    Depot Maintenance: Army Needs Plan to Implement Depot Maintenance
    Report's Recommendations (08-JAN-04, GAO-04-220).

    Each year, the U.S. Army spends about $3 billion on depot-level
    maintenance and repair work for weapons systems and other
    equipment. However, because its data gathering and reporting
    processes have been limited, the Army historically has been
    unable to fully identify how much depotlevel maintenance takes
    place outside its five public depots. As a result, it has not
    been able to determine with precision how well it was meeting
    statutory requirements to limit contracted depot-level
    maintenance work to 50 percent of the program budget. In the
    House report on the Fiscal Year 2001 Defense Authorization Act,
    Congress directed the Army to report on the proliferation of
    depot-level maintenance work at nondepot facilities and asked GAO
    to review that report. GAO examined the extent to which (1) the
    Army's report identifies the amount of depot-level maintenance
    work done outside public depots; (2) the Army can account for its
    depot-level maintenance workload, as required by statute; and (3)
    the corrective actions in the report are likely to address the
    proliferation issue and enhance the Army's reporting.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-04-220
        ACCNO:   A09053
      TITLE:     Depot Maintenance: Army Needs Plan to Implement Depot
    Maintenance Report's Recommendations
         DATE:   01/08/2004
      SUBJECT:   Army facilities
    	     Data integrity
    	     Equipment maintenance
    	     Maintenance costs
    	     Private sector
    	     Reporting requirements
    	     Strategic planning
    	     Work measurement
    	     Army procurement
    	     Noncompliance
    	     Policies and procedures
    	     Underreporting

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    GAO-04-220

    United States General Accounting Office

    GAO

                           Report to Congressional Committees

    January 2004

    DEPOT MAINTENANCE

        Army Needs Plan to Implement Depot Maintenance Report's Recommendations

    GAO-04-220

    Highlights of GAO-04-220, a report to Senate and House Armed Services
    Committees

    Each year, the U.S. Army spends about $3 billion on depot-level
    maintenance and repair work for weapons systems and other equipment.
    However, because its data gathering and reporting processes have been
    limited, the Army historically has been unable to fully identify how much
    depotlevel maintenance takes place outside its five public depots. As a
    result, it has not been able to determine with precision how well it was
    meeting statutory requirements to limit contracted depot-level maintenance
    work to 50 percent of the program budget. In the House report on the
    Fiscal Year 2001 Defense Authorization Act, Congress directed the Army to
    report on the proliferation of depot-level maintenance work at nondepot
    facilities and asked GAO to review that report. GAO examined the extent to
    which (1) the Army's report identifies the amount of depot-level
    maintenance work done outside public depots; (2) the Army can account for
    its depot-level maintenance workload, as required by statute; and (3) the
    corrective actions in the report are likely to address the proliferation
    issue and enhance the Army's reporting.

    GAO recommends that the Secretary of the Army develop an action plan to
    implement the recommendations in the Army's 2003 maintenance proliferation
    report. DOD concurred with GAO's recommendation.

    www.gao.gov/cgi-bin/getrpt?GAO-04-220.

    To view the full product, including the scope and methodology, click on
    the link above. For more information, contact Barry W. Holman at (202)
    512-8412 or holmanb@gao.gov.

    January 2004

    DEPOT MAINTENANCE

    Army Needs Plan to Implement Depot Maintenance Report's Recommendations

    The Army's proliferation report, issued in September 2003, did not fully
    identify the extent of depot-level maintenance work performed outside the
    Army's public depots. The report estimated that the Army underreported its
    fiscal year 2001 $2.7 billion depot-level maintenance program by $188.6
    million but indicated that this was a rough estimate and that further
    analysis is needed. It attributed this underreporting largely to work
    performed in two categories-work that met the criteria for depot-level
    maintenance work but was not reported as such and work at nondepot field
    facilities that involved depot-level maintenance tasks. GAO's prior
    reviews also identified these categories as key contributors to
    underreporting. While the report noted that the Army has an extensive
    maintenance infrastructure with redundant capabilities, it did not address
    the extent of this redundancy.

    The lack of complete information on the extent of depot-level maintenance
    workloads limits the Army's ability to fully account for this work in the
    Department of Defense's (DOD) annual report to Congress on the allocation
    of public- and private-sector depot-level maintenance spending. The 2003
    proliferation report identified key Army limitations, including
    inconsistencies in applying the congressionally mandated definition of
    "depot maintenance," weaknesses in its management information systems, and
    the failure to follow established policies and procedures for authorizing
    depot-level maintenance work at nondepot facilities. GAO's current
    analysis and prior work confirmed that these limitations make it difficult
    for the Army to fully account for its maintenance workload as it moves
    closer to the 50 percent ceiling for work performed by contractors. GAO's
    most recent report on the Army's 50-50 reporting for fiscal year 2002
    showed that, after adjustments for known underreporting, the percentage of
    private-sector work increased to 49 percent.

    If implemented, the 29 recommendations in the 2003 report could enhance
    the Army's ability to report on its 50-50 data and to evaluate the
    proliferation of depot-level maintenance work at nondepot facilities. The
    recommendations, which are consistent with those that GAO has previously
    made, are focused on key problem areas, such as the need for an improved
    understanding about the 50-50 rule and for compliance with reporting
    policies and procedures. Efforts have been undertaken to address some of
    the problem areas. However, the Army has not yet developed an action plan
    that identifies priorities, time frames, roles and responsibilities,
    evaluation criteria, and resources for managing the implementation of the
    recommendations. Until the Army does this, it will be difficult to assess
    to what extent the Army is likely to meet its desired objectives. While
    improvements should be accomplished, the complexity and vastness of the
    Army's maintenance system and continuing questions about such issues as
    the definition of "depot maintenance" and changing maintenance strategies
    could continue to present challenges in fully recording all maintenance
    work that should be captured.

    Contents

      Letter

    Results in Brief
    Background
    Army's 2003 Proliferation Report Did Not Fully Identify Depot-

    Level Maintenance Performed outside Public Depots Army Cannot Provide
    Congress with a Complete Accounting of Its Depot-Level Maintenance Work
    Army Needs Action Plan to Address Proliferation and Reporting

    Issues Conclusions Recommendation Agency Comments and Our Evaluation

                                           1

                                          2 4

                                           9

    14

    19 26 27 27

    Appendix I Scope and Methodology

    Appendix II Army Maintenance Sites

    Appendix III Army Report's Issues and Recommendations

    Appendix IV Comments from the Department of Defense

    Related GAO Products

      Tables

    Table 1: Categories in Which Depot-Level Maintenance Work Was Not
    Identified in Fiscal Year 2001 10 Table 2: Capacity and Capability
    Information on 17 Sites That GAO Visited 32

      Figures

    Figure 1: Army Maintenance Structure 6 Figure 2: Various Army Maintenance
    Facilities 12

    Abbreviations

    DOD Department of Defense GAO General Accounting Office

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
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    separately.

    United States General Accounting Office Washington, DC 20548

    January 8, 2004

    The Honorable John W. Warner
    Chairman
    The Honorable Carl Levin
    Ranking Minority Member
    Committee on Armed Services
    United States Senate

    The Honorable Duncan L. Hunter
    Chairman
    The Honorable Ike Skelton
    Ranking Minority Member
    Committee on Armed Services
    House of Representatives

    Each year the Department of Defense (DOD) submits a report to Congress
    showing that billions of dollars have been spent on depot maintenance and
    repairs for Army weapons systems and support equipment.1 In recent
    years, depot-level maintenance and repair work has expanded from the
    traditional fixed-location public depots to numerous nondepot repair
    facilities in the field. This shifting of depot-level maintenance workload
    to
    field facilities has contributed to uncertainty about the magnitude of
    depot-level maintenance capabilities and the distribution of work between
    public and private facilities. In October 1999, we reported on the Army's
    first congressionally directed report on the proliferation of depot-level
    maintenance activities at nondepot facilities, noting that the Army faced
    a number of continuing challenges in attempting to address the
    fragmentation of depot-level maintenance work and the proliferation of
    depot-level maintenance facilities. We noted that the Army's report did
    not

    1According to 10 U.S.C. 2460, depot maintenance workloads include (1)
    materiel maintenance and repair requiring the overhaul, upgrading, or
    rebuilding of parts, assemblies, or subassemblies and (2) testing and
    reclamation of equipment as necessary, regardless of the source of funds
    or the location where the work is performed. 10 U.S.C. 2466 requires
    annual reports of public- and private-sector expenditures for depot
    maintenance services and stipulates that no more than 50 percent of annual
    depot maintenance funding provided for military departments and defense
    agencies can be used for work accomplished by contractors. These reports
    are generally referred to as "50-50 reports."

    sufficiently identify the extent of depot-level maintenance work performed
    at nondepot facilities.2

    In the House Armed Services Committee's report on the fiscal year 2001
    defense authorization act,3 Congress directed the Secretary of the Army to
    provide a report that identifies the proliferation of depot-level
    maintenance performed outside of the five public depots. The Army formally
    submitted its report in September 2003. The committee's report also
    requested that we provide a review of the Army's report, including an
    assessment of the Army's ability to comply with 10 U.S.C. 2466, which
    governs the distribution of depot-level maintenance funds between public
    and private facilities. Our review addresses the extent to which (1) the
    Army's report identifies the amount of depot-level maintenance work
    performed outside the public depots, (2) the Army can account for its
    depot-level maintenance workload as required by 10 U.S.C. 2466, and (3)
    the corrective actions in the Army report are likely to address the
    proliferation of depot-level maintenance activities and enhance the
    accuracy and completeness of 50-50 reporting.

    To address these objectives, we drew largely from the body of work we have
    done in the past on the Army's depot-level maintenance issues. In
    addition, we interviewed officials at Army headquarters, Army major
    commands, and maintenance facilities at selected field installations to
    gain a better understanding of the implications of the Army report's
    findings and recommendations. A detailed description of our scope and
    methodology is included in appendix I.

