Defense Management: Opportunities Exist to Improve Implementation
of DOD's Long-Term Corrosion Strategy (23-JUN-04, GAO-04-640).	 
                                                                 
Each year, the Department of Defense (DOD) spends an estimated	 
$20 billion to repair the damage to military equipment and	 
infrastructure caused by corrosion. Furthermore, corrosion	 
profoundly impacts military readiness as well as the safety of	 
military personnel. In the Bob Stump National Defense		 
Authorization Act for Fiscal Year 2003, Congress directed that	 
DOD develop a long-term corrosion strategy, including specific	 
requirements, and that GAO assess it. DOD submitted its strategy 
in December 2003. This report assesses the potential of the	 
corrosion strategy (in terms of three elements--resources,	 
performance metrics, and policy guidance) to effectively prevent 
and mitigate corrosion and its effects on military equipment and 
infrastructure. 						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-640 					        
    ACCNO:   A10580						        
  TITLE:     Defense Management: Opportunities Exist to Improve       
Implementation of DOD's Long-Term Corrosion Strategy		 
     DATE:   06/23/2004 
  SUBJECT:   Combat readiness					 
	     Equipment maintenance				 
	     Military budgets					 
	     Military cost control				 
	     Military materiel					 
	     Performance measures				 
	     Property and supply management			 
	     Property damages					 
	     Strategic planning 				 
	     Facility maintenance				 
	     Military facilities				 

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GAO-04-640

United States General Accounting Office

                     GAO Report to Congressional Committees

June 2004

DEFENSE MANAGEMENT

Opportunities Exist to Improve Implementation of DOD's Long-Term Corrosion
                                    Strategy

                                       a

GAO-04-640

Highlights of GAO-04-640, a report to congressional committees

Each year, the Department of Defense (DOD) spends an estimated $20 billion
to repair the damage to military equipment and infrastructure caused by
corrosion. Furthermore, corrosion profoundly impacts military readiness as
well as the safety of military personnel.

In the Bob Stump National Defense Authorization Act for Fiscal Year 2003,
Congress directed that DOD develop a long-term corrosion strategy,
including specific requirements, and that GAO assess it. DOD submitted its
strategy in December 2003. This report assesses the potential of the
corrosion strategy (in terms of three elements-resources, performance
metrics, and policy guidance) to effectively prevent and mitigate
corrosion and its effects on military equipment and infrastructure.

To provide better assurances that the long-term corrosion strategy is
implemented as envisioned by Congress, GAO is recommending that the
Secretary of Defense address certain shortcomings in funding, performance
measures, and policy.

In written comments, DOD agreed with all of these recommendations.
However, GAO emphasized the need to complete the baseline study well
before 2011, institutionalize corrosion project funding, and extend the
review of corrosion prevention plans.

www.gao.gov/cgi-bin/getrpt?GAO-04-640.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact William M. Solis at (202)
512-8365 or [email protected].

June 2004

DEFENSE MANAGEMENT

Opportunities Exist to Improve Implementation of DOD's Long-Term Corrosion
Strategy

While DOD's new long-term corrosion strategy generally addresses the
requirements in the congressional mandate, it falls short of representing
a comprehensive plan needed to implement successfully the strategy and
manage DOD's extensive corrosion problems in the future. An effective,
results-oriented strategy identifies resources required to achieve its
goals and outcome-based performance metrics that can measure progress
toward achieving those goals. Without addressing certain key elements, the
strategy is unlikely to serve as an effective tool in preventing and
mitigating corrosion and its effects on military equipment and
infrastructure. These shortcomings could lead to the loss of billions of
dollars in avoidable maintenance costs and the degradation of safety and
readiness. GAO's review of three key elements showed the following:

o  	Funding and personnel resources-The strategy does not identify the
level of funding and personnel resources needed to implement the corrosion
reduction plan in the near-or long-term. Officials in DOD's corrosion
office said that resource needs are still being determined and firm
estimates should be available in December 2004. However, preliminary
projections made by the corrosion task force indicated that the DOD-wide
corrosion reduction program would require about $1.9 billion for fiscal
years 2004 through 2009. DOD and the services, however, have not included
any funds for fiscal year 2004 and less than 10 percent of the task
force's fiscal year 2005 estimates. While the strategy calls for a
mechanism that ensures sustained, long-term funding, DOD has been using a
year-by-year funding approach.

o  	Performance measures and milestones-While the strategy includes some
performance measures and milestones, they are not the resultsoriented
metrics needed to successfully monitor the program's progress. In
addition, DOD does not plan to complete a critically needed, corrosion
cost baseline study until 2011 because of limited funding. Without
results-oriented metrics and a baseline, DOD will not be in a sound
position to establish cost-effective resource priorities or monitor
progress toward corrosion reduction.

o  	Policy guidance-While the strategy strengthens DOD's policy guidance
on corrosion prevention and mitigation, improvements can be made. The new
guidance establishes a review process for corrosion prevention plans for
major weapon systems programs, such as the Joint Strike Fighter. However,
the guidance does not extend the review to non-major weapons systems and
infrastructure programs, which are under the purview of the military
services. The guidance also does not require the Chairman, Joint Chiefs of
Staff's Focused Logistics Functional Capabilities Review to consider
corrosion prevention planning when it reviews project requirements.

