
requirement.
For this year?s 50- 50 data collection, Army officials added to the already
extensive and detailed internal instructions used to supplement the OSD
guidance. Army officials cited our report findings and their auditor
findings to improve guidance in several areas, including warranties and
contractor logistics support. Also, the Deputy Chief of Staff for Logistics
held two workshops to prepare for the 50- 50 data call and to address our
prior- year findings, OSD?s reporting requirements, as well as the changes
in the Army supplemental instructions. Command individuals responsible for
responding to the data call and coordinating reporting efforts within their
respective commands attended the workshops. Nonetheless, we noted that
guidance and reporting requirements were not always clearly Reporting
Processes
Improved, but Some Problems Remain
Army
Page 26 GAO- 02- 95 Depot Maintenance Reporting
communicated or understood by potential reporting activities, resulting in
some incomplete and missed reporting. The Army?s task in this regard is
challenging in that 14 major commands need to be involved, along with
numerous reporting levels within each command. Nonetheless, improved
communication of the reporting guidance to activities that may not initially
recognize that they have reportable maintenance activities should mitigate
the problem of incomplete and missed reporting in the future.
The Army Audit Agency reviewed the data collection process at command levels
as it was evolving, and problems they identified in the report for fiscal
year 2000 were for the most part corrected before the activity reports were
sent to Army headquarters. The error rate identified by the auditors was
about one- half the rate found last year 7.1 percent for fiscal year 2000
versus 15 percent in fiscal year 1999. For fiscal year 2000, Army auditors
reviewed about $13 billion and identified adjustments of about $92 million.
Auditors attributed the improvement to better guidance, the planning
workshops, and overall management efforts. However, Army auditors put little
emphasis on reviewing the future- year projections. This year?s review of
the future year projections was concerned only with the process and how
reporting organizations were determining projections. The Army auditors did
not review or spot check the amounts projected for individual items or
weapon systems, deciding that a detailed audit was not necessary since they
had done a more thorough analysis of the future process and numbers last
year without identifying significant errors. Nonetheless, we found
significant errors that would likely have been identified by Army auditors
if they had spot- checked projected amounts.
The Air Force supplemented OSD guidance by adding details on contractor and
interim contractor logistics support contracts, partnering, and software
maintenance to its internal instructions. For the fourth consecutive year,
the Air Force Audit Agency assisted Air Force headquarters and Materiel
Command officials in verifying data and validating collection processes,
significantly improving the quality and completeness of data before its
submission to OSD and the Congress.
However, as in the other services, some Air Force offices did not maintain
adequate documentation for reviewing and supporting data. Some offices we
visited could not readily reconstruct estimating methodologies and provide
source documents for their reported data. For example, F- 117 contractor
logistics support costs and F- 15/ F- 16 trainer/ simulator costs were
omitted. Documentation requirements are not only valuable for audit purposes
and management review but also as a method of maintaining Air Force
Page 27 GAO- 02- 95 Depot Maintenance Reporting
historical records that can be used in subsequent years. This is especially
important given the high turnover of staff performing these functions.
In response to our prior findings and those of the Naval Audit Service, Navy
headquarters compiled and distributed a handbook with guidance to supplement
the OSD reporting requirements. This handbook improved the Navy?s process as
it included more detailed data collection procedures, a responsibility
matrix, and a standard reporting format. Some commands also prepared
additional instructions to reporting units. In addition, the headquarters
official responsible for coordinating the Navy?s reports conducted on- site
reviews at several commands and identified some errors that were corrected
before the data was reported to OSD. However, the Navy did not hold a
planning meeting to assemble the key staff involved in the 50- 50 reporting
process from the major commands to discuss and critically analyze procedural
guidance. We have found such meetings to be useful in the Air Force and the
Army in surfacing problems and concerns and helping to ensure a more
consistent approach to data collection.
Furthermore, the Naval Audit Service was not asked to review processes and
validate this year?s 50- 50 data. Last year, auditors found that Navy
guidance, data validation, and documentation lacked the detail to identify,
collect, support, report, and document depot- level maintenance between
public and private sectors. As a result, the Naval Audit Service concluded
that the quality of the data reviewed was inadequate to determine the
accuracy and completeness of the prior submission for fiscal year 1999.