    The Army's 2003 report does not fully identify the extent of depot-level
    maintenance work performed at nondepot facilities and, thus, is not fully
    responsive to the mandate's requirement that the Army identify the
    proliferation of these types of facilities. The report's identification of
    proliferation was limited to an estimated $188.6 million that the Army
    might have underreported in its $2.7 billion depot-level maintenance
    program for fiscal year 2001. This amount was said to be a preliminary
    rough estimate that needed further validation and, in our view, is not
    fully

      Results in Brief

    2See U.S. General Accounting Office, Depot Maintenance: Army Report
    Provides Incomplete Assessment of Depot-Type Capabilities, GAO/NSIAD-00-20
    (Washington, D.C.: Oct. 15, 1999).

    3House Report 106-616 (May 12, 2000).

    indicative of all the depot-level maintenance work being done at nondepot
    facilities. The report indicated that this underreporting was largely due
    to the performance of depot-level maintenance tasks by nondepot facilities
    in such areas as (1) programs that did not identify depot-level
    maintenance work tasks but met the criteria for depot-level maintenance
    work and (2) field-level maintenance involving depot-level tasks. From our
    prior work and current analysis, we agree that these two areas are major
    contributors to the Army's underreporting of its depot-level maintenance
    work. Although the report pointed out that the Army has an extensive
    maintenance infrastructure with redundant capabilities and capacities, it
    did not provide any information on the extent of this redundancy or the
    types of maintenance facilities that could be consolidated. Otherwise, the
    Army's report was consistent with our findings in recent years and our
    work for this engagement.

    The lack of complete information on the extent of depot-level maintenance
    work performed in nondepot facilities limits the accuracy and completeness
    of DOD's annual report to Congress on the allocation of depot-level
    maintenance funds between the public and private sectors. In our analysis
    of the Army's 50-50 reporting, we have said that underreporting depot work
    at nondepot facilities is one of the limitations affecting the Army's
    ability to fully account for its depot-level maintenance work. Consistent
    with our prior work in this area, the Army's report identified several key
    factors affecting the Army's ability to precisely capture and report its
    depot-level maintenance data at nondepot facilities. These factors include
    (1) the inconsistent application of the congressionally mandated
    definition of "depot maintenance" and related guidance, (2) weaknesses in
    management information systems for collecting and reporting workload data,
    and (3) the failure to follow established policies and procedures for
    authorizing depot-level work at field-level facilities and outsourcing
    depot-level maintenance workloads. Our current analysis and our prior work
    identify these factors as underlying causes affecting the Army's
    determination that it has complied with the 50-50 depot-funding
    requirement. While neither the Army nor we can precisely quantify the
    extent of depot-level maintenance work that should have been included in
    the 50-50 analysis, this information is key for the Army to effectively
    manage its depot-level maintenance program and for ensuring the accurate
    and complete reporting of where depot-level maintenance is being performed
    as required by the 50-50 legislation. Such data become even more
    significant as the Army moves closer to the ceiling permitted for work
    performed by contractors. For example, the Army's depot-level maintenance
    data for fiscal year 2002 indicated that funding in the private sector for
    depot-level maintenance was below the 50 percent

    limit. However, our adjustments for known errors in reporting increased
    the percentage of private-sector work to 49 percent from the 46.5 percent
    reported by the Army. An increase of more than 1 percent in the use of the
    private sector to perform more depot-level maintenance in the future could
    cause the Army to exceed its statutory limitation and thereby be required
    to seek a national security waiver and notify Congress as provided for in
    10 U.S.C. 2466.

    If fully implemented, the recommendations in the Army's report could
    improve the identification of additional depot-level maintenance work in
    nondepot facilities, resulting in improving the accuracy and completeness
    of the 50-50 reporting. The Army's proliferation report generally
    addressed key problem areas, and the recommendations were consistent with
    recommendations we have made in the past. Efforts have been undertaken to
    address some of the problem areas; however, no action plan to manage the
    implementation has been developed. Evaluating the success of the proposed
    29 recommendations will be difficult until the Army develops an action
    plan with priorities, time frames, responsible organizations, and
    evaluation criteria, and until the resources required have been
    identified. At the same time, while improvements should be accomplished,
    the complexity and vastness of the Army's maintenance system and
    continuing questions about such issues as the definition of "depot
    maintenance" and changing maintenance strategies could continue to present
    challenges in fully recording all depot-level maintenance work that should
    be captured.

    In this report, we are recommending that the Army establish a plan to
    manage the implementation of the recommendations in the depot
    proliferation report. In commenting on a draft of this report, DOD
    concurred with our recommendation, noting that the Army is establishing an
    integrated product team to develop an action plan. The response stated
    that some of the recommendations in the Army's report would require
    modification.

    Background 	The Army uses maintenance capabilities in both the public and
    private sectors to maintain, overhaul, and repair its military weapons
    systems, such as missiles, combat vehicles, tactical vehicles, aircraft,
    and communication and electronic equipment. The level at which maintenance
    work is performed depends largely on authorized capability, worker skills,
    and predefined work requirements. Legislative requirementswhich
    play an important role in managing the allocation of depot-level
    maintenance workmandate that DOD provide Congress with annual
    reports on the

    distribution of funding for depot-level maintenance workloads in the
    public and private sectors.

    The Army assigns maintenance work to four categories-unit support, direct
    support, general support, and depot-level support.4 Unit and direct
    support workloads, which are limited to routine or recurring requirements,
    such as oil changes and the removal and replacement of components, are
    performed at military units in field locations and funded by direct
    appropriations for operations and maintenance.

    General support, which consists of the repair and overhaul of parts and
    assemblies and some end items such as trucks, is generally performed at
    fixed (nonmobile) industrial facilities located on Army posts, camps, and
    stations, and it is funded by direct appropriations for operations and
    maintenance.5 Military personnel, government-employed civilians, or
    contractor employees may perform this maintenance.

    Depot-level support, which includes the overhaul; upgrading; and
    rebuilding of parts, assemblies, and subassemblies; and testing and
    reclamation of equipment, is the most intensive category of maintenance
    and requires the highest level of skilled workers and more sophisticated
    test and plant equipment. It traditionally has been performed by (1)
    government-employed civilians working at government-owned industrial
    facilities under the command and control of the Army Materiel Command
    (currently five public depots) or (2) contractor personnel working in
    contractor owned and operated facilities performing work specified by Army
    Materiel Command-managed maintenance contracts. The Army's five
    government-operated maintenance depots6 are managed within the Army
    Working Capital Fund.7 Contract depot-level maintenance work is not
    managed under the working capital fund.

    4The Army's maintenance structure for aircraft and components has only
    three categories: unit, intermediate, and depot.

    5One key exception is the cost of military personnel involved in this
    category of work, which is accounted for in a separate, centrally managed,
    Military Personnel appropriations account.

    6The five public depots are located at Anniston, Ala.; Corpus Christi,
    Tex.; Chambersburg, Pa.; Texarkana, Tex.; and Tobyhanna, Pa.

    7Using working capital funds, organizations sell goods and services to
    customers on the basis of rates designed to recoup the full cost of
    operations.

    Figure 1: Army Maintenance Structure

    The Army has two categories of depot-level maintenance activities:

    o  	Activities that have been designated and organized by design and
    purpose to primarily perform depot-level maintenance and repair tasks.
    These activities would include the Army Materiel Command's public depots;
    the Army's forward deployed maintenance depots; and contractor depots,
    primarily located at both the national and installation levels.

    o  	Activities below the depot level that have been granted approval to
    perform specific depot-level tasks through a special or one-time
    authorization or that have been designated as a source of repair. These
    activities include Army National Guard Readiness Sustainment Maintenance
    Sites and Aviation Classification Repair Activity Depots, Army Reserve
    Installation Materiel Maintenance Activities, and Army Forces Command
    Contract Maintenance Facilities. These activities are primarily located at
    the installation level, and the work may be done by either government or
    contractor personnel.

    Operations of the Army depots are guided by legislative requirements that
    divide the amount of depot work between the public and private sectors and
    add specificity to how such work is to be defined. For example, 10 U.S.C.
    2464 provides for a government owned and operated core logistics
    capability that is sufficient to ensure an effective and timely response
    to a mobilization or other national emergency. Also, 10 U.S.C. 2466
    generally prohibits the use of more than 50 percent of the funds made
    available in a fiscal year for depot-level maintenance and repair by
    nonfederal personnel.

    In addition, 10 U.S.C. 2460 defines depot-level maintenance to encompass
    material maintenance or repair requiring the overhaul, upgrading, or
    rebuilding of parts, assemblies, or subassemblies and the testing and
    reclamation of equipment, regardless of the source of funds for the
    maintenance or repair or the location where maintenance or repair work is
    performed. Depot-level maintenance also encompasses software maintenance,
    interim contractor support,8 and contractor logistics support9 to the
    extent that work performed in these areas is depot-level maintenance. The
    statute excludes from depot-level maintenance the nuclear refueling of an
    aircraft carrier, the procurement of major modifications or upgrades of
    weapons systems that are designed to improve program performance, and the
    procurement of parts for safety modifications, although the term "depot
    maintenance" does cover the installation of parts for safety
    modifications. Congress has made changes to various depot-level
    maintenance requirements over the years. For example, the 1998 Defense
    Authorization Act established a statutory definition of depot-level
    maintenance and repair and increased DOD's authority to use its
    depot-level maintenance funds for the private sector's performance of the
    work from 40 to 50 percent.10

    On the basis of statutory language defining depot-level maintenance, the
    Office of the Secretary of Defense issues annual guidance to the military
    departments for reporting their public-private workload allocations. The

    8Interim contractor support is designed to be an interim arrangement in
    which a contractor provides depot-level maintenance (and sometimes other
    logistics support) as part of the acquisition strategy for new systems.

    9Contractor logistics support is designed to be a lifetime support concept
    in which a contractor provides most or all elements of logistics support,
    including depot-level maintenance.

    10Pub. L. No. 105-85 (Nov. 18, 1997) sections 355 and 357.

    military departments also issue internal instructions to manage the data
    collection and reporting process tailored to their individual
    organizations and operating environments.

    As we have reported in recent years in examining DOD's compliance with its
    so-called "50-50 requirement" under 10 U.S.C. 2466, all of the military
    departments have continuing data errors and inconsistencies in reporting
    and problems in documenting and independently validating their annual
    reports. We also have recognized the limitations of their financial
    systems, operations, and controls, as well as their continuing inability
    to capture and report the full costs of depot-level maintenance programs.
    Some of our most recent reports on depot-level maintenance issues are
    listed in the Related GAO Products section of this report.

