Depot Maintenance: Army Report Provides Incomplete Assessment of
Depot-Type Capabilities (Letter Report, 10/15/1999, GAO/NSIAD-00-20).

Pursuant to a congressional request, GAO reviewed the Army's report on
the proliferation of depot maintenance-type activities at non-depot
facilities for completeness and adequacy, focusing on the: (1) the total
amount of depot maintenance-type work conducted at local maintenance
facilities and the cost efficiency of such work in view of the Army's
overall requirements; and (2) plans for consolidating fragmented
maintenance operations.

GAO noted that: (1) the Army's report did not sufficiently identify the
extent of depot maintenance-type work performed at non-depot facilities;
(2) the Army reported that 40 staff years of depot maintenance-type work
was performed outside of the formal depot system by non-depot
maintenance providers operating under special repair authorities; (3)
however, other sources of information indicate that additional amounts
of depot maintenance-type work and capabilities exist at various
non-depot facilities; (4) further, the Army was unable to develop
accurate and consistent estimates of its depot maintenance-type work
because its reporting criteria are not consistent with the definition in
10 U.S.C. 2460, and management information systems and procedures are
not equipped to assess the magnitude and cost-effectiveness of all
maintenance and supply functions; (5) citing inadequate data on the
subject, the Army's report did not make any recommendations for
consolidating depot maintenance-type facilities to the public depots;
(6) nonetheless, the report did outline a number of ongoing initiatives,
and it recommended other actions to improve the management of
information on facilities performing depot maintenance-type tasks; (7)
these actions should provide some of the data and management
improvements needed to support future consolidation recommendations; (8)
although not specifically addressed in the Army's report, the Army has
developed a draft strategic plan for its depot maintenance facilities;
(9) however, key details for implementing many of the planned actions
remain to be developed, including plans to assess the capabilities of
and future requirements for the Army's maintenance support structure;
(10) GAO identified a number of continuing challenges the Army faces in
attempting to address the fragmentation of depot maintenance work and
the proliferation of depot maintenance-type facilities; (11) key among
them is the amount of depot maintenance-type capabilities controlled by
major commands in the active Army and the Army National Guard; (12) for
various reasons, these commands are reluctant to reduce their present
capability for performing depot maintenance-type workloads; and (13)
eliminating the fragmentation, duplication, and excess capacities within
the Army's maintenance infrastructure--while implementing solutions that
are best from a warfighting perspective and most cost-effective to the
Army as a whole--represents a formidable challenge for Army leadership.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-00-20
     TITLE:  Depot Maintenance: Army Report Provides Incomplete
	     Assessment of Depot-Type Capabilities
      DATE:  10/15/1999
   SUBJECT:  Centralization
	     Cost effectiveness analysis
	     Army facilities
	     Logistics
	     Military downsizing
	     Strategic planning
	     Equipment maintenance
IDENTIFIER:  Army Working Capital Fund
	     Army Integrated Sustainment Maintenance Program

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Report to the Chairman and Ranking Minority Member, Committee on Armed
Services, House of Representatives

October 1999

DEPOT MAINTENANCE

Army Report Provides Incomplete Assessment of Depot-type
Capabilities
*****************

*****************

GAO/NSIAD-00-20

Letter                                                                     3

Appendixes

Appendix I:Repair Parts Obtained at Local Levels Bypassing Normal Supply
Process

                                                                         30

Appendix II:Potential Providers of Depot Maintenance-Type Services
Maintenance Program Within the Continental United States

                                                                         35

Appendix III:Local Maintenance Facilities and Depots Visited by GAO

                                                                         39

Appendix IV:Comments From the Department of Defense

                                                                         40

Appendix V:GAO Contacts and Staff Acknowledgments

                                                                         42

Related GAO Products

                                                                         43

Table 1:  Historical Workload Data for the Repair and Overhaul of
Various Military Engines at Three Army Depots   31

Figure 1:  Location of the Army's Maintenance Facilities Within the
Continental United States9

AMC     Army Materiel Command

BRAC    Base Realignment and Closure

DOD     Department of Defense

SRA     Special Repair Authority

 In this report we refer to depot maintenance-type activities as work
performed by local maintenance and repair facilities that meets the
definition for depot maintenance in
 As a result of these declining workloads, the number of operating
maintenance depots decreased from 10 to 5 between 1976 and 1995. Even so,
Army officials have recognized that they continue to retain excess
capacity in their depot system and that factor, along with continuing
reductions in programmed maintenance work, results in higher operating
costs. The Army has previously proposed reducing the number of government-
owned and
 DOD's annual report of public and private sector workload allocations
required by
                                                      National Security and
                                             International Affairs Division