According to audit officials, by not doing a follow- on review, the accuracy
and completeness of the Navy?s 50- 50 data remain suspect.
We encountered similar problems during this review. The Navy?s decentralized
and tiered reporting process rolls up data from numerous subactivities,
consolidating 50- 50 numbers into summary reports with little evidence that
the data were checked and validated while passing through the reporting
layers. In many cases, an audit trail did not exist which was sufficient to
track and document the estimating methodologies and the data used to develop
the individual subactivity 50- 50 submissions that were subsequently rolled
up into a single program or major activity amount. Although the Air Force
and Army also have multi- layered reporting chains, we found their processes
for collecting and verifying information to be generally better, especially
their use of audit agencies to provide an effective third party review of
the data collection process and to correct errors and validate data before
submitting it to OSD and to the Congress. Navy
Page 28 GAO- 02- 95 Depot Maintenance Reporting
Our review this year, as in the past, determined that each of the services
could better maintain auditable records for documenting data collection
methodology, estimating techniques, and final reported results. While some
central records are maintained, information and reporting rationales at
program offices and maintenance activities are sometimes lacking, and it is
difficult for a third party to understand and reconstruct the methodology
and verify results. For example, some Air Force reporting activities had not
kept consolidated records to document their data collection procedures,
estimating methodologies and assumptions, and data sources. In some other
instances, key reporting staff had been transferred and, without adequate
documentation, new staff could not readily explain nor replicate the
results. Also, a Navy major command was in the process of realigning its
units for budget purposes; and neither we nor officials responsible for the
50- 50 effort could always determine which project unit actually provided
the data, the type of depot maintenance being performed, and the class of
ship involved. We also noted that the command had developed special budget
codes to help identify and track depot funding, but that the codes were not
extensively or consistently used. Good records, documentation of processes
followed, and identification of data sources used are important not only for
audit and management oversight but also for use as a historical record that
can be followed by newly assigned staff to assist in data collection and by
programs reporting for the first time.
Expanded guidance and the efforts of service audit agencies have improved
the prior- years 50- 50 report overall, but more so in the Army and the Air
Force. Nonetheless, problems still exist, and this is particularly true in
the Navy, where inadequate management oversight has resulted in continuing
weaknesses in reporting control processes and data validation procedures.
These weaknesses make it difficult to verify the reliability of reported
data. Correcting reporting accuracy problems in all the services is
necessary to provide the Congress and DOD managers assurance that the
requirements of 10 U. S. C. 2466 are being met. Also, inaccurate data hinder
Defense managers in taking timely actions to meet the statutory requirements
and leave the Congress uncertain as to whether legislative requirements are
being met.
The future- years report is not accurate or reasonable and is not currently
a useful tool for guiding DOD actions or informing the Congress about likely
future compliance with section 2466 requirements. The management of the
military services placed much less emphasis on ensuring the accuracy or
reasonableness of the future- years data. Accurate or reasonable projections
are of particular importance for the Air Force, which has now Record-
Keeping
Weaknesses Continue to Be a Problem
Conclusions
Page 29 GAO- 02- 95 Depot Maintenance Reporting
issued two waivers of the limitation on the private sector and is likely to
exceed the 50- percent ceiling in future years. The Army also faces
increasing management challenges in managing its depot maintenance work
within the 50- percent ceiling, but problems with the reliability of the
data and the lack of an effective review of the future- years data and
process by the Army Audit Agency concealed the impact of the results.
Admittedly, projecting the future public- private sector mix is much more
difficult and much less precise than quantifying the results of what has
already occurred. Depot plans and strategies are still evolving with
uncertain impacts on depot workloads. Similarly, repair plans for new and
upgraded systems and other logistics programs and initiatives impacting the
amount and location of depot maintenance services are not fully known. Yet
future- year projections must use the best information available to make the
most reasonable estimates. Such information should include the latest budget
estimates with reasonable adjustments made as needed.