    We previously reported that the Army had not sufficiently identified the
    extent of depot-level maintenance work performed at nondepot facilities in
    its April 14, 1999, report to the House Committee on Armed Services on
    depot proliferation.11 While the Army's report indicated that 40 staff
    years of depot-level maintenance work was performed outside of the formal
    depot system by nondepot maintenance providers operating under specialized
    repair authorities, it also recognized that the figure was likely
    understated for a variety of reasons to include limitations in systems and
    procedures to fully quantify such work. We agreed. We also noted that in
    July 1999 the Army designated its Army Materiel Command as its National
    Maintenance Manager with responsibility for overseeing the Army's
    logistics and maintenance support programs and managing maintenance
    facilities. In doing so, we noted then that while the Army recognized that
    it needed to modify and standardize Army data systems to fully account for
    depot-level maintenance work at all locations, it had not established
    clear action plans, milestones, and funding requirements for doing so.

    Our September 2003 report on DOD's compliance with the 50-50 requirement
    found that the Army's latest reporting on depot-level workloads for fiscal
    years 2001 and 2002 had utilized a new, more centralized financial system
    to collect 50-50 data that corrected some of the transcription errors we
    had found the previous year but that we continued to find errors,
    omissions, and inconsistencies in its data.12

    11See GAO/NSIAD-00-20.

    12See U.S. General Accounting Office, Depot Maintenance: DOD's 50-50
    Reporting Should Be Streamlined, GAO-03-1023 (Washington, D.C.: Sept. 5,
    2003).

      Army's 2003 Proliferation Report Did Not Fully Identify Depot-Level
      Maintenance Performed outside Public Depots

    Moreover, we reported that, as in prior years, the Army underreported
    public- and private-sector depot-level maintenance work at field locations
    as it continues unfinished efforts to consolidate maintenance activities
    and better control the proliferation of depot-level tasks at nondepot
    facilities.

    Although the mandate directed the Army to identify the proliferation of
    depot-level maintenance performed outside the public depots, the Army's
    report on depot-level maintenance proliferation did not fully identify the
    extent of depot-level maintenance work performed at nondepot facilities.
    Instead, the report estimated that depot-level maintenance work valued at
    $188.6 million for fiscal year 2001 was not included in the Army's
    depotlevel maintenance data and that further validation of this amount was
    needed. While this estimate may not be fully indicative of depot-level
    maintenance work being performed outside the public depots, it indicates
    underreporting in this area that is consistent with the observations we
    have made in our prior work. Although the report recognized that the Army
    has redundant capabilities and capacities, it did not provide any
    information on the extent of this redundancy or the extent of maintenance
    activities that could be consolidated. We also have previously reported
    the existence of this problem.13

        Estimate of Work outside Depots Is Incomplete

    While the Army's report provided an estimate of depot-level maintenance
    work that was not appropriately identified as such in fiscal year 2001, it
    acknowledged that the amount was incomplete and needed further validation.
    The report listed seven specific areas where depot-level maintenance work
    performed by nondepot facilities was not identified and estimated this
    amounted to be $188.6 million. As illustrated by table 1, most of the
    unidentified amount occurred in field-level facilities that perform
    depot-level maintenance tasks. According to the report, two categories of
    work accounted for about 75 percent of the $188.6 million. These were
    facilities that performed field-level maintenance under the National
    Maintenance Program14 with embedded depot tasks and those

    13See GAO/NSIAD-00-20.

    14The National Maintenance Program is the Army's ongoing action to
    establish a fully integrated national maintenance requirements process
    that includes all depot-level maintenance requirements, regardless of the
    location of the work in a field facility or a maintenance depot.

    under One-Time Repair authorizations.15 The report pointed out that some
    of the unidentified depot-level maintenance work resulted from a
    misunderstanding between the Army Materiel Command and its subordinate
    commands over which organization would report this type of work.

    Table 1: Categories in Which Depot-Level Maintenance Work Was Not
    Identified in Fiscal Year 2001

                     Category of work not identified Amount Percent

    1. The overhaul, upgrading, and rebuilding of equipment that met the
    definition of depot-level maintenance. $3.3

    2. Reimbursable depot support at the installation level. 22.4 11.9

    3. Maintenance covered by warranty associated with the purchase price of
    equipment. 4.0

    4. Field-level maintenance under the National Maintenance Program with
    embedded depot-level tasks. 75.9 40.2

    5. Contract support at a public depot. 10.4

    6. Maintenance tasks performed under Specialized Repair Authority. 7.6

    7. Maintenance tasks performed under One-Time Repair authorization at
    field-level facilities. 65.0 34.5

                                   Total $188.6 100.0

    Source: U.S. Army's 2003 Proliferation Report.

    The report's identification of unidentified depot-level maintenance work
    performed by nondepot facilities is consistent with our prior reviews of
    the Army's annual 50-50 data. For example, in our most recent report, we
    identified work categories such as unreported one-time repair actions and
    unreported work by commands that did not receive Army reporting guidance,
    which contributed to the Army's inability to fully account for its
    depot-level maintenance work in 2002.16 We noted that, as in past years,
    the Army did not fully identify public- and private-sector depot-level
    maintenance work at field locations as it continued unfinished efforts to
    consolidate maintenance activities and better control the proliferation of
    depot-level tasks at nondepot locations. While neither we nor the Army can
    precisely identify the amount of depot-level maintenance work being

    15One-Time Repair actions are depot repairs that are accomplished at
    nondepot locations following an organization's request and approval to do
    this work on a limited basis.

    16See GAO-03-1023.

    performed in nondepot maintenance facilities, our prior work and the
    Army's latest report suggest that the $188.6 million estimate should not
    be construed as fully representing the amount of depot-level maintenance
    work performed at nondepot facilities.

        Army Has an Extensive Maintenance Infrastructure, but Capacity for Depot
        Maintenance Activities at Nondepot Locations Has Not Been Fully Addressed

    The Army's proliferation report pointed out that the Army's maintenance
    infrastructure has redundant capabilities and capacities that could be
    consolidated and streamlined to be more cost-effective. While the active
    Army, Army National Guard, and Army Reserve operate extensive maintenance
    facilities, some of which have the capability and capacity to perform
    depot-level maintenance work, the report did not provide any data to
    quantify the extent of redundancy or identify any possible candidates for
    consolidation. It did suggest that the Army further study the issue for
    opportunities to streamline its current expansive depot-level maintenance
    infrastructure. Moreover, the Army's full implementation of its National
    Maintenance Programanother report recommendationis also
    intended to address streamlining the Army's maintenance infrastructure.

    While we did not attempt to identify the full extent of this maintenance
    infrastructure as part of this review, our analysis supports the Army
    report's contention that the Army has extensive nondepot facilities, some
    of which have the capability and capacity for depot-level maintenance
    tasks and are performing depot-level maintenance work. At the Army sites
    we visited, we observed maintenance activities involved with all levels of
    maintenance for ground and aviation systems. Similar to the Army's public
    depots, these activities occupied large facilities that included machine
    shops, automobile and heavy-equipment repair shops, paint and body shops,
    and sandblasting areas. The pictures in figure 2 show some contrast and
    similarities in maintenance facilities at depot and nondepot locations.

                     Figure 2: Various Army Maintenance Facilities

    Some of the activities had the capability and capacity for depot-level
    maintenance activities and were performing depot-level maintenance work.
    For example, the Readiness Business Center at Fort Campbell, Kentucky, has
    been authorized to perform depot-level maintenance tasks to repair
    components for tactical wheeled vehicles, radios, and helicopters. Of the
    total $27.1 million maintenance work performed by the Business Center in
    fiscal year 2002, about $4.5 million, or about 17 percent, was identified
    as depot-level maintenance. Also maintenance officials at several
    facilities at Fort Riley, Kansasthree of them operated by the
    National Guard, one by the Fort Riley Directorate of Logistics, one by the
    Forces Command, and one by the Army Reserveestimated that their
    maintenance work for fiscal year 2002 totaled about $58.5 million. The
    National Guard performed about $35 million worth of depot-level
    maintenance in fiscal year 2002 and expects this workload to significantly
    increase. More details on the Army's maintenance infrastructure are
    provided in appendix II.

    We have previously reported on the Army's proliferation of facilities that
    perform depot-level maintenance work and the lack of a strategic plan for
    depots to guide its decisions on this issue. In an October 1999 report, we
    pointed out that the Army's April 1999 study of the proliferation of
    depot-level maintenance activities at nondepot facilities did not
    sufficiently identify the extent of this type work.17 We also highlighted
    that the Army's study, citing inadequate data on the subject of
    proliferation, did not make any recommendations for consolidating
    depot-level maintenance facilities. We noted that a key challenge that the
    Army faced was determining and overseeing the amount of depot-level
    maintenance capabilities controlled by major commands in the active Army
    and the Army National Guard. For various reasons, these commands were
    reluctant to reduce their present capability for performing depot-level
    maintenance workloads. For example, Reserve and National Guard Bureau
    officials said that having local maintenance facilities capable of
    performing some depot-level tasks was a readiness issue in that such
    facilities allowed their units more rapid turnaround time on equipment
    requiring this type of repair.

    In July 2003 we reported that work performed in the Army's public depots
    had declined by 36 percent from fiscal year 1987 through fiscal year 2002,

    17See GAO/NSIAD-00-20.

      Army Cannot Provide Congress with a Complete Accounting of Its Depot-Level
      Maintenance Work

    while the total depot-level maintenance program grew.18 We pointed out
    that future workload projections indicated further decline but that the
    full impact of the Iraq conflict on future depot-level workload was
    largely unknown. Among the host of factors that contributed to this
    decline were (1) DOD's policy for greater reliance on the private sector
    for depot-level support of new weapons systems and major upgrades and (2)
    its increased reliance on the use of regional repair activities and
    private-sector contractors for work that might otherwise be done in the
    depots. We noted that neither DOD nor the Army had a comprehensive and
    current depot-level maintenance strategic plan, which was an essential
    aspect of ensuring future depot efficiency and viability.