Contents

      Letter                                                                1 
                                    Results in Brief                        2 
                                       Background                           4 
                 Corrosion Strategy Shortcomings May Hinder Successful   
                                     Implementation                         6 
                                       Conclusions                         13 
                          Recommendations for Executive Action             14 
                           Agency Comments and Our Evaluation              15 
    Appendix I                    Scope and Methodology                  
    Appendix II  Comments from the Department of Defense                 

  Table

Table 1: Estimated Funding Needs for Corrosion Prevention Projects for
Fiscal Years 2004 through 2009 by Military Services

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separately.

United States General Accounting Office Washington, DC 20548

June 23, 2004

Congressional Committees

Corrosion and its deteriorating impacts are so extensive that military
equipment and military infrastructure are severely affected. The financial
burdens are also substantial-estimates show that the Department of Defense
(DOD) spends as much as $20 billion a year in direct costs alone to repair
the damage caused by corrosion. Corrosion has equally profound impacts on
the safety and readiness of the military services. For example, as we
recently reported, the Navy suspended carrier operations in March 2002
when one F-14 aircraft crashed because its landing gear collapsed because
of corrosion. Our report also indicated that corrosion-related problems
had degraded the readiness of all of the Army's approximately 2,450 force
modernization helicopters.1

Congress, in the fiscal year 2003 defense authorization act,2 directed the
Secretary of Defense to develop and implement a long-term strategy to
reduce corrosion and the effects of corrosion on the DOD's military
equipment and infrastructure.3 The mandate required that the strategy
include, among other things, policy guidance, performance measures and
milestones, and an assessment of the necessary personnel and funding to
accomplish the long-term strategy. The mandate also required that DOD
include an assessment of these elements for four specific initiatives. The
mandate directed us to monitor the implementation of the long-term
strategy and submit our report to Congress no later than 18 months after
the date of the enactment of the act.

1 U.S. General Accounting Office, Defense Management: Opportunities to
Reduce Corrosion Costs and Increase Readiness, GAO-03-753 (Washington,
D.C.: July 7, 2003).

2 Bob Stump National Defense Authorization Act for Fiscal Year 2003, Pub.
L. 107-314, S: 1067 (Dec. 2, 2002).

3 The act defines corrosion as the deterioration of a material or its
properties due to a reaction of that material with its chemical
environment; it defines military equipment as all weapon systems, weapon
platforms, vehicles, munitions, and the components of such items; and it
defines infrastructure as all buildings, structures, airfields, port
facilities, surface and subterranean utility systems, heating and cooling
systems, fuel tanks, pavements, and bridges.

In July 2003, following the enactment of this legislation, we issued a
report on corrosion costs and readiness issues. In that report, we
recommended, and DOD concurred with those recommendations, that in
crafting an effective strategy, DOD should include a number of key
elements, including clearly defined goals, outcome-oriented objectives,
performance measures, and the level of resources needed to accomplish the
goals and objectives.

DOD submitted its long-term corrosion strategy4 to Congress in December
2003. As agreed with your offices, because so little time has passed since
the strategy was submitted, our assessment focused on the potential of the
overall corrosion strategy in terms of three elements-funding and
personnel resources, performance measures and milestones, and policy
guidance-to effectively prevent and mitigate corrosion and its effects on
military equipment and infrastructure in the long term. We also assessed
these three elements as they relate to the four initiatives specifically
identified in the congressional mandate.

In conducting our review, we monitored the activities of the DOD corrosion
task force set up to develop the long-term strategy and reviewed briefings
and studies associated with its preparation. We met with DOD and military
service officials to obtain their views, documentation, and studies on the
strengths and weaknesses of the new strategy. We also analyzed the
adequacy of the strategy's key elements by comparing them with criteria
established in the Government Performance and Results Act of 19935 and
related internal controls guidance and studies. We conducted our review
between November 2003 and April 2004 in accordance with generally accepted
government auditing standards and determined that the data used in the
report are sufficiently reliable for meeting our purposes. A detailed
description of our scope and methodology is provided in appendix I.

While DOD's new long-term corrosion strategy generally addresses the
requirements identified in the mandate (e.g., policy guidance, performance
measures and milestones, and an assessment of the necessary funding and

4 Department of Defense, Report to Congress, Department of Defense,
Long-Term Strategy to Reduce Corrosion and the Effects of Corrosion on the
Military Equipment and Infrastructure of the Department of Defense
(Washington, D.C.: Dec. 2003).