B-283179

October 15, 1999 

The Honorable Floyd Spence
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives

Under 10 U.S.C. 2460, depot maintenance and repair involves the overhaul,
upgrade, and rebuilding of military systems, subsystems, parts, and
assemblies. In recent years, some depot maintenance workloads have become
fragmented--that is, some depot maintenance workloads have shifted to non-
depot facilities--leading to uncertainty about the magnitude of depot
maintenance-type capabilities, workforce requirements, and the
distribution of work to public and private sector facilities. 

In response to direction from your Committee, the Army submitted a report
on April 14, 1999, on its study of the proliferation of depot
maintenance-type activities at non-depot facilities./Footnote1/ You also
required that we report on the completeness and adequacy of the Army's
report along with any other relevant information./Footnote2/ Specifically,
this report determines the extent to which the Army's report (1)
identifies the total amount of depot maintenance-type work conducted at
local maintenance facilities and the cost efficiency of such work in view
of the Army's overall requirements and (2) addresses plans for
consolidating fragmented maintenance operations. Additionally, this report
highlights continuing challenges the Army faces in its efforts to resolve
proliferation issues. 

Results in Brief

The Army's report did not sufficiently identify the extent of depot
maintenance-type work performed at non-depot facilities. The Army reported
that 40 staff years of depot maintenance-type work was performed outside
of the formal depot system by non-depot maintenance providers operating
under special repair authorities. However, other sources of information
indicate that additional amounts of depot maintenance-type work and
capabilities exist at various non-depot facilities. Further, the Army was
unable to develop accurate and consistent estimates of its depot
maintenance-type work because its reporting criteria are not consistent
with the definition in 10 U.S.C. 2460, and management information systems
and procedures are not equipped to assess the magnitude and cost-
effectiveness of all maintenance and supply functions. 

Citing inadequate data on the subject, the Army's report did not make any
recommendations for consolidating depot maintenance-type facilities to the
public depots. Nonetheless, the report did outline a number of ongoing
initiatives, and it recommended other actions to improve the management of
information on facilities performing depot maintenance-type tasks. These
actions should provide some of the data and management improvements needed
to support future consolidation recommendations. Although not specifically
addressed in the Army's report, the Army has developed a draft strategic
plan for its depot maintenance facilities. However, key details for
implementing many of the planned actions remain to be developed, including
plans to assess the current capabilities of and future requirements for
the Army's maintenance support structure. 

We identified a number of continuing challenges the Army faces in
attempting to address the fragmentation of depot maintenance work and the
proliferation of depot maintenance-type facilities. Key among them is the
amount of depot maintenance-type capabilities controlled by major commands
in the active Army and the Army National Guard. For various reasons, these
commands are reluctant to reduce their present capability for performing
depot maintenance-type workloads. Eliminating the fragmentation,
duplication, and excess capacities within the Army's maintenance
infrastructure--while implementing solutions that are best from a
warfighting perspective and most cost-effective to the Army as a whole--
represents a formidable challenge for Army leadership. 

This report makes recommendations to the Secretary of Defense intended to
strengthen the Army's abilities to address the fragmentation of depot
maintenance work and the proliferation of depot maintenance-type facilities.

Background

The Army assigns maintenance and repair work to four different
levels./Footnote3/ From the least to the most intensive, they are unit
level, direct support, general support, and depot level. 

Unit and direct support workload categories are assigned to deployable
military units located at various field locations. Maintenance at these
two levels generally focuses on day-to-day and routine recurring
maintenance, but it is not expected to go beyond the removal and
replacement of components.