    Without complete information on the extent of depot-level maintenance work
    performed in nondepot facilities, DOD's annual report to Congress cannot
    fully account for the allocation of depot-level maintenance funds between
    the public and private sectors. In our analysis of DOD's 50-50 reporting,
    we have said that underreporting depot work in nondepot facilities is one
    of the limitations affecting the Army's ability to fully account for its
    depot-level maintenance work. Consistent with our work in this area, the
    Army's report on proliferation identifies a number of factors that
    preclude the Army from fully capturing and reporting its depot-level
    maintenance data at nondepot facilities. These factors include (1)
    inconsistent application of the congressionally mandated definition of
    "depot maintenance" and related guidance, (2) weaknesses in the management
    information systems for collecting and reporting data, and (3) the failure
    to follow established policies and procedures for authorizing depot-level
    work at field-level facilities and outsourcing work. Our current analysis
    and our prior work identify these factors as underlying causes affecting
    the Army's determination that it has complied with the 50-50 rule.
    Furthermore, these limitations will become more significant as the Army
    approaches the statutory ceiling on the performance of depot-level
    maintenance work by contract.

    18See U.S. General Accounting Office, Depot Maintenance: Key Unresolved
    Issues Affect the Army Depot System's Viability, GAO-03-682 (Washington,
    D.C.: July 7, 2003).

        Underreported Depot-Level Work Performed by Nondepot Maintenance Facilities
        Affects Accuracy of 50-50 Report

    Inconsistent Application of Depot-Level Maintenance Definition and 50-50
    Guidance

    We have reported in the past that by not having complete information on
    the amount of depot-level maintenance work being performed in nondepot
    facilities, DOD cannot provide Congress with an accurate and complete
    report regarding the allocation of depot-level maintenance between the
    public and private sectors as required by 10 U.S.C. 2466. For example, our
    September 2003 report stated that our prior 50-50 reports have documented
    continuing problems and shortcomings in accurately and consistently
    reporting depot-level maintenance accomplished by both public- and
    private-sector sources at nondepot locations.19 For example, one-time
    depot repair actions at unit-level facilities went unreported. Other
    nondepot work was not reported because some commands did not receive 50-50
    instructions and others misapplied the guidance. Contractors performed
    some of this work, and military or civilian government employees performed
    some of it. While neither the Army nor we know the extent of unreported
    work nor the amount performed by public- and private-sector employees, the
    impact effectively limits the accuracy and completeness of DOD's report to
    Congress on the allocation of depot-level maintenance funds between the
    public and private sectors. Additionally, as discussed below, both the
    Army and we have identified three key factors inhibiting the Army's
    ability to accurately and completely report depot-level maintenance work
    performed at nondepot facilities.

    A key factor inhibiting the Army's ability to accurately and completely
    identify all depot-level maintenance work performed in nondepot facilities
    in DOD's 50-50 report is that Army military activities inconsistently
    apply the congressionally mandated definition of "depot maintenance." The
    Army's proliferation report concluded that the congressionally mandated
    definition of depot-level maintenance is not widely known below the major
    command headquarters. In addition, the definition is open to
    interpretation, and the reporting guidance is not always well defined.

    At most of the commands and installations we visited, maintenance
    officials said that, in determining whether a maintenance task is
    depot-level maintenance, they follow the guidance found in the Army's
    Maintenance Allocation Charts; technical manuals; and source,
    maintainability, and recovery codes for reparable components rather than
    apply the congressionally mandated definition. They expressed concerns
    that the congressional definition is not always consistent with this
    guidance, is too broad, and is subject to too much interpretation over

    19See GAO-03-1023.

    what maintenance tasks should be counted as depot-level tasks. For
    example, officials at the National Guard Bureau said that applying the
    definition to repair work performed by direct support and general support
    activities caused uncertainty in that the bureau considered most of the
    work at these levels to be nondepot-level work and to identify what work
    should be considered depot-level work required subjective decisions.
    Officials at the Reserve Command said that, while only maintenance work
    defined by the Army's technical manuals as depot-level work should be
    reported as such, under the expanded definition of depot-level
    maintenance, some work defined as below depot-level could involve
    depot-level tasks such as changing and swapping out engines and
    transmissions for wheeled vehicles. Officials at the installation
    maintenance sites we visited made similar comments.

    In commenting on the proliferation report, the Army Materiel Command said
    that the application of the definition of depot-level maintenance
    contributed to the report's findings that depot-level maintenance tasks at
    nondepot facilities were being underreported. The command added that tasks
    performed by these facilities were not distinguished as depot-level tasks
    in the Army guidance but, in the aggregate, these tasks may be equivalent
    to depot-level maintenance. Finally, the command said that the Army could
    only approximate the extent of work performed at nondepot facilities
    because it currently does not have a system to precisely capture
    information on maintenance work for DOD's 50-50 report.

    In prior reports, we have concluded that the Army had not revised its
    maintenance policies and technical manuals to reflect the expanded
    definition of depot-level maintenance and, as a result, any attempt to
    estimate its extent at local facilities would be misleading.20 We also
    recently reported that some Army commands did not receive 50-50
    instructions and that others misapplied the guidance.21 The Army's 2003
    report indicates that the Army will have to make these changes in its
    maintenance policies and technical manuals. For example, in recognizing
    that the Army had not yet incorporated the expanded definition into its
    policies and procedures for 50-50 reporting, the Army's report suggested
    that the Army (1) provide more explicit guidance for 50-50 reporting to
    help ensure that its commands better understood reporting requirements and
    (2) develop an easy-to-use reference guide to help the commands

    20See GAO/NSIAD-00-20. 21See GAO-03-1023.

    Army's Management Information Systems Are Inadequate

    better determine what maintenance work should be included in the 50-50
    report.

    Inadequate Army management information systems are a second key factor
    inhibiting the Army's ability to fully capture depot-level maintenance
    work performed in nondepot facilities. The Army's problems with its
    management information systems are longstanding. In a December 2000
    report, the Army Logistics Transformation Agency concluded that the Army's
    maintenance environment was characterized by many "stovepipe" information
    systems and application programs that are predominately fed data manually
    by maintainers and operators. It also concluded that a wide range of
    maintenance-related information does not exist, is not adequate, or is not
    accessible. In our prior reviews, we also have reported weaknesses in the
    Army's management information system. For example, in our 1999 report, we
    concluded that deficiencies in management information systems contributed
    to the Army's inability to develop accurate and consistent estimates of
    its depot-level maintenance work.22 In our September 2003 report on DOD's
    compliance with the 50-50 requirement, we found that the Army's latest
    reporting on depot-level workloads for fiscal years 2001 and 2002 had
    utilized a new, more centralized financial system to collect 50-50 data.23
    This new system helped correct some of the transcription errors we had
    found the previous year, but we continued to find errors, omissions, and
    inconsistencies in the Army's data.

    The Army's proliferation report concluded that current management
    information systems for capturing depot-level maintenance work at the
    installation level are inadequate for collecting and reporting 50-50 data.
    According to the report, the systems cannot, among other things, (1)
    archive the data in a readily accessible manner or (2) allow for the
    separate counting of multiple maintenance actions associated with a single
    work order. (A work order may include three different levels of
    maintenance, including depot-level maintenance, but only one maintenance
    code can be assigned to the order.) Also the report pointed out that
    collecting and reporting depot-level maintenance work outside the Army's
    five public depots was a convoluted and manual process.

    22See GAO/NSIAD-00-20. 23See GAO-03-1023.

    Policies and Procedures for Authorizing Work Are Not Always Being Followed

    Another factor inhibiting the accuracy and completeness of the 50-50
    report is that policies and procedures for authorizing depot-level work in
    nondepot facilities are not always followed. The Army's proliferation
    report made the same conclusion and identified several areas where
    reporting officials did not believe that maintenance facilities were
    following policies and procedures for authorizing and reporting depotlevel
    maintenance work. For example, the report noted that maintenance
    facilities at the installation level were undertaking depot-level
    maintenance work without having higher command authorization and that some
    authorized one-time repairs were not being reported. The report also
    concluded that some weapons systems managers were not following current
    DOD and Army guidance in determining sources for providing depot-level
    maintenance support.

    In a prior report related to DOD's process for determining depot-level
    maintenance repair strategies for its new weapons systems and major
    upgrades, we noted that many weapons systems managers, including those in
    the Army, were not following existing guidance regarding such tasks as
    adequately performing required cost comparisons between public and private
    facilities and coordinating maintenance support decisions between
    acquisition and logistics officials.24 We noted that service officials
    attributed these problems, in large part, to weaknesses in guidance, which
    they believed was inadequate, unclear, and sometimes contradictory.

        Limitations More Significant for Future Assessment of 50-50 Compliance

    As the Army moves closer to the statutory ceiling for the funding for
    depot-level maintenance work performed in the private sector, the
    limitations in the Army's ability to precisely capture its depot-level
    maintenance work will become more significant. For fiscal year 2002, the
    Army's reported data ($2.7 billion for the total program) indicated that
    its funding in the private sector for depot-level maintenance remained
    below the 50-percent limit. However, our adjustments for known errors in
    reporting for that year increased the percentage of private-sector work to
    49 percent from the 46.5 percent reported by the Army.25 An increase of
    more than 1 percent in the use of the private sector to perform more
    depot-level maintenance in the future, could cause the Army to exceed its

    24See U.S. General Accounting Office, Defense Depot Maintenance: DOD
    Shifting More Workload for New Weapon Systems to the Private Sector,
    GAO/NSIAD-98-8 (Washington D.C.: Mar. 31, 1998).

    25See GAO-03-1023.

    statutory limitation. Consequently, the Army would be required to seek a
    national security waiver and notify Congress as provided for in 10 U.S.C.
    2466(b).26

    With regard to estimates of future compliance, the Army's report noted
    that the Army might exceed the 50 percent ceiling for contractor support
    by fiscal year 2006. More recently, an official from the Army Materiel
    Command said that, for fiscal years 2002 and 2003, the Army experienced a
    3 to 5 percent increase in its contract requirements for depot-level
    maintenance because increased operational requirements made the public
    depots unable to meet the total demand for depot-level maintenance work.
    She pointed out that, if this trend were to continue, the Army might have
    to seek a waiver from the Secretary of Defense, possibly as early as
    fiscal year 2004, to exceed the 50 percent limitation for work performed
    by the private sector. Another official at the Army Materiel Command said
    that the Army's depot-level maintenance work in 2004 might increase by
    about $2.5 billion because of operational requirements for Army equipment
    deployed in the Middle East. He also said that, in an effort to keep up
    with maintenance demands, the Army's five public depots have used
    extensive overtime, added second work shifts, hired temporary employees,
    and allowed some retirees to return to work. In his view, the public
    depots could not meet the demands of the increased maintenance work and
    the Army would have to use more contractors.