5 Pub. L. No. 103-62 (1993).

  Results in Brief

personnel), it falls short of representing the comprehensive plan that is
necessary to implement successfully the strategy and manage DOD's
extensive corrosion problems in the future. As we described in our July
2003 report recommendation, a results-oriented comprehensive plan
identifies the level of resources needed to achieve the strategy's goals
and provides outcome-based performance metrics to measure progress toward
achieving the goals. Without fully addressing these key elements, the
strategy is unlikely to serve as an effective management tool in
preventing and mitigating corrosion and its effects on military equipment
and infrastructure. In addition, without an effective strategy, DOD may
lose or delay the opportunity to save billions of dollars in avoidable
maintenance costs for military equipment and infrastructure by not
investing in corrosion-reduction efforts now. Our review of three key
elements showed the following:

o  	Funding and personnel resources-While DOD's corrosion strategy
generally addresses the issue of funding, the strategy does not identify
the specific level of funding and personnel resources that are needed to
implement the long-term strategy, including the four initiatives specified
in the mandate. In developing the strategy, DOD was to provide an
assessment of the funding and personnel necessary to accomplish the
long-term strategy, including the four initiatives. According to officials
in DOD's corrosion office, an estimate of the funding and personnel
resources needed was not included because the requirements are still being
determined, although they said they expect to have these estimates by
December 2004. While DOD did not identify funding and personnel needs in
the strategy, the corrosion task force charged with preparing the strategy
developed a preliminary estimate of funding needs, amounting to a total of
about $1.9 billion for fiscal years 2004 through 2009. However, DOD and
the services have not included any funding estimates for fiscal year 2004
and only $27 million for fiscal year 2005 projects, about 9 percent of the
task force's projected needs. While the strategy calls for a funding
mechanism that will ensure sustained, long-term funding, DOD has thus far
used, and plans to continue using, a year-by-year approach. In terms of
personnel needs, the strategy identified the establishment of a DOD
Corrosion Policy and Oversight Office that would be headed by a director
and be supported by a task force of corrosion professionals from
government and industry.

o  	Performance measures and milestones-While DOD's corrosion strategy
identifies some performance measures and milestones for the four
initiatives, the metrics are not the results-oriented performance measures
needed to implement the strategy successfully. In addition, DOD does not
plan to complete a baseline study that is of critical importance in
measuring progress toward achieving the strategy's goals and objectives

until 2011 because of limited funding. The strategy contains performance
metrics that measure program activities, rather than outcome-based
performance metrics. For example, DOD plans to measure progress by
counting the number of major acquisition programs that have developed
corrosion prevention plans rather than by determining the amount of
savings realized within a specific time frame from corrosion reduction
projects involving Navy aircraft carriers. Without a baseline and
outcomebased performance metrics, DOD will be unable to establish
cost-effective resource priorities and measure-and report on-its progress
toward reducing corrosion and its impacts.

o  	Policy guidance-DOD strengthened its policy guidance on corrosion
prevention and mitigation in the long-term strategy, but improvements can
be made. The new guidance, contained in a policy memorandum6 appended to
the strategy, establishes a review process for corrosionrelated issues for
major weapon systems programs, such as the Joint Strike Fighter. According
to DOD corrosion officials, the guidance does not extend the review
process to non-major weapons systems and infrastructure programs, which
are under the responsibility of the individual military services, in order
that the services can retain flexibility in managing their own programs.
Furthermore, DOD's new corrosion strategy does not include the need for
the Chairman, Joint Chiefs of Staff's Focused Logistics Functional
Capabilities Review Board to consider corrosion prevention planning when
it reviews project requirements. One of the board's responsibilities is to
help ensure that an assessment of the sustainability of weapon systems is
incorporated into Chairman, Joint Chiefs of Staff requirements. While the
strategy provides general policy guidance, it does not specifically
provide guidance for the four initiatives.

To strengthen DOD's corrosion strategy, we are recommending that DOD
provide Congress with the long-term funding and personnel resources needed
for corrosion prevention and mitigation projects. We are also recommending
that DOD complete a departmentwide baseline corrosion study and improve
the strategy's corrosion reduction policy guidance. In commenting on a
draft of this report, DOD agreed with all of the recommendations.

Background 	DOD acquires, operates, and maintains a vast array of physical
assets, ranging from aircraft, ships, and land vehicles to buildings,
ports, and

6 Policy Memorandum dated November 12, 2003, from Acting Under Secretary
of Defense for Acquisition, Technology and Logistics to Secretary of the
Military Departments.

other facilities. Corrosion is an extensive problem that affects these
assets and has an impact on military funding requirements, readiness, and
safety. It is estimated that the direct costs to DOD of corrosion on
military equipment and infrastructure is between $10 billion and $20
billion annually.7

In our prior work, we reported in July 2003 that, although the full impact
of corrosion could not be quantified because of the limited amount of
reliable data that DOD and the military services had available, corrosion
has a substantial impact in terms of cost, readiness, and safety on
military equipment and facilities. Moreover, we found that DOD and the
military services did not have an effective management approach to
mitigate and prevent corrosion. As a result, we recommended, and DOD
concurred, that it should develop a departmentwide strategic plan with
clearly defined goals, measurable outcome-oriented objectives, and
performance measures.

In recognizing the extent of DOD's corrosion problem, Congress enacted
legislation as part of the Bob Stump National Defense Authorization Act
for Fiscal Year 2003 that directed the Secretary of Defense to designate
an officer or organization to be responsible for the prevention and
mitigation of corrosion of military equipment and infrastructure. The
legislation also required the Secretary to develop a long-term strategy to
reduce corrosion and the effects of corrosion on military equipment and
infrastructure, and submit the report to Congress no later than 12 months
after the date of the enactment of the Act.