General support maintenance is conducted by military personnel, government
civilians, or contractor employees, usually at fixed
(non-mobile) industrial-type facilities located on Army posts, camps, and
stations./Footnote4/ Maintenance at this level involves the repairing and
overhauling of parts and assemblies and some end items, such as trucks.
General support maintenance units are under the command and control of
major operating commands; as with lower-level maintenance facilities,
these units are supported by direct appropriations for operations and
maintenance./Footnote5/ 

Depot-level support is the most intensive level of maintenance and repair;
as noted, it involves overhauling, upgrading, and rebuilding of military
systems, subsystems, parts, and assemblies. When compared to general
support maintenance, depot-level maintenance work generally involves the
use of higher skilled technicians and more sophisticated test and plant
equipment. Depot-level maintenance has traditionally been performed by
government civilians working at government-owned industrial facilities
under the command and control of the Army Materiel Command (AMC) or by
contractor personnel working in contractor-owned and -operated facilities
performing work specified by AMC-managed maintenance contracts. The Army's
five government-operated maintenance depots are managed within the Army
Working Capital Fund. Contract depot maintenance work is not managed under
the working capital fund.

Army maintenance facilities obtain repair parts through a two-tiered,
wholesale and retail logistics support system. Despite long-standing
efforts to merge the wholesale and retail supply systems, each system
continues to operate independently. Under the current system, Army retail
supply managers may arrange for unserviceable repair parts to be repaired
by local maintenance facilities or they may order replacement parts from
the wholesale system. 

Responsibility for the Army's wholesale system is assigned to four major
commands subordinate to the Army Materiel Command. The subordinate
commands manage repairable item inventories, arranging for the repairs of
unserviceable items returned to the supply system and for the procurement
of new items directly from vendors./Footnote6/ In addition, the Defense
Logistics Agency arranges for the procurement and distribution of various
supplies used in the maintenance process./Footnote7/ 

Responsibility for the Army's retail supply system is assigned to
field-operating commands. Retail supply activities may draw repair parts
from wholesale inventories that are held in government warehouses to meet
the demands of retail customers or arrange for the repair of items through
local maintenance facilities. Since April 1992, Army wholesale inventory
managers have been charging retail customers, such as combat units and
retail supply support activities, for repairable items that they
previously provided at no cost. This change was implemented as a cost-
reduction effort to encourage retail customers to order no more than they
needed and to fully diagnose equipment malfunctions and repair items
within their capability. 

Depot Maintenance Workloads Declining and Fragmented 
-----------------------------------------------------

In recent years the amount of work assigned to the Army's major industrial
maintenance depots has declined significantly./Footnote8/ Work at the
major maintenance depots has declined for a number of reasons, including
reduced force structure, increased emphasis on outsourcing, and DOD and
Army policies that advocate placing maintenance and repair workloads at
the lowest level maintenance facility with capability to perform the task.
In addition, as we have previously reported, operating units sometimes
believe they can obtain repairs at less cost at non-depot facilities that
do not operate under the working capital fund and that are not required to
recoup from customers the full costs of providing goods and
services./Footnote9/ Likewise, we have reported that in recent years the
Army's Forces Command and Training and Doctrine Command have operated an
increasing number of regional repair facilities at active Army
installations that siphon depot maintenance-type workloads from regular
depot facilities. The Army National Guard also operates regional repair
facilities at state-owned National Guard sites. Categorized as integrated
sustainment maintenance (ISM) facilities, they repair Army equipment above
the direct support level, including general support and depot-level
support tasks. Current Army policy allows some ISM sites to perform depot-
level tasks under a Special Repair Authority (SRA)./Footnote10/ While some
Army officials told us the ISM program involves only a small amount of
depot maintenance-type work based on their understanding of the Army's 4-
level maintenance process, other sources told us the amount of depot
maintenance-type work would be substantial, given the depot maintenance
definition enacted in 1997, and codified at 10 U.S.C. 2460. 

Despite declining workloads, the Army's maintenance organizations employ a
large number of skilled personnel, some of which are underutilized. As we
previously reported, at the end of fiscal year 1998 the Army's five depots
reportedly employed about 11,200 persons that were involved in depot
maintenance-type work utilizing about 68 percent of available production
capacity. While detailed information is not currently available to
document the capabilities, capacity utilization, and size of the Army's
network of potential local maintenance providers, Army records show that
in fiscal year 1998 about 9,800 persons were employed at
133 different local maintenance facilities worldwide. About 46 percent of
the local maintenance personnel are employed by the National Guard,
22 percent by the Forces Command, 12 percent by the Training and Doctrine
Command, 19 percent by the European Command, and 1 percent by the Army
Reserve. In fiscal year 1998, the Army reportedly spent about $1.7 billion
on depot-level maintenance work, of which $941 million, or about 54
percent, was provided to government-operated facilities and
$788 million, or about 46 percent, to contractor-operated facilities.