    The Army report's recommendations are focused on key problem areas and are
    consistent with recommendations we have made in the past. If fully
    implemented, the recommendations in the Army's proliferation report could
    improve the identification of additional depot-level maintenance work in
    nondepot facilities, and the accuracy and completeness of 50-50 reporting.
    Efforts have been undertaken to address some of the problem areas;
    however, no action plan to manage the implementation has been developed.
    Evaluating the success of the proposed 29 recommendations will be
    difficult until the Army develops an action plan with priorities, time
    frames, responsible organizations, evaluation criteria, and the resources
    required to implement these recommendations. If actions are not
    implemented in a timely way, the Army will not likely have the

      Army Needs Action Plan to Address Proliferation and Reporting Issues

    2610 U.S.C. 2466(b) provides that the Secretary of Defense may waive the
    50 percent limitation if the Secretary determines that a waiver is
    necessary for reasons of national security and notifies Congress regarding
    the reasons for the waiver.

    comprehensive information that it needs in the near term to comply with
    the 50-50 reporting requirements or to effectively manage the existing
    excess maintenance capabilities and infrastructure. On the other hand, the
    extent of improvements likely to be achieved in the long term is
    uncertain, given previous delays and the significant challenges that the
    Army faces in instituting solutions to ensure the consistent application
    of 50-50 reporting criteria.

        Recommendations Are Focused on Key Problem Areas

    The Army report's recommendations present an array of corrective measures
    that are focused on four key areas in which the Army could better evaluate
    the proliferation of depot-level maintenance facilities and manage its
    depot-level maintenance program. Appendix III lists the 29
    recommendations. Basically, the key areas represent a need for the
    following:

    o  	Improved communication and emphasis for the 50-50 requirement. The 14
    recommendations in this area address improving the 50-50 process. They
    include conducting annual 50-50 workshops, issuing clear guidance for
    50-50 reporting, publicizing information about the depot-level maintenance
    program in professional publications, ensuring that compliance with the
    50-50 rule becomes a priority, and developing an easy-to-use reference
    guide to help reporting activities better identify depot-level maintenance
    work that should be reported.

    o  	Improved management information systems. The three recommendations in
    this area address continuing efforts to develop a single integrated
    management information system capable of capturing and reporting
    depot-level maintenance work at nondepot facilities.

    o  	Enhanced compliance with policies and procedures for depot-level
    maintenance operations. The nine recommendations in this area address
    revising policies to ensure consistency in compliance with all applicable
    legislation, regulations, and policies; developing a policy requiring the
    acquisition of access to system technical data for use by government or
    other contract maintenance activities; and developing and implementing a
    plan for documenting baseline data to compare contractor and public depot
    support costs.

    o  	Develop the National Maintenance Program and consolidate maintenance
    activities. The three recommendations in this area address efforts to
    develop the National Maintenance Program and to conduct further analyses
    to identify opportunities for consolidating depot-level maintenance
    facilities.

    Of the Army proliferation report's 29 recommendations to improve the
    identification and reporting of depot-level maintenance data, 3 were
    specifically directed toward managing the proliferation of depot-level
    maintenance at nondepot facilities. One of the recommendations identified
    the need for additional study and identification.

        Recommendations Consistent with Our Prior Work

    The proliferation report's recommendations are consistent with our prior
    recommendations regarding the Army's proliferation of depot-level
    maintenance facilities and the 50-50 reporting process. For example, in
    September 2003, we recommended that the 50-50 reporting guidance be
    appropriately disseminated to reporting organizations and individuals and
    that staff be properly trained in a timely way to apply the guidance.27 In
    October 1999, we recommended that the Army address the following
    challenges:28

    o  	Improving its management information systems. Our recommendation was
    that the Army identify requisite action items, time frames, and funding
    requirements for improving the Army's information management systems to
    fully identify the magnitude and cost-effectiveness of depot-level
    maintenance work at various locations within the Army.

    o  	Finding opportunities to consolidate maintenance activities. We
    recommended that the Army establish (1) clear time frames and action plans
    for assessing requirements for the various types of depot-level
    maintenance facilities and (2) plans for achieving necessary
    consolidations and reductions of excess capabilities.

    o  	Enhancing the National Maintenance Program. We recommended that the
    Army incorporate the depot-level maintenance capabilities of both active
    and reserve components under the National Maintenance Program and assign
    the national maintenance manager with requisite responsibility and
    authority for depot-level maintenance capabilities in active and reserve
    facilities.

    27See GAO-03-1023. 28See GAO/NSIAD-00-20.

    While we made these recommendations 4 years ago, they continue to be
    essential to addressing the problems of the proliferation of depot-level
    maintenance facilities and inaccuracies in 50-50 reporting.

        Although Some Efforts Are Ongoing, Action Plan Not Yet Developed to Ensure
        Implementation of Recommendations in a Timely Manner

    The Army's 2003 report noted that the Army had taken numerous steps since
    1999 to improve its management of the proliferation of depot-level
    maintenance facilities and its 50-50 data. However, the report pointed out
    that the Army needed to implement the report's recommendations before it
    can claim with complete confidence that it is meeting the 50-50
    requirement. Headquarters officials responsible for the report told us
    that the Army maintenance organizations concurred with the report's
    recommendations. The Army has already begun implementing some of its
    report's recommendations such as holding annual workshops and revising its
    guidance to include the congressional definition of depot-level
    maintenance. However, it has not yet developed an overall action plan for
    managing the implementation of all of the recommendations and, in
    particular, for setting priorities for the more-critical recommendations.

    As the report indicates, corrective actions are essential to improving the
    Army's ability to better manage the proliferation of maintenance
    facilities and capture data for 50-50 reporting. Some of the critical
    recommendations, such as the need to identify opportunities for
    consolidating depot-level maintenance facilities, set up a single
    integrated management information system capable of capturing all
    depot-level maintenance data, and develop a National Maintenance Program
    to better manage depot-level maintenance work have been in process for
    several years. Thus, the identification of specific actions would appear
    necessary to help the Army accomplish the implementation of these
    recommendations more timely. A plan would include (1) the Army's priority
    for implementing the recommendations, (2) the Army organizations
    accountable for implementation, (3) the specific time frames for
    accomplishment, (4) whether the benefits of accomplishment support the
    cost of implementation, (5) the funding required and the source of funds,
    and (6) the criteria to determine the effectiveness of the recommendations
    once they are implemented.

    Officials at the Army Communications-Electronics Command said that
    streamlining maintenance facilities is a good idea, but they do not have
    the tools that would enable the command to fully implement the
    proliferation report's recommendations in this area. They said that
    updating Army Regulation 750-1 (Army Materiel Maintenance Policy) and
    conducting 50-50 workshops were a step in the right direction, but that
    both actions

    need to be more comprehensive in educating field-level personnel on policy
    and requirements. For example, they pointed out that just reiterating the
    congressional definition of depot-level maintenance in Army Regulation
    750-1 did little to add clarity to the definition. Additionally, the last
    two workshops were spent largely on training for the Depot Maintenance
    Operations Planning System, a new system to be used by all Army major
    commands and acquisition managers to capture and report annual 50-50
    workload data. According to these personnel, this system appears extremely
    complex and training should be aimed at those who are actually responsible
    for reporting maintenance data. Officials at the National Guard Bureau
    generally disagreed that the Army report's recommendations will ensure
    accurate 50-50 reporting-especially in view of the apparent disconnect
    between the recommendations and the Army's maintenance transformation
    process, and the Army's plans for moving to two-level maintenance.29

    Army Communications-Electronics Command officials also suggested that, for
    timely and effective implementation, the Army establish a working group of
    representatives with subject matter expertise from all levels within the
    Army to oversee the implementation. Officials at Army headquarters who
    were responsible for the report told us that they did not yet have a
    formal action plan established. They said they were planning to establish
    a working group in December 2003 to review the recommendations and
    determine what actions needed to be taken.

        Long-term Improvements in 50-50 Reporting May Remain Problematic

    As previously discussed the Army has taken steps to improve its
    management of the proliferation of depot-level maintenance facilities
    and its 50-50 reporting. The Army's 2003 report and our analysis
    indicate that some of the key actions related to improving the Army's
    long-standing issues in effectively identifying the proliferation of
    depot-level maintenance facilities and improving its 50-50 reporting
    have been in process for several years. The magnitude of long-term
    improvements likely to be realized remains uncertain, given prior delays
    in
    instituting solutions and the inconsistent understanding and application
    of
    50-50 reporting criteria.

    29The Army plans to reduce the size of its logistics infrastructure by
    combining the current levels of maintenance into two levels: field-level,
    which will be "repair and return to user," and sustainment-level, which
    will be "repair and return to supply."

    During our review, we observed that several actions related to the
    recommendations had been under way for a number of years but that
    completion dates had slipped and funding had become uncertain. For
    example, the recommendation that the Army continue efforts to establish a
    fully integrated national maintenance requirements determination process
    that includes all depot-level maintenance requirements refers to a program
    known as the National Maintenance Program. The Army initiated the program
    in July 1999 and planned to implement it by fiscal year 2004. However,
    full implementation has slipped to fiscal year 2006. Additionally,
    required funding to complete the program is uncertain. Army Materiel
    Command officials said that the program's goal is to centrally coordinate
    and control depot-level maintenance work by developing standards for items
    being repaired at qualified repair sources. They said that (1) the program
    is helping to better identify and manage facilities that perform
    depot-level maintenance outside the public depots; (2) the number of
    maintenance facilities in the program has declined from 60 in fiscal year
    2000 to 45 in fiscal year 2003, and these are expected to further decline
    to 25 in fiscal year 2005 as the Army decides which facilities will be
    qualified to perform depot-level maintenance work; and (3) the command was
    working with other commands to reduce the number of nondepot maintenance
    facilities.