The mandate required that the strategy include, among other things, policy
guidance, performance measures and milestones, and an assessment of the
necessary personnel and funding to accomplish the long-term strategy. The
mandate also required that DOD include an assessment of these elements for
four specific initiatives. These initiatives are: (1) expansion of the
emphasis on corrosion prevention and mitigation within DOD to include
coverage of infrastructure; (2) application uniformly throughout DOD of
requirements and criteria for the testing and certification of new
corrosion-prevention technologies for equipment and infrastructure with
similar characteristics, similar missions, or similar operating
environments; (3) implementation of programs, including supporting
databases, to ensure that a focused and coordinated approach is taken

7 GAO-03-753.

throughout DOD to collect, review, validate, and distribute information on
proven methods and products that are relevant to the prevention of
corrosion of military equipment and infrastructure; and (4) establishment
of a coordinated research and development program for the prevention and
mitigation of corrosion for new and existing military equipment and
infrastructure that includes a plan to transition new corrosion prevention
technologies into operational systems.

To prepare a strategy, DOD established a corrosion policy and oversight
task force. The task force is located in the Office of the Under Secretary
of Defense for Acquisitions, Technology, and Logistics and reports to the
Principal Deputy Under Secretary for Acquisitions, Technology, and
Logistics. The task force consists of seven working groups responsible for
addressing seven corrosion focus areas: (1) policy and requirements; (2)
impact, metrics, and sustainment; (3) science and technology, (4)
communication and outreach; (5) training and doctrine; (6) facilities; and
(7) specifications or standards and product qualification. According to
DOD officials, these seven areas were identified to address the
congressional concerns that led to the mandate and the issues discussed in
our 2003 report. These officials said that because the key elements of the
mandate (funding and personnel, performance measures and milestones, and
policy guidance) are comprehensive, they each apply one way or another to
the seven focus areas in the strategy.

While the long-term corrosion strategy generally addresses the mandate's
requirements, several shortcomings are likely to hamper the successful
implementation of DOD's long-term corrosion strategy. The strategy (1)
does not identify the level of funding and personnel resources needed to
tackle corrosion problems; (2) does not provide outcome-oriented
performance measures and a baseline study to measure progress; and (3)
strengthens existing policy guidance, but some improvements can be made.
In addition, we recommended in our July 2003 corrosion report, and DOD
concurred with our recommendation, that a long-term strategy should
include elements compatible with the Government Performance and Results
Act of 1993. Among these elements were the level of resources needed to
accomplish the strategy's goals and objectives and performance measures,
such as the expected return on investment and realized net savings of
prevention projects that show progress toward achieving the strategy's
objectives.

  Corrosion Strategy Shortcomings May Hinder Successful Implementation

    Strategy Does Not Identify Specific Funding and Personnel Resources

While DOD's corrosion strategy generally addresses the issue of funding,
it does not include any estimates of the specific dollar amounts that are
needed for its near- or long-term implementation. According to the
strategy, the newly formed Corrosion Policy and Oversight task force will
develop inputs to the Future Years Defense Program based on corrosion
requirements and projects. DOD corrosion officials told us, however, that
funding estimates were not included in the strategy because DOD and the
military services are still in the process of determining the
requirements. The officials said they expect to have firm estimates by
December 2004.

In a separate study during the preparation of the strategy, however, DOD's
corrosion task force developed a preliminary schedule of funding
requirements for corrosion reduction efforts. These estimates projected
that DOD and the military services would need a total of about $1.9
billion in departmentwide corrosion prevention and mitigation resources
for fiscal years 2004 through 2009. DOD corrosion officials said that the
task force's figures represent an initial attempt to estimate DOD's and
the military service's funding needs. Table 1 shows the task force's
estimated funding requirements for corrosion prevention and mitigation
efforts for both military equipment and infrastructure for the period from
fiscal year 2004 through fiscal year 2009.

 Table 1: Estimated Funding Needs for Corrosion Prevention Projects for Fiscal
                  Years 2004 through 2009 by Military Services

                              Dollars in millions

                                  Fiscal year

                 2004 2005 2006 2007 2008 2009 Total by service

Equipment

                   Army 10.0 81.9 82.8 83.8 112.8 155.8 527.1

                Navy/Marines 30.0 58.8 47.5 46.8 43.4 39.8 266.3

                  Air Force 15.4 3.7 24.5 31.2 35.7 38.6 149.1

Facilities

All services 19.0 168.0 177.0 189.0 195.0 183.0 931.0

                Total 74.4 312.4 331.8 350.8 386.9 417.2 1,873.5

Source: Corrosion Policy and Oversight Task Force.

The task force's estimates indicated that the services would need about
$74.4 million in fiscal year 2004 for corrosion prevention and mitigation
projects, but this funding has not been allocated or obligated. The task
force identified 93 projects that had high potential returns on investment
and were ready to be undertaken immediately. These projects included,

for example, the installation of sensors to monitor fuel tanks and pipes
for corrosion and the use of corrosion-inhibiting lubricants for avionics
equipment on military aircraft. Corrosion officials told us that the $74.4
million was not included in DOD's fiscal year 2004 budget request because
the task force developed the estimate too late to be incorporated in the
budget request. Corrosion officials said they hoped to obtain funding that
would become available during fiscal year 2004, but, as of April 2004, DOD
and the services had not allocated or obligated these funds.