Although DOD and service guidance for both the prior and future- years
reports has been improved over the years, we continue to identify errors,
omissions, and inconsistencies in several reporting categories. These were
caused in large part by insufficient direction and clarification in the
reporting guidance and inadequate management attention. These problem areas
include inactivation activities, contractor logistics support, depot
maintenance at non- depot locations, government- furnished material,
contract general and administrative expenses, incorporation of future repair
costs for new systems, and adjustments for expected execution of programmed
workload. In addition, record- keeping weaknesses hinder audit and
management oversight efforts and do not provide a sound historical record
for facilitating future data collection and reporting efforts. With improved
management oversight and direction and the implementation of the required
corrective actions, the 50- 50 report could become a more useful management
tool for DOD and the Congress in managing the Department?s depot maintenance
program to attain future compliance with the 50- 50 requirement.
To improve 50- 50 data collection, validation, and reporting processes for
prior- years and future years data and thus the reliability and
reasonableness of the reported data, and to improve management direction and
oversight, we recommend that the Secretary of Defense require
the Secretary of the Army (1) identify depot maintenance requirements
associated with the recapitalization program, (2) require that the Army
Recommendations for
Executive Action
Page 30 GAO- 02- 95 Depot Maintenance Reporting
Audit Agency review both prior- years and future- years 50- 50 data, (3)
communicate the reporting requirements to all organizational levels
responsible for reporting data, and (4) finalize and issue guidance
concerning the reporting of depot maintenance at non- depot locations;
the Secretary of the Navy (1) review the management priority accorded the
50- 50 reporting process throughout the command structure, (2) implement
improved management controls and oversight of the processes used by the
individual reporting commands to collect, verify, and report 50- 50 data,
(3) finalize procedures for accurately identifying and reporting depot
maintenance costs at regional and other non- depot locations, (4) prior to
issuing the data call for the 50- 50 reports due in fiscal year 2002, hold a
planning meeting of key officials representing all reporting commands to
discuss and agree upon 50- 50 data collection processes and guidance, and
(5) direct the Naval Audit Service to review 50- 50 processes and data to
validate the data collection processes and results for both the prior- years
and future- years reports;
the Assistant Deputy Under Secretary of Defense for Maintenance Policy,
Programs and Resources expand and clarify its guidance to (1) specify
whether contract general and administrative expenses incurred by government
employees and similar types of costs should be counted as part of the public
or the private sector, and (2) allow for revisions to budgetary estimates to
better reflect known and anticipated changes in workloads, workforce,
priorities, and performance execution rates in order to achieve more
reasonable projections of depot requirements where historical data indicates
that budget data are unrealistic;
the Assistant Deputy Under Secretary of Defense for Maintenance Policy,
Programs and Resources, in conjunction with the secretaries of the military
departments, improve and clarify 50- 50 reporting guidance in problem areas
noted in this report, including inactivation activities, contractor
logistics support, incorporation of future repair costs for new and upgraded
systems in 50- 50 projections, depot- level maintenance performed at non-
depot locations, and inclusion of government- furnished material in contract
repair costs; and
the secretaries of the military departments reemphasize and expand
procedures for maintaining adequate records to document data collection
processes, data sources, and estimating methodologies in order to facilitate
management oversight and audits, as well as provide an historical record
that can be readily used by staff newly assigned to
Page 31 GAO- 02- 95 Depot Maintenance Reporting
the 50- 50 process to annually replicate sound, efficient, and consistent
data collection efforts.
DOD generally concurred with our recommendations. However, it did not concur
with certain parts of two recommendations. The Department?s specific
comments and our evaluation of them are discussed below. Service officials
also offered some technical comments that we incorporated in this report
where appropriate. DOD?s comments are included as appendix I to this report.