Figure 1 shows the location of the Army's five working capital funded
maintenance depots and the locations of the Army's direct appropriation
funded local maintenance facilities within the continental United States.

Figure****Helvetica:x11****1:    Location of the Army's Maintenance
                                 Facilities Within the Continental United
                                 States

*****************

*****************

Note: In addition to the sites shown above, the Army National Guard
operates one or more sites in each state. See appendix II for a complete
list.

Concerns About Identifying All Depot-Level Work and Determining Work Force
Requirements 
---------------------------------------------------------------------------

With changes in sources of repair and what appeared to be movement of some
depot-level work to below-depot level facilities in recent years,
questions have arisen concerning the definition of depot-level work and
the allocations of depot maintenance workloads between the public and
private sector facilities. The Congress enacted legislation specifying the
characteristics of depot maintenance workloads, and requiring annual
reports on workload allocations between the public and private
sectors./Footnote11/ As we have previously pointed out, under the
statutory definition, depot maintenance work was not limited to a specific
level or category of repair activity./Footnote12/ Therefore, depot
maintenance-type work performed at non-depot facilities that meets the
definition contained in 10 U.S.C. 2460 should be included as part of the
Army's assessment of its maintenance programs and activities. 

The House National Security Committee, in its report accompanying the
Defense Authorization Act for Fiscal Year 1999 (report number 105-532),
voiced concern over the Army's active and reserve component installations
developing depot-like capabilities without assessing the impact on the
Army's overall maintenance infrastructure. Further, the Committee
questioned the process the Army used to determine workforce requirements
for depot facilities. 

Depot Work Performed by Local Maintenance Facilities Is Understated, and
Financial Impact Is Uncertain
---------------------------------------------------------------------------

In April 1999, the Army reported that in fiscal year 1998 local
maintenance facilities, operating under special repair authorities,
completed 40
staff-years of depot maintenance-type work at a reported cost of $17.6
million. The Army's report acknowledged that its report did not take into
consideration the most current definition of depot maintenance work
contained in 10 U.S.C. 2460, and it recognized significant limitations in
systems and procedures to fully quantify and assess the cost efficiency of
depot maintenance-type work being done outside the formal depot system. A
separate DOD report sent to the Congress on February 5, 1999,/Footnote13/
as well as our own assessment of other depot maintenance-type workloads
being conducted by local maintenance providers, indicates that the amount
of the Army's depot-level work being performed at non-depot facilities is
much greater than the Army's April report indicates. 

Army's Process for Identifying Depot-Level Maintenance Workload Does Not
Reflect Statutory Definition and Masks Total Workload Volume
---------------------------------------------------------------------------

The Army has not yet revised its maintenance policies and technical
manuals to reflect recently enacted legislation defining depot maintenance
workloads. In this context, any attempt by the Army to estimate the amount
of depot maintenance work conducted at local maintenance facilities likely
would be misleading. Army officials at the local maintenance facilities
that we visited had limited knowledge of the definition of depot
maintenance contained in 10 U.S.C. 2460. When questioned about the amount
of depot maintenance work conducted at the local level, they routinely
referred to technical maintenance manuals and the maintenance allocation
charts that assigned detailed work tasks according to the four levels of
Army maintenance. These manuals and allocation charts did not address the
statutory definition. They stated that depot-level work tasks were not
performed unless higher commands had granted special repair
authorities./Footnote14/ Nonetheless, they acknowledged that in some
instances local repair activities were overhauling or rebuilding various
Army equipment. Officials said that maintenance manuals specified that the
individual work tasks did not require that work be performed in a depot.
Further, in their way of thinking, maintenance work that is not performed
in a depot is not depot maintenance./Footnote15/

Army headquarters officials told us they were revising maintenance
regulations and technical manuals to reflect the statutory definition. In
commenting on a draft of this report, Army officials stated that they
planned to publish revised regulations during the first quarter of fiscal
year 2000 that will include the statutory definition for identifying and
reporting depot maintenance-type workloads. However, efforts to update the
Army's technical manuals, will require significant labor intensive reviews
and analyses by numerous maintenance technicians, and therefore completion
dates are dependent upon approval of necessary funding to support the work. 