The task force also estimated that the services would need about $312
million for equipment and infrastructure corrosion projects in fiscal year
2005. However, DOD's Comptroller officials told us that the services
included only $27 million, less than 10 percent of the projected amount
for departmentwide corrosion prevention and mitigation projects in their
fiscal year 2005 budget request. To fund these projects, DOD Comptroller
officials approved a budget change of $27 million from a special project
designed to counter threats to the Civil Reserve Fleet and other aircraft
to the services' operation and maintenance accounts ($9 million each for
Army and Air Force, $7 million for the Navy, and $2 million for the Marine
Corps). DOD corrosion officials told us that they are using these service
accounts because DOD does not have an account that is dedicated to
departmentwide corrosion reduction. These officials also said that, after
the funds are appropriated, they plan to issue a letter of instruction to
the services requiring them to obtain approval from DOD's corrosion office
for the use of these funds. Of the $27 million, DOD corrosion officials
said they expect to use $24 million for corrosion projects (e.g., for
rinse facilities for the services' helicopters and other aircraft and
temporary shelters for military equipment and vehicles), $2.5 million to
begin a corrosion impact baseline study; and $500,000 for the corrosion
task force's operating expenses. DOD corrosion officials told us that,
while the $27 million falls far short of the amount needed to fully
implement the strategy, it represents the first time that DOD expects to
use funds for corrosion reduction on a departmentwide basis, and it
demonstrates DOD's commitment to augment the funding resources that have
previously been under the purview of the military services.

DOD Comptroller officials told us that, in future fiscal years, corrosion
reduction efforts would likely continue to be funded on a year-to-year
basis by program offsets, such as those used for 2005. They said they
eventually expect that departmentwide funding will no longer be needed as
the military services assume a greater role in funding their own corrosion
reduction projects. Comptroller officials said that the services have the
knowledge and expertise to manage their own corrosion control

projects and, therefore, are in a much better position to identify and
allocate funding for these efforts. However, DOD corrosion officials said
that the services are not in a position of knowing which corrosion
projects have the best potential to provide departmentwide benefits and,
furthermore, that these projects are not well coordinated within and among
the military services.

DOD's corrosion officials said that the corrosion reduction strategy may
continue to be underfunded because of the lack of an effective long term
funding mechanism that would better ensure that corrosion reduction
projects have sustained funding over a period of years. At the present
time, the corrosion prevention program is being supported piecemeal
through budget change proposals or offsets. Corrosion officials told us
that with a long-term funding mechanism dedicated to departmentwide
corrosion prevention and mitigation, the program might be able to secure a
commitment for funding these projects for future years. Such a mechanism
could also fund projects that crosscut the services and that have the
greatest potential for cost savings. Corrosion officials said that they
prefer to have a long-term funding mechanism, such as a program element,
but the DOD Comptroller does not think that this is necessary at this
time.

As we reported in July 2003, the corrosion mitigation program may continue
to be underfunded because DOD and the military services continue to give
corrosion prevention a lower priority than other requirements.8 According
to DOD corrosion officials, corrosion reduction projects must compete with
other operation and maintenance programs. Because DOD and the military
services give higher priority to projects that show immediate results,
they have limited funding for corrosion reduction efforts whose benefits
may not be apparent for many years. Corrosion officials told us that one
of the biggest challenges to getting needed funding is to change DOD and
military service personnel attitudes-from thinking that money spent on
corrosion prevention detracts from other projects to realizing that it
saves money in the long run.

According to DOD corrosion officials, if DOD and the services do not
request more funding for corrosion prevention projects, DOD may lose or
delay the opportunity to realize savings amounting to billions of dollars
in avoidable maintenance costs for military equipment and facilities now
and

8 GAO-03-753.

in the future. According to corrosion officials, the average potential
return on investment for a corrosion prevention project is about 10 to 1,
with some projects showing a return as high as 80 to 1, and with the
savings realized about 5 years after funding begins. DOD corrosion
officials said that this means, for example, that if DOD invests $500
million in a corrosion project today, it could realize a potential savings
of about $4.5 billion 5 years from now.

In terms of personnel resources, the strategy generally provided an
assessment of the personnel necessary to manage the corrosion program
effectively in DOD and the services, but the strategy did not identify the
level of personnel resources needed to implement the strategy. The
strategy noted the establishment of an Office of Corrosion Policy and
Oversight that is responsible for developing and implementing the
corrosion strategy and specified that the office would have a director.
DOD corrosion officials told us the office also includes a deputy director
and engineer and that these positions are temporary. The strategy also
indicated that a corrosion prevention and control working group,
consisting primarily of corrosion professionals from DOD, would provide
support for the corrosion office. DOD corrosion officials said these
individuals are not permanently assigned to the office but serve on a
parttime basis. These officials added that, because the strategy was
recently established, DOD and the military services have had little time
to determine the number of personnel needed to implement it. These
officials told us that the requirements would likely be minimal and they
expect to have a firmer estimate by December 2004.