The Department did not concur with two parts of our recommendation
addressing Navy 50- 50 issues. First, regarding our recommendation that the
Navy hold a 50- 50 planning meeting, the Navy response said that its new
handbook, frequent contacts between the 50- 50 manager and key reporting
officials, and meetings held internally by reporting organizations
accomplish the same purpose. While we agree that these efforts are important
and should be continued, an initial planning meeting of key representatives
of reporting commands has proven useful in both the Army and the Air Force.
For example, service officials have said that these meetings surfaced
reporting issues up- front and helped ensure more consistency in reporting
processes and results. Thus, we continue to believe the Navy should hold an
initial planning meeting. Second, the Navy disagreed with our recommendation
that the Naval Audit Service review 50- 50 processes and data. The
Department?s response noted that the Navy believes sufficient management
attention has been given to this process and is confident in the integrity
of its data. However, the comments also stated that the Naval Audit Service
will be used should the Navy determine that an audit service review is
necessary. Because of the value added by audit services in the Army and the
Air Force (and by the Navy last year), we continue to believe that the Naval
Audit Service should be used to review 50- 50 processes and data.
Finally, the Department did not concur with one part of our recommendation
regarding clarification of Office of Secretary of Defense 50- 50 guidance to
the services. Specifically, the Department?s response noted that the
counting of contract general and administrative expenses incurred by
government employees is unique to the Air Force and additional departmental
guidance is not necessary. We continue to believe that this issue should be
clarified in the OSD guidance because a substantial amount is involved and
the Air Force continues to make this adjustment every year. Agency Comments
and Our Evaluation
Page 32 GAO- 02- 95 Depot Maintenance Reporting
To determine whether the military departments met the 50- 50 requirement in
the prior- years report, we analyzed each service?s procedures and internal
management controls for collecting and reporting depot maintenance
information for purposes of responding to the section 2466 requirement. We
reviewed supporting details (summary records, accounting reports, budget
submissions, and contract documents) at departmental headquarters, major
commands, and selected maintenance activities. We compared processes to
determine consistency and compliance with legislative provisions, OSD
guidance, and military service instructions. We selected certain programs
and maintenance activities for more detailed review. 10 We particularly
examined reporting categories that DOD personnel and we had identified as
problem areas in current and past reviews; these areas included
interserviced 11 workloads, contractor logistics support, warranties,
software maintenance, and depot maintenance at non- depot locations. We
evaluated processes for collecting and aggregating data to ensure accurate
and complete reporting and to identify errors, omissions, and
inconsistencies. We coordinated our work, shared information, and obtained
results of the Army and Air Force service audit agencies? data validation
efforts.
To determine whether the future- years projections were based on accurate
data, valid assumptions, and existing plans, and represented reasonable
estimates, we followed the same general approach and methodology used to
review the report on the preceding years discussed above. Although the
future- years report is a budget- based projection of expenditures, the
definitions, guidance, organization, and processes used to report future
data are much the same as for the prior- years report of actual obligations.
We discussed with DOD officials the main differences between the two
processes and the manner in which the data were derived from budgets and
planning requirements and key assumptions made in the outyear data.
For reviews of both 50- 50 reports, we performed certain checks and tests,
including variance analyses, to judge the consistency of this information
with data from prior years and with the future- years budgeting and
10 We selected the programs reviewed based on size and importance, leads
obtained from internal auditors, and any previously identified areas of
concern. Given the nature of our sample, the results are not projectible to
the universe of depot maintenance activities. We also did not audit the
integrity of DOD?s financial systems and accounting data used to prepare the
50- 50 reports.
11 Interserviced workload is maintenance that one military service performs
on equipment owned and funded by another service. Scope and
Methodology
Page 33 GAO- 02- 95 Depot Maintenance Reporting
programming data used in DOD?s budget submissions and reports to the
Congress. For example, we compared each service?s 50- 50 data reported in
February and April 2001 for the period 1999 through 2004 with data reported
for these same years in the 50- 50 reports submitted in 2000. We found
repeated and significant changes, even though the estimates were prepared
only about one year apart. This analysis helped us identify large
transcription errors and unreported costs that the Army had made which
resulted in the data reported to Congress erroneously indicating an increase
in the percentage of depot maintenance work assigned to the public sector.