    Full implementation of the National Maintenance Program appears to be a
    key initiative in addressing the proliferation of depot-level maintenance
    facilities. At the same time, our analysis indicates that, although the
    concept of the National Maintenance Program could help improve future
    annual reporting and eliminate some of the current fragmented and
    duplicative depot-level maintenance workload assignments, it is too early
    to assess the program's full impact. The extent to which the program can
    resolve all the problems related to the proliferation and inaccurate and
    incomplete identification of depot-level maintenance work performed in
    nondepot facilities is unclear. The Army's 2003 report noted that the
    Army's schedule for completing the implementation of the National
    Maintenance Program has slipped to fiscal year 2006. During our review, we
    noted that, as of October 2003, the Army had completed standards for only
    737about 18 percentof the 4,148 candidates for the
    program. While an estimated development cost of about $120 million has
    already been spent, the Army is a long way from having the required
    standards that are needed for the program. An Army Materiel Command
    official said that the Army was not planning to provide any additional
    funding for the further development of these standards.

    In a prior report, we observed that, while the program is intended to
    consolidate and distribute overhaul work for components returned to the
    supply system, the evolving management framework will continue to allow
    local maintenance facilities to repair items returned directly to using
    organizations-maintenance-to-maintenance transactions that could meet the
    statutory definition of depot-level maintenance.30 Additionally, the
    program did not include some other depot-level maintenance work. For
    example, it does not address the allocation of depot-level maintenance
    requirements for overhauling, rebuilding, or upgrading major end items
    such as tactical wheeled vehicles that are currently being overhauled in
    field-level maintenance facilities or by contracts managed by field-level
    organizations even though this work meets the statutory definition of
    depot-level maintenance work.

    With regard to resolving deficiencies in management information systems,
    it is uncertain when the required changes that will be capable of
    capturing and reporting depot-level maintenance workloads performed in
    nondepot facilities will be operational. In October 2003, the Army began
    testing the transition of its database for Specialized Repair Authority
    and One-Time Repair authorizations into an automated system referred to as
    the Joint Computer-Aided Acquisition and Logistic Support system.31 The
    Army's 2003 report described this as an interim initiative to capture and
    report on maintenance work performed under these two types of
    authorizations. While this initiative will automate the capturing of this
    work, it will not identify all depot-level maintenance work that may be
    performed in fieldlevel facilities. For example, it will not capture
    depot-level maintenance actions performed on equipment that will be
    returned directly to the user without going through the Army's supply
    system. A single integrated management information system is hoped for
    when the Army's evolving Logistics Modernization Program is fully
    implemented. Testing at the first site, the Tobyhanna Army Depot, is
    ongoing, but problems have occurred. Earlier estimates of completion are
    about 18 to 24 months, but some

    30See GAO/NSIAD-00-20.

    31The Joint Computer-Aided Acquisition and Logistic Support system is a
    multiservice program for developing the infrastructure to logistically
    support weapons systems throughout their life cycle.

    Conclusions

    delays are expected.32 Additionally, to what extent it will resolve all
    the deficiencies in the current systems is uncertain.

    We believe that the Army's implementation of our prior recommendations, as
    well as the recommendations made in the Army's proliferation report, are
    essential to providing the Army with more precise information for crucial
    decisions in the area of the Army's depot-level maintenance
    infrastructure. Their timely and effective implementation depends largely
    on the necessary emphasis from senior Army leadership. If actions are not
    implemented in a timely manner, the Army will unlikely have the
    comprehensive information that it needs to determine the extent of
    proliferation and effectively manage its excess capabilities and the
    infrastructure it has-key data needed for complying with the existing
    reporting statute, identifying excess infrastructure and making
    appropriate consolidations, and making appropriate decisions for an
    additional round of base realignments and closures that has been
    authorized for 2005.

    The Army has not yet developed a plan for implementing the recommendations
    in the Army proliferation report. We believe it is essential that the Army
    have such a plan to help ensure the timely and effective implementation of
    the recommendations. Such a plan would include evaluating the priority for
    implementation and identifying the time frame for implementing the
    recommendations, the responsible organizations, and the criteria for
    measuring the desired results.

    While improvements should be accomplished, the complexity and vastness of
    the Army's maintenance system and continuing questions about such issues
    as the definition of depot-level maintenance and changing maintenance
    strategies could continue to present challenges in fully recording all
    depot-level maintenance work.

    32In July 2002, the Army changed the name of this program from the
    Wholesale Logistics Modernization Program to the Logistics Modernization
    Program. This is a new information system that is intended to help manage
    the Army's supply, maintenance, and transportation functions. Beginning in
    July 2003, the Logistics Modernization Program will replace many of the
    Army's old logistics information systems.

    Recommendation

    Agency Comments and Our Evaluation

    To ensure the timely and effective implementation of the recommendations
    in the Army's 2003 proliferation report to help the Army improve its
    management of maintenance operations, including the proliferation of
    depot-level maintenance facilities, and more precisely capture and report
    depot-level maintenance data, we recommend that the Secretary of the
    Defense direct the Secretary of the Army to establish a specific plan to
    manage the implementation of the 29 recommendations identified in the 2003
    proliferation report. The plan should include the priority and time frames
    for implementation, the responsible organizations for implementing the
    plan, and the criteria for measuring success.

    The Department of Defense provided written comments (see app. IV) on a
    draft of this report. In commenting on the draft, the Office of the Deputy
    Undersecretary of Defense for Logistics and Materiel Readiness concurred
    with our recommendation that the Army establish a plan to manage the
    implementation of the 29 recommendations identified in the 2003 depot
    maintenance proliferation report. The Department noted that the Army is in
    the process of establishing an integrated product team to develop an
    action plan to address the 29 recommendations to include reevaluating the
    validity and modifying the recommendations where appropriate. The
    Department also stated that the Army expects to have an action plan in
    place no later than March 31, 2004. The Department's response noted
    specifically that the recommendation contained in the Army's report
    related to the designation of core work needs to be revised. We recognize
    that some adjustment to the recommendations may be necessary as the
    implementation plan is developed. Whether some recommendations require
    modification for implementation is not as significant for the Army as is
    the need for timely action and follow through to address the issues
    identified in the Army's depot maintenance proliferation report.

    We are sending copies of this report to interested congressional
    committees; the Secretary of Defense; the Secretary of the Army; and the
    Director, Office of Management and Budget. We will make copies available
    to others upon request. In addition, the report will be available at no
    charge on the GAO Web site at http://www.gao.gov.

    If you or your staff have questions regarding this report, please contact
    me at (202) 512-8412 or holmanb@gao.gov or Julia Denman, Assistant
    Director, at (202) 512-4290 or denmanj@gao.gov. Other major contributors
    to this report were Nancy Benco, Wayne Gilliam, and Bobby Worrell.

    Barry W. Holman Director, Defense Capabilities and Management

                           Appendix I: Scope and Methodology

    To answer the Senate and House Committees on Armed Services mandate
    contained in Report of the Committee on Armed Services, House of
    Representatives, Floyd D. Spence National Defense Authorization Act for
    Fiscal Year 2001, we reviewed the Army's Fiscal Year 2002 Study of the
    Proliferation of Depot Maintenance-Type Activities Phase II Report, dated
    July 31, 2003. We interviewed Army officials and analyzed pertinent
    information regarding that report at (1) Army Headquarters in the
    Washington, D.C., area; (2) Headquarters, Army Materiel Command in
    Alexandra, Virginia; (3) three subordinate commands-the Army Aviation and
    Missile Command, Huntsville, Alabama; Communications-Electronics Command,
    Fort Monmouth, New Jersey; and the Tank-automotive and Armaments Command,
    Warren, Michigan; (4) Headquarters, National Guard Bureau, Arlington,
    Virginia; (5) Headquarters, Army Forces Command, Atlanta, Georgia; and (6)
    Headquarters, Army Reserve Command, Atlanta, Georgia. Also, we interviewed
    managers and reviewed pertinent information regarding maintenance
    facilities located at Fort Campbell, Kentucky; Fort McCoy, Wisconsin; Fort
    Riley, Kansas; and Fort Rucker, Alabama. We made extensive use of our
    prior work related to Army depot-level maintenance.

    To determine the extent to which the Army's report identified the total
    amount of depot-level maintenance work performed at nondepot facilities,
    we examined the requirements of section 2466 of title 10, U.S. Code, and
    Army regulatory provisions for 50-50 reporting. We analyzed the report's
    scope and methodology, findings, and disclosure of the amount it
    identified and compared these data with our prior work done on the Army's
    annual 50-50 reporting process. We interviewed the study group manager,
    Army officials, and maintenance managers about the nature of maintenance
    work performed by nondepot facilities and about whether it was being
    reported as required. Because the Army has no central database or readily
    available data, we did not attempt to determine the Army's universe of
    facilities that perform depot-level maintenance.

    To answer whether the Army can accurately account for its depot-level
    maintenance workloads and the key issues that preclude accurate reporting,
    we examined the report's findings to determine what areas were identified
    as contributing problems. We used our prior work on the Army's depot-level
    maintenance program to correlate, compare, and test the consistency of the
    identified problems with the ones we had previously reported. We
    interviewed the study group manager, Army officials, and maintenance
    personnel about the relevancy of the findings and the application to the
    Army's depot-level maintenance operations.

    Appendix I: Scope and Methodology

    To answer whether the corrective actions identified in the Army's report
    are likely to address the proliferation issue and enhance the Army's
    reporting, we examined the recommendations to determine how effectively
    they were linked to the identified problems. We also compared the
    recommendations with those that we had previously made to test for
    consistency. Finally, we discussed the relevancy of the recommendations
    with the study group manager, Army officials, and maintenance
    representatives.

    We conducted our analysis of the Army's report from July through October
    2003 in accordance with generally accepted government auditing standards.

                          Appendix II: Army Maintenance Sites

    The Army operates a number of maintenance facilities and has an extensive
    infrastructure for the maintenance of its military weapons systems and
    support equipment. For example, as we reported in April 2003, the Army
    employs about 10,000 personnel at its five public depots to overhaul,
    repair, and upgrade its ground and air combat systems, subsystems, and
    assemblies.1 The Army also has a vast number of other maintenance
    facilities operated by U.S. government-employed civilians and contractors.
    For example, we reported in October 1999 that the Army had another 102
    maintenance facilities that were potential providers of depot-level
    maintenance services within the continental United States-28 active Army,
    2 Army Reserve, and 72 Army National Guard.2

    In addition, the Army operates maintenance activities that provide
    maintenance below the depot level. For example, as of August 2003, the
    Forces Command reported that it had maintenance facilities at 10
    installations that provide direct support for vehicle maintenance; the
    Army reserve had about 160 maintenance facilities located throughout the
    United States that perform unit, direct, and general maintenance support;
    the National Guard had additional maintenance facilities performing unit
    and direct support maintenance; and Army installations had a number of
    maintenance facilities that perform various levels of maintenance.