Special Repair Authority Data Files Are Inconsistent and Incomplete
-------------------------------------------------------------------

The Army's report based its estimate of depot maintenance-type workloads
at non-depot facilities on work conducted under special repair
authorities. However, the report noted that inconsistencies existed
between automated SRA databases maintained by various Army headquarters
and field-level organizations. For example, the Army's April 1999 report
shows 2,233 approved SRAs based on information obtained from the Army
Materiel Command's database and about 1,274 SRAs based on information
obtained from major operating commands' automated databases. Further, our
discussions with members of the Army's depot proliferation study team
indicate that the major operating commands have not developed complete and
accurate reports of SRA expenditure data. For example, the Forces Command
reported that Fort Hood, Texas, completed SRA workloads costing about
$369,000, while Fort Hood's records value the SRA work at about $487,000.
Further, the reserve components reported only limited involvement with SRA
workloads, but the actual amount could be higher than reported because
they routinely performed depot-level tasks that were not specifically
authorized by a special repair authority. For example, during our January
1999 visit to the Aviation Classification Repair Activity Depot in
Gulfport, Mississippi, we learned that National Guard personnel routinely
performed depot-level work on older non-mission critical helicopters
without seeking authority from higher headquarters. An official at the
Gulfport facility stated that about 10 percent of their workload could be
considered depot maintenance tasks. However, based on their understanding
of internal operating procedures formulated by the National Guard Bureau,
the aviation depots thought they were not required to seek approval or
report on the value of SRA-related workloads for non-mission critical
aircraft. Subsequent to our visit, the Gulfport facility initiated
requests for about 34 individual SRAs, as of July 1999. 

Examples of Significant Depot Maintenance Workloads Conducted at Non-Depot
Facilities
---------------------------------------------------------------------------

While the Army's report was focused on quantifying the amount of depot
maintenance work conducted under special repair authorities, it identified
several examples of significant equipment overhaul and rebuild programs
that were assigned to local maintenance facilities and that could be
considered as depot maintenance work under the 10 U.S.C. 2460 definition.
However, due to uncertainties and inconsistencies in the Army's criteria
for categorizing and reporting depot maintenance-type workloads and
ineffective management information systems, the Army's April 1999 report
did not identify the total magnitude of work being conducted, or the
number of local repair facilities and personnel performing depot
maintenance-type services. Specifically, our review of these programs
shows the following:

o   The Army overhauls and rebuilds numerous components--including
  engines, transmissions, circuit cards, and generators--at more than
  100 local maintenance facilities managed under the integrated
  sustainment maintenance program. In fiscal year 1998 the integrated
  sustainment maintenance program coordinated secondary item repair
  programs with a reported cost exceeding $260 million. While much of
  this work meets the definition of depot maintenance as specified by
  10 U.S.C. 2460, current Army policies and procedures allow it to be
  done at non-depot locations./Footnote16/ Appendix II provides a list
  of the maintenance organizations currently involved in the Army's
  integrated sustainment maintenance program within the continental
  United States. 

o   The Army authorizes 20 different local maintenance facilities to
  repair and rebuild tank engines and modules. The Army does not maintain
  records indicating the costs associated with each engine repair action
  or the number of units being repaired at each of the facilities. Army
  officials told us the M1 tank engine work was traditionally assigned to
  the Anniston Army Depot, but later it was partially assigned to the
  local level to avoid the perceived higher prices charged by the working
  capital funded depot. Additionally, Army officials cited readiness
  advantages in having maintenance resources located close to the end
  users. We noted that in some instances M1 engine maintenance
  capabilities have been established and continue to operate in
  relatively close proximity to one another. For example, three units
  operate in the area of Fort Hood, Texas, while two operate in the area
  of Fort Riley, Kansas, and two within the Korean theater of operations.
  Further, we found that capabilities at one of the Fort Riley facilities
  were recently expanded to enable the Kansas National Guard to perform
  depot-level overhauls that will provide work for about 55 full-time
  employees. A Kansas National Guard official estimated that his repair
  activity has capacity to completely overhaul 100 M1 engines per year
  and plans to become the maintenance provider of choice within the
  National Guard community by offering lower rates than can be obtained
  from working capital funded depots. 