The strategy does not identify the specific amount of funding or personnel
needed to move ahead with the four initiatives specified in the
congressional mandate. While the strategy includes descriptions of
military equipment and facilities projects that address in varying ways
these four areas, it states that these projects require an assessment of
funding and other resources needed to support them. DOD corrosion
officials told us that they plan to systematically evaluate each project
and that this assessment will include determining the resources needed to
implement the effort.

    Lack of Outcome-Based Performance Measures and Baseline Study Hamper
    Tracking Progress and Setting Priorities

While DOD's corrosion strategy includes performance measures and
milestones, they are not the outcome-oriented metrics that are needed to
successfully monitor the department's progress in mitigating corrosion and
its impacts. Instead, the strategy contains output-oriented metrics that
measure the number of program activities. For example, DOD plans to
measure progress toward achieving the strategy's goals by counting the
number of major acquisition programs that have developed corrosion
prevention plans, tracking the number of injury-related incidents related
to corroding equipment or facilities, and recording the number of
maintenance personnel enrolled in corrosion-mitigation training modules.
By contrast, an outcome-oriented performance metric would allow DOD to
determine how much corrosion-prevention projects have reduced the amount
of maintenance costs for Navy aircraft carriers, decreased the failure
rates for the Army's 155 millimeter medium-towed howitzer, or decreased
Air Force Base fuel pipeline ruptures-all within a certain timeframe.

In addition, the development of meaningful performance metrics will be
hampered until a baseline study of the costs and the extent of corrosion
problems departmentwide is completed. In our July 2003 report, we
indicated that the lack of reliable data made it difficult to adequately
assess the overall impact of the corrosion problem. A baseline study would
identify the cost of corrosion on military equipment and facilities across
the services as well as corrosion's impact on military personnel safety
and operational readiness. Such a study would document where corrosion
problems exist, identify their causes, and prioritize them according to
their relative severity.

However, while the long-term strategy acknowledges the critical importance
of developing a baseline of corrosion costs, including those related to
safety and readiness, DOD does not plan to complete such a baseline until
2011. DOD corrosion officials told us they plan to allocate $2.5 million
of the $27 million provided for fiscal year 2005 corrosionrelated projects
to begin such a study. DOD corrosion officials told us that the task force
estimated that it would take an additional $1.25 million for each of the
next 6 fiscal years (2006 through 2011) to complete the study, for a total
cost of $10 million. They said that it would take that long primarily
because of the limited funding available for the strategy, which has
forced them to stretch out funding for the baseline over a period of
several years. The officials also said that the study would take some time
to complete because of data reliability issues, the lack of consistency in
corrosion data within and among the military services, and the
incompatibility of information systems that contain the data.

Without a corrosion baseline, DOD will not be able to develop adequate
performance metrics to measure-or report on-its initial progress toward
reducing corrosion and its impacts. Furthermore, DOD will not have an
overall picture of the extent of corrosion problems, making it difficult
to effectively identify areas that are most severely impacted by corrosion
and that require high-priority attention and resources.

While DOD's corrosion strategy includes some performance measures and
milestones for the four initiatives, the metrics are not the
results-oriented performance measures needed to successfully implement the
strategy.

    Strategy Strengthens DOD's Corrosion Mitigation Policy Guidance but Could Be
    Improved

As part of the long-term corrosion strategy, DOD strengthened its policy
guidance for corrosion prevention and control activities, but there are
opportunities to build on these improvements. The new guidance explicitly
calls for the consideration of corrosion prevention and control planning
during the earliest stages of the acquisition process for military weapon
systems and military infrastructure programs; earlier guidance did not
single out the need for such planning. DOD also included the need to
consider corrosion prevention and control in an existing guidebook 9 for
weapons systems program managers.

While the strategy contains a policy memorandum10 that sets up a review
process for corrosion-related issues for major weapon systems programs
(e.g., Joint Strike Fighter), it does not extend this review to non-major
weapon systems (e.g., Torpedo Defense System Program) and infrastructure
programs. The guidance directs the corrosion prevention and control
working group to regularly review the adequacy of corrosion prevention
plans of all weapon system programs subject to Defense Acquisition Board
review. If they identify an issue, the product group will bring it to the
attention of the board. Furthermore, the policy memorandum states that the
Acting Undersecretary of Defense for Acquisitions, Technology, and
Logistics will personally evaluate the corrosion plans for programs
subject to board review. According to DOD corrosion officials, the
guidance did not extend this review to the

9 Office of the Under Secretary of Defense for Acquisition, Technology,
and Logistics, Designing and Assessing Supportability in DOD Weapons
Systems Guidebook

(Washington, D.C.: Oct. 24, 2003).

10 Policy Memorandum dated November 12, 2003, from Acting Under Secretary
of Defense for Acquisition, Technology, and Logistics to Secretary of the
Military Departments.

non-major weapons programs, which are under the responsibility of
individual military services. The corrosion officials said this was done
so that the services could retain flexibility in managing their own
programs. Military service officials told us that they have not
established a corrosion prevention plan review process for their programs
because the policy memorandum is relatively new, and they prefer to wait
to see how the process works before they establish a similar review
process. However, these service officials and DOD officials said that they
recognize that all programs, both major and non-major weapon systems and
infrastructure, experience significant corrosion impacts and that all of
their corrosion prevention plans would benefit from a review process.