Instead, our corrected data shows the Army allocation percentages staying
rather constant during this period and closer to the 50- percent ceiling.
This analysis also revealed a greater increase in the Navy?s shift to more
private sector workload than had been projected last year. Variance analysis
showed that congressional and DOD decisionmakers were given quite a
different view of the public- private sector workload mix than that
presented just last year. During this review we also used to a great extent
our prior and ongoing audits in such areas as sustainment planning, depot
policies, financial systems and controls, and DOD pilots and initiatives for
increasing contractor involvement in maintenance.
Several factors concerning data validity and completeness were considered in
our methodology and approach to reviewing the prior and future years?
reports. One key factor is the continuing deficiencies GAO has noted in
DOD?s financial systems and reports that preclude a clean opinion on its
financial statements and which results in limited accuracy of budget and
cost information. Another factor is that documenting depot maintenance
workload allocations between the public and private sectors is becoming more
complicated by the consolidation of maintenance activities and performance
of depot- level maintenance at field locations. This (1) makes it more
difficult to identify work that meets the statutory definition of depot
maintenance; (2) complicates workload reporting; and (3) results in
underreporting of depot maintenance for both the public and private sectors.
In addition, many contracts, especially the newer performance- based
contracts, do not separately identify maintenance activities or account
separately for their costs, which can result in underand over- reporting of
depot maintenance work performed in the private sector.
To review DOD efforts to improve the accuracy and completeness of reports,
we discussed with officials managing and coordinating the reporting process
their efforts to address known problem areas and respond to recommendations
by the audit agencies and us. We compared
Page 34 GAO- 02- 95 Depot Maintenance Reporting
this year?s sets of instructions with last year?s to identify changes and
additions. We reviewed efforts to identify reporting sources and to
distribute guidance and taskings. We asked primary data collectors their
opinions on how well efforts were managed and data verified. We asked them
to identify ?pain points? and ideas they had to improve reporting. We
reviewed prior recommendations and service audit agency findings to
determine whether known problem areas were being addressed and resolved.
We interviewed officials, examined documents, and obtained data at OSD,
Army, Navy, and Air Force Headquarters in Washington, D. C.; Army Materiel
Command in Alexandria, Virginia; Naval Sea Systems Command in Arlington,
Virginia; Naval Air Systems Command in Patuxent River, Maryland; Air Force
Materiel Command in Dayton, Ohio; Army Audit Agency in Washington, D. C.;
Air Force Audit Agency in Dayton, Ohio; and several operating activities
under the military departments? materiel commands. We conducted our review
from February to July 2001, in accordance with generally accepted government
auditing standards.
We are sending copies of this report to the Secretary of Defense, the
Secretary of the Air Force, the Secretary of the Army, the Secretary of the
Navy, the Commandant of the Marine Corps, the Director of Office of
Management and Budget, and interested congressional committees. We will make
copies available to others upon request and will post the report to GAO?s
homepage at www. gao. gov. Key contributors to this report are listed in
appendix II.
David R. Warren, Director Defense Capabilities and Management
Appendix I: Comments From the Department of Defense
Page 35 GAO- 02- 95 Depot Maintenance Reporting
Appendix I: Comments From the Department of Defense
Appendix I: Comments From the Department of Defense
Page 36 GAO- 02- 95 Depot Maintenance Reporting
Appendix I: Comments From the Department of Defense
Page 37 GAO- 02- 95 Depot Maintenance Reporting
Appendix I: Comments From the Department of Defense
Page 38 GAO- 02- 95 Depot Maintenance Reporting
Appendix II: GAO Contacts and Staff Acknowledgments
Page 39 GAO- 02- 95 Depot Maintenance Reporting
David R. Warren (202) 512- 8412 Julia C. Denman (202) 512- 4290
In addition to the above contacts, John Brosnan, Raymond Cooksey, Bruce
Fairbairn, Johnetta Gatlin- Brown, Jane Hunt, Steve Hunter, Glenn Knoepfle,
Ron Leporati, Fred Naas, Andy Marek, and Bobby Worrell made contributions to
this report. Appendix II: GAO Contacts and Staff
Acknowledgments GAO Contacts Acknowledgments
Related GAO Products Page 40 GAO- 02- 95 Depot Maintenance Reporting
Defense Maintenance: Sustaining Readiness Support Capabilities Requires a
Comprehensive Plan (GAO- 01- 533T, Mar. 23, 2001)
Depot Maintenance: Key Financial Issues for Consolidations at Pearl Harbor
and Elsewhere Are Still Unresolved (GAO- 01- 19, Jan. 22, 2001).