o   Local maintenance facilities are receiving millions of dollars to
  repair and rebuild tactical wheeled vehicles. For example, between
  fiscal years 1995 and 1999 contractor-operated repair facilities at
  Fort Polk and Fort Riley received about $48 million to rebuild and
  refurbish 1,586
  semi-trailers; 225 fuel tankers; 802 cargo trucks and tractors; and
  712 general-purpose vehicles. The contractor operated facilities
  received funding through the Army Forces Command. Further, the
  Mississippi National Guard was completing a multiyear program to
  repair and refurbish 1,182 vehicles under the European retrograde
  program at a budgeted cost of $64 million./Footnote17/ Also, the
  Army's supporting documentation for the fiscal year 1998 workload
  allocations shows that the Maine, Mississippi, Kansas, and Texas
  National Guard organizations received about $2 million to rebuild 5-
  ton trucks. Army officials said they were assigned this work because
  the Army's remaining depots were unaffordable. Based on the Army's
  current workload allocation process, Army officials commented that
  the work did not need to be performed in a depot. Following the Base
  Realignment and Closure Commission (BRAC) directed closure of the
  Tooele Army Depot in 1993, the Army downgraded all of its tactical-
  wheeled vehicle maintenance work, directing that it be performed at
  the general support level and below. More recently, Army
  headquarters officials told us they were considering changing some
  of the tactical-wheeled vehicle workload classifications to once
  again reflect depot-level tasking, but it is unclear how this change
  in policy will impact future workload assignments. 

o   AMC has established several forward repair activities/Footnote18/ to
  perform depot-level tasks at local installations having a high
  concentration of fielded equipment within a selected geographic area.
  Personnel assigned to the forward repair activities are depot employees
  paid by the Army working capital fund. For example, in fiscal year
  1997, the Command established a forward repair activity at Fort Bliss,
  Texas, to support field artillery repair programs. As of December 1998,
  the forward repair activity employed 25 civilian personnel under the
  control and supervision of the Army's Letterkenny, Pennsylvania, depot.
  Army briefing documents indicate that concentrating equipment
  specialists in close proximity to users reduced repair costs by 30
  percent and repair turnaround times by 50 percent. While potentially
  beneficial, the Army has not completed such an analysis on a broader
  scale. Army officials explained that the forward repair activity
  concept reduced costs and repair turnaround times through use of higher
  skilled personnel and more sophisticated test equipment than are
  normally available at local maintenance facilities. To enhance
  warfighting readiness, AMC is planning to establish a forward repair
  activity in Korea for support of various aviation and missile systems.

While we were unable to fully evaluate the costs associated with these
maintenance providers, they do suggest the presence of significant
depot-level repair capabilities in the Army's non-depot facilities.

Overall Cost Efficiency of Local Repair Programs Is Uncertain
-------------------------------------------------------------

The Army's report stated that major operating commands were taking
extraordinary measures to avoid placing orders for repair parts with
wholesale inventory managers due to the perceived higher cost of the depot
repair programs, but did not evaluate the cost efficiency of the
alternative local repair sources in view of the Army's overall
requirements. Further, the report stated that the Army lacks effective
management information and procedures to determine the cost tradeoffs of
more frequent local repair programs versus less frequent and more
extensive depot overhaul programs. 

Although the Army was unable to fully evaluate the cost benefits of local
repair programs, the current separation of the wholesale and retail supply
support systems sub-optimizes resources, leading to the accumulation of
excess stocks and duplication of repair workloads and infrastructure. For
example, we found that multiple local maintenance facilities were
repairing items for which the Army's wholesale inventory managers already
had supplies of serviceable items on hand in excess of requirements. As
indicated in appendix I, the Army's current fragmented depot maintenance
management and workloading process may not lead to the most
cost-effective decisions and can undermine efforts to maximize
cost-effectiveness of the Army's overall logistics support.

In commenting on a draft of this report, Army officials acknowledged that
local maintenance facilities were repairing items when the Army's overall
inventory of serviceable items exceeded requirements. However, they stated
that this practice would cease upon implementation of the evolving
national maintenance program. While the national maintenance program will
likely reduce the volume of unnecessary and uneconomical local repairs,
the evolving program is dependent upon timely and effective completion of
ongoing initiatives to consolidate wholesale and retail level stocks.
Further, as currently planned, the evolving national maintenance strategy
will allow local repair activities to continue performing depot
maintenance-type workloads if repaired items are returned to using
organizations rather than a supply system shelf. Thus it is unclear to
what extent these ongoing initiatives will resolve the fragmentation and
duplication problems we have discussed in this report. 