    We visited 17 of the Army, Army Reserve, and Army National Guard
    maintenance sites. These 17 sites performed maintenance work valued at
    more than $500 million during fiscal year 2002; employed more than 4,700
    military, civilian, and contractor personnel; and occupied facilities with
    more than 2 million square feet. Table 2 provides summary capacity and
    capability information about the sites.

    1See U.S. General Accounting Office, DOD Civilian Personnel: Improved
    Strategic Planning Needed to Help Ensure Viability of DOD's Civilian
    Workforce, GAO-03-472 (Apr. 30, 2003).

    2See GAO/NSIAD-00-20.

                          Appendix II: Army Maintenance Sites

    Table 2: Capacity and Capability Information on 17 Sites That GAO Visited

                                  Dollars in millions

                                                             Capability to Fiscal
                                                                             year
                                     Government Facility         Fiscal year 2002
                                     and        size in        perform depot 2002
                                                                            depot
                                     contractor                       maintenance
        Installation   Organization       staff square feet           maintenance
                                                                      maintenance
                        Readiness
    Fort Campbell,    Business           308     195,249       $27.1 Yes $4.5a
          Kentucky        Center
                      Forces Command        188       8,000          10.0 No None
                      CMF
                      National Guard         19      14,675            .9 No None
                      UTES
        Fort McCoy,    Reserve IMMA         202     140,000           4.9 Yes .7b
         Wisconsin     Reserve ECS          113     198,656           1.8 No None
                      National Guard         31      92,000           .5 Yes .05b
                      MATES
        Fort Riley,        DOL              112     255,000         12.4 Yes 2.4c
           Kansas     Forces Command         71      53,716           2.1 No None
                      CMF
                      National Guard        142      88,612       14.1 Yes
                      RSMS
                      National Guard         90      75,070        20.9 Yes 20.9d
                      ATEAM
                      National Guard         89     123,000           6.7 Yes .6b
                      MATES
                       Reserve ECS           78      14,040           2.3 No None
        Fort Rucker,       ACLC           3,217     732,224       418.5 Yes 16.8e
          Alabama          DEL               22       3,000           2.5 No None
                          ATSCOM             52      41,000        2.4 Yes
                      National Guard         14      16,664           1.5 No None
                      UTES
                       Reserve ECS           15       4,000            .5 No None

    Sources: Fort Campbell, Kentucky: Readiness Business Center, Forces
    Command CMF, National Guard UTES; Fort McCoy, Wisconsin: Reserve IMMA,
    Reserve ECS, National Guard MATES;
    Fort Riley, Kansas: Forces Command CMF, National Guard RSMS, National
    Guard ATEAM, National Guard MATES, Reserve ECS; and Fort Rucker, Alabama:
    ACLC, DEL, ATSC, National Guard UTES,
    Reserve ECS.

    aData represent National Maintenance Program and Specialized Repair
    Authority.

    bData represent National Maintenance Program.

    cData include National Maintenance Program and One-Time Repairs.

    dData include Specialized Repair Authority.

    eData include National Maintenance Program, Specialized Repair Authority,
    and One-Time Repairs.

    Legend

    ACLC (Aviation Center Logistics Command)This organization, which
    reports to the Aviation and Missile Command, performs all levels of
    aviation maintenance in support of Fort Rucker's flighttraining program. A
    contractor performs this maintenance work.

    ATSCOM (Air Traffic Services Command), a newly formed organization,
    provides worldwide direct, general, and limited depot-level maintenance
    for air traffic control systems. The maintenance data reported represents
    two components-F Company of the 58th Aviation Regiment and the Air Traffic
    Control Activity.

    Appendix II: Army Maintenance Sites

    CSMS (Combined Support Maintenance Shop)Army National Guard
    facilities that provide direct support and general support levels of
    maintenance for National Guard surface equipment (trucks, tanks, etc.).

    DEL (Directorate of Engineering and Logistics)A Fort Rucker
    organization that performs organizational support, direct support, and
    general support for vehicles, construction equipment, and fire-fighting
    equipment. A contractor performs this maintenance work.

    DOL (Directorate of Logistics)Fort Riley organization that
    performs general support maintenance for tanks, trucks, construction
    equipment, small arms, etc. It also provides limited organizational and
    aviation intermediate maintenance. A contractor performs this maintenance
    work.

    Forces Command CMF (Forces Command Contractor Maintenance
    Facility)These maintenance facilities report to Forces Command and
    perform organizational and direct support maintenance on items such as
    trucks, trailers, tracked vehicles, vans, and generators. Contractors
    perform the maintenance work.

    National Guard ATEAM (Advanced Turbine Engine Army
    Maintenance)This Army National Guard facility rebuilds M1A1 tank
    engines. Its work, which is considered depot-level maintenance, is limited
    to National Guard assets.

    National Guard MATES (Maneuver Area Training Equipment Site)Army
    National Guard maintenance facilities that provide unit, direct support,
    and general support maintenance for assigned equipment. These sites are
    established to preposition selected items of equipment and are located at
    or near a training area.

    National Guard RSMS (Readiness Sustainment Maintenance Site)This
    National Guard facility at Fort Riley rebuilds 5-ton cargo trucks and
    trailers. Its work, which is considered depot-level maintenance, is
    generally limited to National Guard assets. Employees of the state of
    Kansas perform the work.

    National Guard UTES (Unit Training and Equipment Site)A National
    Guard facility that stores and performs organizational maintenance on
    tracked and wheeled vehicles for National Guard units within a specific
    geographic area.

    Readiness Business CenterA Fort Campbell organization that
    performs general support maintenance for wheeled vehicles and intermediate
    and limited depot-level maintenance for helicopters. Contractors perform
    the maintenance work.

    Reserve ECS (Equipment Concentration Site)Army Reserve facilities
    that store and maintain selected equipment for Army Reserve units in a
    specific geographic area. The maintenance work is performed by both
    government and contractor employees.

    Reserve IMMA (Army Reserve Installation Materiel Maintenance
    Activity)The facility provides organizational, direct, and general
    support maintenance for tactical vehicles-High Mobility Multipurpose
    Wheeled Vehicles, trucks, trailers-for Army Reserve units located at or
    near Fort McCoy. For the most part, contractor employees perform the
    maintenance work.

    Appendix III: Army Report's Issues and Recommendations

    The Army's Fiscal Year 2002 Study of the Proliferation of Depot
    Maintenance-Type Activities identified 7 issues and made 29
    recommendations for the following improvements to enhance the Army's
    ability to (1) evaluate the proliferation of nondepot facilities that
    perform depot-level maintenance and (2) identify and report on its 50-50
    data. These recommendations were consistent with our prior
    recommendations-noted in referenced GAO products.

    Issue 1: Title 10 Definition of Depot Maintenance and 50-50 Reporting
    Policy Guidance

    Recommendations:

    o  	Post the new Army Regulation 750-1 as soon as possible to the Army
    Publications Agency Web site. Posting the regulation will contribute to
    the education of Army activities on the congressional definition of "depot
    maintenance" and the 50-50 reporting process.

    o  	Continue to conduct annual 50-50 workshops and issue clear guidance
    regarding depot maintenance policies to major commands, program executive
    officers, and program managers.

    o  	Use Headquarters, Department of the Army, senior-level maintenance
    boards to communicate depot maintenance policies.

    o  	Publish depot maintenance information articles in professional
    publications.

    [See also GAO-03-1023; U.S. General Accounting Office, Depot Maintenance:
    Key Unresolved Issues Affect the Army Depot System's Viability, GAO-03-682
    (Washington, D.C.: July 7, 2003); and U.S. General Accounting Office,
    Depot Maintenance: Change in Reporting Practices and Requirements Could
    Enhance Congressional Oversight, GAO-03-16 (Washington, D.C.: Oct. 18,
    2002).]

    Issue 2: Accuracy of Army's Current 50-50 Reports

    Recommendations

    o  	The Army Deputy Chief of Staff (G-4) should ensure that compliance
    with the 50-50 rule becomes an Army priority and that command emphasis is
    applied to correct all reporting problems.

    o  Army G-4 should submit an amended 50-50 report for fiscal year 2002.

    Appendix III: Army Report's Issues and Recommendations

    o  	Army G-4 should include all Army major commands, program executive
    offices, and separate commands in the 50-50 reporting process.

    [See also GAO-03-1023; U.S. General Accounting Office, Depot Maintenance:
    Workload Allocation Reporting Improved, but Lingering Problems Remain,
    GAO/NSIAD-99-154 (Washington, D.C.: July 13, 1999); and U.S. General
    Accounting Office, Depot Maintenance: Management Attention Required to
    Further Improve Workload Allocation Data, GAO-02-95 (Washington D.C.: Nov.
    9, 2001).]

    Issue 3: Specialized Repair Authority and One-Time Repair Workload
    Reporting Requirements

    Recommendations

    o  	Army G-4 should provide applicable major commands with immediate and
    specific guidance to reinforce compliance with current Specialized Repair
    Authority and One-Time Repair policies. Strong emphasis should be placed
    on collecting One-Time Repair data for 50-50 reporting purposes.

    o  	Current policy and procedures regarding the approval and tracking of
    One-Time Repair should be expanded in Army Regulation 750-1.

    o  	Major commands should appoint an installation or local Specialized
    Repair Authority coordinator to ensure that (1) all major command
    facilities at an installation are provided the most current information on
    Specialized Repair Authority and One-Time Repair policies and (2) the
    appropriate Specialized Repair Authority and One-Time Repair production
    data are submitted properly through the installation or local regional
    major command Specialized Repair Authority coordinator to the major
    command headquarters. Similarly, the National Guard Bureau should appoint
    Specialized Repair Authority coordinators for each state, territory, and
    the District of Columbia.

    o  	Army G-4, in coordination with the Army Materiel Command (AMC), should
    direct the Aviation and Missile Command to terminate the existing Aviation
    Repair Authority process and immediately comply with all Headquarters,
    Department of Army, Specialized Repair Authority policies.