In addition, DOD's new corrosion strategy does not include any corrosion
planning or review requirements for the Chairman, Joint Chiefs of Staff's
Focused Logistics Capabilities Board. However, Joint Chiefs of Staff
officials said they will include corrosion prevention planning in the
board's sustainability assessments of military weapon systems. DOD
corrosion officials told us that this effort by the Joint Chiefs of Staff
would support the strategy and enhance DOD's overall corrosion reduction
programs.

While the strategy provides general policy guidance, it does not
specifically provide policy guidance for the four initiatives.

By focusing attention on the extensive and costly problem of corrosion and
its debilitating impact on military equipment and facilities, DOD's new
long-term corrosion strategy is a step in the right direction. However,
because the strategy falls short of providing the basic elements of an
effective management plan, DOD's ability to implement it successfully
remains at risk. Because of the strategy's limited assessment of funding
and personnel needs, lack of a baseline study, and weak performance
measures, it is not certain that DOD's corrosion prevention and mitigation
efforts will be adequately funded, monitored, or thoroughly evaluated.
Without a sufficient assessment of the funding and personnel resources
required to reduce the effects of corrosion, Congress does not have the
information it needs to make informed, corrosion-related funding decisions
in the future. In addition, if DOD and the services do not adequately fund
corrosion prevention efforts in the near term, they will lose or delay the
opportunity to realize billions of dollars in avoidable maintenance costs
over the long term. They will also face increasing degradation in the
safety and readiness of military equipment and personnel. Furthermore,
without establishing a departmentwide corrosion baseline, DOD cannot
reliably estimate its overall resource needs,

  Conclusions

determine which ones have the highest priority, and track and measure its
progress toward meeting these needs. Moreover, without good
resultsoriented performance metrics, DOD cannot adequately measure its
progress in reducing the impact of corrosion. Finally, without expanding
its policy guidance to require a review of all corrosion prevention
planning, DOD will not be able to ensure that all new programs and
activities-including non-major weapon systems and infrastructure-are
thoroughly evaluated. As a result, some acquisition and construction
programs could slip by without effective planning to prevent and control
corrosion. In addition, DOD will miss an opportunity to strengthen its
efforts to reduce the impact of corrosion on all new acquisitions and
facilities in the future. Without fully addressing the strategy's
weaknesses, the effects of corrosion will continue to exact a tremendous
toll on the financial and operational condition of the military.

Recommendations for 	To provide better assurances that the Department of
Defense's long-term corrosion strategy is successfully implemented as
envisioned by Congress,

Executive Action	we are making five recommendations. We are recommending
that the Secretary of Defense instruct the Undersecretary of Defense for
Acquisition, Technology and Logistics, in consultation with the DOD
Comptroller, take the following actions:

o  	Establish a date to complete the corrosion baseline study well before
its original estimated completion date of 2011 in order that
cost-effective resource priorities and results-oriented performance
measures can be established to monitor progress in reducing corrosion and
its impacts on equipment and infrastructure;

o  	Establish a funding mechanism to implement the corrosion strategy that
would be consistent with the strategy's long-term focus; and

o  	Submit to Congress, as part of the fiscal year 2006 budget submission,
a report identifying the long-term funding and personnel resources needed
to implement the strategy, a status report of corrosion reduction projects
funded in fiscal year 2005, and the status of a baseline study.

In addition, we recommend that the Secretaries of the military services
establish policy guidance that would include the review of the corrosion
prevention and control plans of non-major weapons systems and
infrastructure programs.

Finally, we recommend that the Chairman, Joint Chiefs of Staff direct the
Focused Logistics Capabilities Board to include corrosion prevention
issues in its sustainability assessments of military weapon systems.

  Agency Comments
  and Our Evaluation

In commenting on a draft of this report, the Director of Defense
Procurement and Acquisitions Policy concurred with all five of our
recommendations. The comments are included in appendix II of this report.

In concurring with our recommendation to complete a corrosion baseline
study as soon as possible, DOD noted that, as part of the long-term
strategic plan, it would continue its efforts to evaluate corrosion costs.
However, DOD did not indicate when it would complete the overall,
departmentwide baseline study of corrosion costs that we believe is
essential for establishing cost-effective resource priorities and tracking
progress towards reducing corrosion and its impacts on equipment and
infrastructure. We continue to believe that this baseline study should be
completed as soon as possible. Therefore, we have modified our
recommendation to be more specific and stated that DOD should establish a
date to complete the corrosion baseline study well before its original
estimated completion date of 2011.