No Consolidation Recommendations Made, but Ongoing Initiatives Should
Strenghten Management Information and Promote Consolidation Efforts 

The Army's report noted that better data about the amount and nature of
the maintenance performed by local repair and maintenance facilities is
needed before any conclusions can be drawn regarding the potential for
consolidation of depot maintenance-type facilities. Consequently, the
report did not include any recommendations for consolidations.
Nevertheless, the report did outline a number of ongoing initiatives and
recommended actions to improve the management of information on facilities
performing depot maintenance-type tasks, which could provide management
information and organizational controls to identify and implement future
options for consolidating fragmented depot
maintenance-type workloads. In summary, these initiatives include plans to
implement a new maintenance strategy and a centralized process for
evaluating logistics requirements. Although not specifically addressed in
the report, the Army is implementing a recommendation we made in a
previous report to develop a strategic plan for depot maintenance-type
facilities./Footnote19/ However, key details for implementing many of the
planned actions remain to be developed. 

Army Plans to Group Maintenance Requirements Into Two Broad Categories,
but Impact on Maintenance Depots and Local Repair Facilities Is Uncertain
---------------------------------------------------------------------------

The Army is drafting changes to its maintenance policies and procedures
that will group the four levels of maintenance into two maintenance
categories--field-level maintenance and national-level
maintenance./Footnote20/  The current plans are as follows: 

o   The field-level maintenance category will include support from
  non-depot activities, including unit level, direct support, and
  general support maintenance facilities. Field-level maintenance will
  be focused on the repair and return of parts and assemblies to the
  users. Field-level maintenance is intended to support the near term
  readiness of military units and will be controlled and financed by
  the users. 

o   The national-level maintenance category will include support from
  regular maintenance depots, industrial base contractors, and qualified
  local maintenance providers. National-level maintenance will be focused
  on the repair and return of parts and assemblies to the supply system.
  National-level maintenance will be distributed by a single manager and
  require the total overhaul of items to like new condition. 

The planned policy revision will more closely align the Army's maintenance
categories with the 10 U.S.C. 2460 definition of depot maintenance work.
As a result, the total range of depot maintenance-type workloads will be
more visible, which will enable Army leaders to better identify
opportunities for consolidating fragmented and duplicative workloads. Army
headquarters officials told us the Army's major operating commands
received notice of these emerging changes in a message issued on July 14,
1999, and estimated that the Army would formally publish the policy change
in November 1999. We were advised that the Army was developing phased
implementation plans for this change. However, at this point, completion
dates and the affect on workload distributions to the regular maintenance
depots and the Army's network of local maintenance facilities are unclear.
Army headquarters officials told us the policy change could possibly
result in shifting some work from local maintenance providers to regular
depots. However, commanders may be reluctant to change sources of repair,
given the perceived lower costs offered by local maintenance providers and
the existing capabilities and capacity of local providers to accomplish
necessary repair tasks. 

Army Plans to Centralize Maintenance and Logistics Management Practices
-----------------------------------------------------------------------

Key to the Army's ongoing maintenance restructuring is the implementation
of a single stock fund to replace the current dual system. In November
1997 the Army's Vice Chief of Staff approved a strategy to implement a
centralized management process for evaluating logistics requirements and
managing maintenance facilities. Army officials stated that by fiscal year
2001 the current wholesale and retail repair parts inventories will be
centrally owned and managed; thus customers will no longer have financial
incentives to seek and obtain maintenance support from alternative repair
sources. The goal is that future repair program requirements will be based
on the overall needs of the Army, rather than the sub-optimized needs of
individual commands. 

In July 1999 the Army designated the Commander of the Army Materiel
Command as the National Maintenance Manager with responsibility for
overseeing the Army's logistics and maintenance support programs. To gain
purview over the maintenance capabilities and work being performed by the
Army National Guard and major operating commands within the active duty
component, the national maintenance office is developing plans to transfer
command and control of a small number of employees from the major
operating commands to AMC. Army officials told us they initially
identified 210 personnel spaces for transfer from the operating commands
to AMC; however, more recent information indicates the number will be
substantially lower. Army headquarters officials told us the major
operating commands are reluctant to transfer resources to AMC because they
fear such transfers could adversely affect readiness. Additionally, the
major operating commands do not have visibility over the impact of the
maintenance actions they take with regard to the Army's total logistics
costs. It is unclear to what extent the major operating commands may erode
the authority of the national maintenance program.