    [See also U.S. General Accounting Office, Depot Maintenance: Change in
    Reporting Practices and Requirements Could Enhance Congressional
    Oversight, GAO-03-16 (Washington D.C.: Oct. 18, 2002).]

    Appendix III: Army Report's Issues and Recommendations

    Issue 4: Army G-4 Guidance Regarding Depot Maintenance Reporting
    Procedures

    Recommendations

    o  	Army G-4 should revise the 50-50 standard operating procedures to
    provide the major commands, program executive officers, and program
    managers with more explicit guidance regarding those 50-50 reporting
    requirements that are still causing confusion,

    o  	Army G-4 should coordinate with major commands, program executive
    officers, and program managers to ensure that the standard operating
    procedure revisions are clearly understood and that the 50-50 standard
    operating procedures address the upgrade and modification programs.

    o  	Army G-4 should develop a "decision tree" (an easy-to-use reference
    guide) to better distinguish between those programs that should be and
    should not be reported.

    [See also GAO-02-95 and GAO/NSIAD-99-154.]

    Issue 5: Impact of National Maintenance Program on 50-50 Reporting
    Processes Below Public Depot Level

    Recommendations

    o  	AMC should continue efforts to establish a fully integrated national
    maintenance requirements determination process that includes all depot
    maintenance requirements.

    o  	The Army should complete the implementation of the National
    Maintenance Program by fiscal year 2006 as currently planned.

    o  	The Army should conduct further analyses to identify opportunities for
    consolidating depot-level maintenance activities.

    [See also GAO/NSIAD-00-20.]

    Issue 6: Management Information System Requirements for Improving Current
    Methods of Capturing and Reporting 50-50 Data

    Recommendations

    o  	The Army should develop an integrated management information system
    capable of capturing and reporting depot maintenance workloads below the
    organic depot level. AMC should consider

    Appendix III: Army Report's Issues and Recommendations

    replacing the interim Specialized Repair Authority business
    systemthe combined Joint Computer-Aided Logistics Support
    System/Logistics Integrated Database/Army Electronic Product Support
    Systemswith a single integrated Specialized Repair Authority
    tracking and workload system through the development of the Logistics
    Modernization Program and as the various major command feeder systems are
    either replaced or consolidated by way of the development of the Global
    Combat Support System-Army.

    o  	Army G-4 should query AMC's Logistics Integrated Database monthly to
    ensure that major command activities are using the new Department of the
    Army Pamphlet 738-750 maintenance codes for inputting workload data into
    automated systems to account for Specialized Repair Authority and One-Time
    Repair tasks embedded in maintenance workloads at the installation level.

    o  	Army G-4 should continue to support AMC's efforts to develop a
    Maintenance Contract Database under the National Maintenance Program.

    [See also GAO-02-95 and GAO/NSIAD-00-20.]

    Issue 7: DOD and Army Policies Affecting Army's Ability to Manage the

    Proliferation of Depot Maintenance Activities

    Recommendations

    o  	New weapons systems should be designated as core or non-core up front
    in the system's life cycle at Milestone C (Production and Deployment). The
    system's Logistics Support Plan should be revised accordingly on the basis
    of core depot assessment and presented at Milestone C for approval.

    o  	The Army should adopt a new core depot assessment process for weapons
    systems that have not yet undergone core determination analyses.

    o  	The Army should continue to revise/replace flawed Department of the
    Army policies that apply to the Depot Source of Repair (DSOR) decision
    process. The primary objectives of this effort should be the consistent
    compliance of all applicable legislation, regulations, and policies, and
    to ensure that the organic depots are not excluded from the DSOR decision
    process.

    Appendix III: Army Report's Issues and Recommendations

    o  	The Army should audit/review program executive officer, program
    manager, and AMC activities to ensure that they are following guidance on
    core logistics requirements, weapons system support strategies, and the
    DSOR decision process in accordance with the Assistant Secretary of the
    Army for Acquisition, Logistics, and Technology [ASA (ALT)] memorandum
    dated January 9, 2003, entitled Depot Considerations in Acquisition.

    o  	The ASA (ALT) should develop an Army acquisition policy that requires
    program executive officers and program managers to acquire access to
    system technical data owned by the original equipment manufacturer for use
    by appropriate organic or contractor maintenance facilities during the
    performance of system logistical support.

    o  	The ASA (ALT), Army G-4, and AMC should establish a partnership with
    an approved memorandum of agreement to integrate acquisition weapons
    system requirements with traditional end item and secondary item overhaul
    requirements to (1) assist AMC in maximizing the capabilities of the five
    organic depots to meet core requirements and (2) seek a renewed commitment
    from all parties that the depots will not be excluded from the DSOR
    process without the required analyses being conducted.

    o  	Army G-4, ASA (ALT), and AMC should work closely together to develop
    and implement a plan for documenting baseline data to compare contractor
    costs with organic support costs.

    o  	Army G-4, ASA (ALT), AMC, and AMC's major subordinate commands should
    work closely with Headquarters, Department of the Army ASA (ALT) staff to
    market the depots with the program executive officers and program managers
    at every opportunity.

    o  	Army G-4, ASA (ALT), and AMC should work closely together to explore
    future opportunities to expand the number of public/private partnerships
    as part of the Army's overall industrial base strategy.

    [See also U.S. General Accounting Office, Defense Logistics: Actions
    Needed to Overcome Capability Gaps in the Public Depot System, GAO-02-105
    (Washington, D.C.: Oct. 12, 2001) and U.S. General Accounting Office,
    Defense Depot Maintenance: DOD Shifting More Workload for New Weapon
    Systems to the Private Sector, GAO/NSIAD-98-8 (Washington, D.C.: Mar. 31,
    1998).]

    Appendix IV: Comments from the Department of Defense

    Appendix IV: Comments from the Department of Defense

    Related GAO Products

    Depot Maintenance: DOD's 50-50 Reporting Should Be Streamlined.
    GAO-03-1023. Washington, D.C.: September 15, 2003.

    Depot Maintenance: Key Unresolved Issues Affect the Army Depot System's
    Viability. GAO-03-682. Washington, D.C.: July 7, 2003.

    Department of Defense: Status of Financial Management Weaknesses and
    Progress Toward Reform. GAO-03-931T. Washington, D.C.: June 25, 2003.

    Depot Maintenance: Change in Reporting Practices and Requirements Could
    Enhance Congressional Oversight. GAO-03-16. Washington D.C.: October 18,
    2002.

    Depot Maintenance: Management Attention Needed to Further Improve Workload
    Allocation Data. GAO-02-95. Washington D.C.: November 9, 2001.

    Defense Logistics: Actions Needed to Overcome Capability Gaps in the
    Public Depot System. GAO-02-105. Washington, D.C.: October 12, 2001.

    Defense Maintenance: Sustaining Readiness Support Capabilities Requires a
    Comprehensive Plan. GAO-01-533T. Washington, D.C.; March 23, 2001.

    Depot Maintenance: Key Financial Issues for Consolidations at Pearl Harbor
    and Elsewhere Are Still Unresolved. GAO-01-19. Washington, D.C.: January
    22, 2001.

    Depot Maintenance: Action Needed to Avoid Exceeding Ceiling on Contract
    Workloads. GAO/NSIAD-00-193. Washington, D.C.: August 24, 2000.

    Depot Maintenance: Air Force Waiver to 10 U.S.C. 2466. GAO/NSIAD-00-152R.
    Washington, D.C.: May 22, 2000.

    Depot Maintenance: Air Force Faces Challenges in Managing to 50-50
    Ceiling. GAO/T-NSIAD-00-112. Washington, D.C.: March 3, 2000.

    Depot Maintenance: Future Year Estimates of Public and Private Workloads
    Are Likely to Change. GAO/NSIAD-00-69. Washington, D.C.: March 1, 2000.

    Related GAO Products

    Depot Maintenance: Army Report Provides Incomplete Assessment of
    Depot-Type Capabilities. GAO/NSIAD-00-20. Washington, D.C.: October 15,
    1999.

    Depot Maintenance: Status of the Navy's Pearl Harbor Project.
    GAO/NSIAD-99-199. Washington, D.C.: September 10, 1999.

    Depot Maintenance: Workload Allocation Reporting Improved, but Lingering
    Problems Remain. GAO/NSIAD-99-154. Washington, D.C.: July 13, 1999.

    Navy Ship Maintenance: Allocation of Ship Maintenance Work in the Norfolk,
    Virginia, Area. GAO/NSIAD-99-54. Washington, D.C.: February 24, 1999.

    Defense Depot Maintenance: Public and Private Sector Workload Distribution
    Reporting Can Be Further Improved. GAO/NSIAD-98-175. Washington, D.C.:
    July 23, 1998.

    Defense Depot Maintenance: DOD Shifting More Workload for New Weapon
    Systems to the Private Sector. GAO/NSIAD-98-8. Washington, D.C.: March 31,
    1998.

    Defense Depot Maintenance: Information on Public and Private Sector
    Workload Allocations. GAO/NSIAD-98-41. Washington, D.C.: January 20, 1998.

    Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in
    Restructuring Its Depot Maintenance Program. GAO/T-NSIAD-97-112.
    Washington, D.C.: May 1, 1997. Also, GAO/T-NSIAD-97-111. Washington, D.C.:
    March 18, 1997.

    Defense Depot Maintenance: DOD's Policy Report Leaves Future Role of Depot
    System Uncertain. GAO/NSIAD-96-165. Washington, D.C.: May 21, 1996.

    Defense Depot Maintenance: More Comprehensive and Consistent Workload Data
    Needed for Decisionmakers. GAO/NSIAD-96-166. Washington, D.C.: May 21,
    1996.

    Defense Depot Maintenance: Privatization and the Debate Over the
    Public-Private Mix. GAO/T-NSIAD-96-148. Washington, D.C.:

    Related GAO Products

    April 17, 1996. Also, GAO/T-NSIAD-96-146. Washington, D.C.: April 16,
    1996.

    Depot Maintenance: Issues in Allocating Workload Between the Public and
    Private Sectors. GAO/T-NSIAD-94-161. Washington, D.C.: April 12, 1994.

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