Depot Maintenance: Action Needed to Avoid Exceeding Ceiling on Contract
Workloads (GAO/ NSIAD- 00- 193, Aug. 24, 2000).
Air Force Depot Maintenance: Budgeting Difficulties and Operational
Inefficiencies (GAO/ AIMD/ NSIAD- 00- 185, Aug. 15, 2000.)
Depot Maintenance: Air Force Waiver to 10 U. S. C. 2466
(GAO/ NSIAD- 00- 152R, May 22, 2000).
Depot Maintenance: Air Force Faces Challenges in Managing to 50- 50 Ceiling
(GAO/ T- NSIAD- 00- 112, Mar. 3, 2000).
Depot Maintenance: Future Year Estimates of Public and Private Workloads Are
Likely to Change (GAO/ NSIAD- 00- 69, Mar. 1, 2000).
Depot Maintenance: Army Report Provides Incomplete Assessment of Depot- type
Capabilities (GAO/ NSIAD- 00- 20, Oct. 15, 1999).
Depot Maintenance: Status of the Navy?s Pearl Harbor Project
(GAO/ NSIAD- 99- 199, Sep. 10, 1999).
Depot Maintenance: Workload Allocation Reporting Improved, but Lingering
Problems Remain (GAO/ NSIAD- 99- 154, July 13, 1999).
Navy Ship Maintenance: Allocation of Ship Maintenance Work in the Norfolk,
Virginia, Area (GAO/ NSIAD- 99- 54, Feb. 24, 1999).
Defense Depot Maintenance: Public and Private Sector Workload Distribution
Reporting Can Be Further Improved (GAO/ NSIAD- 98- 175, July 23, 1998).
Defense Depot Maintenance: DOD Shifting More Workload for New Weapon Systems
to the Private Sector (GAO/ NSIAD- 98- 8, Mar. 31, 1998).
Defense Depot Maintenance: Information on Public and Private Sector Workload
Allocations (GAO/ NSIAD- 98- 41, Jan. 20, 1998). Related GAO Products
Related GAO Products Page 41 GAO- 02- 95 Depot Maintenance Reporting
Outsourcing DOD Logistics: Savings Achievable But Defense Science Board?s
Projections Are Overstated (GAO/ NSIAD- 98- 48, Dec. 8, 1997).
Navy Regional Maintenance: Substantial Opportunities Exist to Build on
Infrastructure Streamlining Progress (GAO/ NSIAD- 98- 4, Nov. 13, 1997).
Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in
Restructuring Its Depot Maintenance Program (GAO/ T- NSIAD- 97- 112, May 1,
1997) and (GAO/ T- NSIAD- 97- 111, Mar. 18, 1997).
Defense Depot Maintenance: DOD?s Policy Report Leaves Future Role of Depot
System Uncertain (GAO/ NSIAD- 96- 165, May 21, 1996).
Defense Depot Maintenance: More Comprehensive and Consistent Workload Data
Needed for Decisionmakers (GAO/ NSIAD- 96- 166, May 21, 1996).
Defense Depot Maintenance: Privatization and the Debate Over the Public-
Private Mix (GAO/ T- NSIAD- 96- 148, Apr. 17, 1996) and (GAO/ T- NSIAD- 96-
146, Apr. 16, 1996).
Depot Maintenance: Issues in Allocating Workload Between the Public and
Private Sectors (GAO/ T- NSIAD- 94- 161, Apr. 12, 1994).
(350048, 350046)
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