In concurring with our recommendation to establish a funding mechanism to
implement the corrosion strategy that would be consistent with the
strategy's long-term focus, DOD stated that the corrosion office would
submit funding requests through the Planning, Programming, Budgeting, and
Execution process. In addition, DOD noted that funding requests for
corrosion prevention would compete for funds with other DOD programs based
on need priorities and fiscal constraints. Although DOD did not provide
specific details, we would expect that funding requests for corrosion
would be made during the budget submission process and be included in
DOD's submission to Congress rather than be made through budget change
proposals or offsets after funds are obligated. We would also expect that
corrosion prevention funding estimates would be included in the Future
Years Defense Program. Unless DOD adopts these types of approaches,
corrosion prevention funding will continue to receive a lower priority
than other DOD efforts, and as a result, DOD will lose the opportunity to
save billions of dollars in avoidable maintenance costs and to improve the
safety and readiness of military equipment and infrastructure.

In concurring with our recommendation that the Secretaries of the military
services establish policy guidance calling for reviews of corrosion
prevention and control plans of non-major weapons systems and
infrastructure programs, DOD indicated that it would encourage the
Secretaries to implement such reviews. DOD also stated that non-major
programs are reviewed subject to the requirements of different acquisition

authorities within the military services. We do not believe that DOD's
comments are fully responsive to our recommendation. We continue to
believe that non-major weapons systems experience corrosion problems
similar to those experienced by major weapons systems and that they would
benefit from the same kind of corrosion prevention plan review. Our
recommendation also applies to infrastructure programs that are primarily
managed by the military services. We recognize that the authority to
manage the activities of non-major weapons systems and infrastructure
programs lies, for the most part, with the military services and that is
why our recommendation is directed to the Secretaries of the services. As
a result, we would expect the Secretaries to implement the recommendation
by establishing policy guidance appropriate to their respective services.

We are sending copies of this report to the Secretary of Defense; the
Director, Office of Management and Budget; and other interested
congressional committees. We will also 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.

Please contact me on (202) 512-8365 if you or your staff have any
questions concerning this report. Key contributors to this report were
Lawson Gist, Jr., Allen Westheimer, Hector Wong, Nancy Benco, and
Katherine Lenane.

William M. Solis, Director
Defense Capabilities and Management

List of Congressional Committees

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

The Honorable Ted Stevens
Chairman
The Honorable Daniel K. Inouye
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate

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

The Honorable Jerry Lewis
Chairman
The Honorable John P. Murtha
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives

                       Appendix I: Scope and Methodology

To assess each of the three key areas of the report, we held numerous
discussions with officials of DOD's Corrosion Policy and Oversight task
force and reviewed relevant DOD documents, including the final strategy
report to Congress. Furthermore, to determine the adequacy of each key
area, we applied internal control tools and results-oriented performance
standards that are necessary components for successful management
activities in departments and, by extension, individual programs.

To assess whether the DOD's corrosion strategy identified and obtained
resources to prevent and mitigate corrosion on equipment and
infrastructure, we reviewed funding requirements and cost estimates for
DOD and the military services and spoke to DOD officials about unfunded
corrosion prevention project requirements, the identification of funding
resources, and future-year funding requirements. We also reviewed the
unfunded service requirements list and the fiscal year 2004 corrosion
prevention projects list. We interviewed DOD Comptroller officials and
discussed the fiscal year 2005 budget request and the prospect for future
years funding. We also discussed our review of DOD's Program Budget
Directive document to understand why the task force did not have its own
budgeted account.

To determine whether the strategy's performance measures and baseline data
were adequate to prevent and mitigate corrosion DOD-wide, we interviewed
the leader of the task force working group for Metrics, Impacts, and
Sustainment about the development of the strategy's performance measures,
barriers to gathering cost data across the military services, and plans to
develop a corrosion cost baseline. We analyzed the costs used to prepare
existing cost impact studies, particularly studies the metrics working
groups plan to use to help establish the baseline. We observed meetings
and internal discussions of the working group for Metrics, Impacts, and
Sustainment at four separate corrosion forums sponsored by the task force.
We also reviewed corrosion prevention documents related to the development
of performance metrics and the baseline study.

To assess the adequacy of the strategy's policy guidance for preventing
and mitigating corrosion, we met with the Office of the Deputy
Undersecretary of Defense for Defense Systems, the Joint Chiefs of Staff
for Logistics, and members of the task force's working group for Policy
and Requirements. To determine how the corrosion policy affected military
infrastructure, we interviewed officials in the Office of the Deputy Under
Secretary of Defense for Installations and Environment, and members of the
task force's working group for Facilities. We also attended

Appendix I: Scope and Methodology

the TriService Corrosion Conference, the Army Corrosion Conference, and
all four Corrosion Forums sponsored by the corrosion task force to better
understand the role of policy and its impact on military equipment and
infrastructure. We also reviewed relevant policy documents, memos,
instructions, and regulations.

To assess the reliability of the estimated funding needs for corrosion
prevention projects for fiscal years 2004 through 2009 by the military
services we (1) interviewed officials knowledgeable about the data and (2)
assessed related funding requirements studies and reports. We determined
that the data were sufficiently reliable for the purposes of this report.
We conducted our review between November 2003 and April 2004 in accordance
with generally accepted government auditing standards.

Appendix II: Comments from the Department of Defense

Appendix II: Comments from the Department of Defense

Note: Page numbers in the draft report may differ from those in this
report.

Appendix II: Comments from the Department of Defense

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