Upon implementation, the national maintenance management office plans to
centrally coordinate the allocation of depot maintenance-type work to
private sector contractors, regular working capital funded maintenance
depots, and a relatively small number of local maintenance facilities. As
the national maintenance office gains purview over the full range of
potential providers of depot maintenance-type services, it plans to award
future maintenance workloads on the basis of best value analysis, and
consolidate duplicative and redundant workloads as appropriate. Army
officials told us that ultimately this approach could result in several
"mini depots" being strategically placed throughout the continental United
States to provide for the repair and overhaul of items for which the
regular depots and maintenance contractors lack sufficient capability or
capacity. However, at this point it is unclear how these facilities would
be organized or the basis on which such decisions would be made. In
addition, the national maintenance office has no firm plans or procedures
for assessing the capabilities or cost-effectiveness of each depot
maintenance-type facility--critical information that the Army needs for
assessing opportunities for consolidating or eliminating unneeded
maintenance infrastructure. 

Army Report Recommended Actions to Improve Maintenance Management and
Oversight
---------------------------------------------------------------------------

The Army's report to the Congress recognized opportunities for additional
improvements to the management of information and coordination of work
performed by depot maintenance-type facilities. For example, it
recommended that senior Army leaders and major Army commands 

o   expand and institutionalize the Army's definition of depot
  maintenance in accordance with 10 U.S.C. 2460 and also clarify and
  reach agreement with the Congress on the distinction between field-
  level repair and depot-level maintenance;

o modify and standardize Army data systems to provide for the full
  accounting of depot maintenance-type work at all locations;

o   improve processes, procedures, and accounting systems for managing
  SRAs and require all active and reserve component maintenance
  organizations to submit annual SRA production reports to the Army
  Materiel Command; and

o   establish policies, decision structure, and analysis tools for
  determining whether opportunities exist for reaching specific
  conclusions on the consolidation of local depot maintenance-type
  facilities to the depots.

These actions recognize the Army's inability to provide sufficient
information on the proliferation of depot maintenance-type work at
non-depot facilities. The report does not provide a time frame for
accomplishing these actions; therefore it is uncertain when the Army will
be able to formulate plans for consolidating duplicative and fragmented
depot maintenance-type workloads.

Strategic Plan Being Developed 
-------------------------------

Our November 1998 report on Army industrial facilities recommended that
the Army develop a strategic plan to guide future downsizing of regular
depots and manage the full spectrum of local maintenance facilities with
capabilities to perform depot maintenance-type work./Footnote21/ While the
Army's April 1999 report on depot proliferation did not address the Army's
ongoing efforts to develop a strategic plan for its depot maintenance-type
facilities, we reviewed draft documents associated with the development of
the strategic plan, and we found that its goals and objectives would be
key to addressing the proliferation issue, although specific
implementation details are not yet developed. The five strategic goals,
objectives, and performance measures associated with the Army's draft
strategic plan are summarized as follows:

o   Centrally identify and manage all depot maintenance requirements. The
  current depot customer base is fragmented between various commands and
  does not provide an accurate estimate of future work. To achieve this
  goal, the Army plans to develop a process within 1 year to coordinate
  Army-wide depot requirements, improve information systems, and evaluate
  and analyze customer satisfaction. Customers will also be required to
  commit resources to deliver at least 80 percent of the forecasted
  workload to the designated source of repair, and depots will be
  required to rightsize their workforces to support the forecasted
  workload estimates.

o   Develop processes and procedures to ensure that source-of-repair
  decisions support overall Army goals and objectives. This process
  affects the amount of work the central depot maintenance manager has to
  distribute across the full spectrum of potential providers and affects
  the stability of workload forecasts, depot maintenance costs, and
  mission readiness. To achieve this goal, the Army plans to develop
  revised source-of-repair processes and policies within 1 year. 

o   Maintain a sustainable, multiskilled workforce capable of meeting
  future depot requirements. The depots have been faced with a hiring
  freeze for the last 13 years and are in danger of losing significant
  numbers of skilled personnel as large numbers of employees become
  eligible for retirement. To achieve this goal, the Army will determine
  and publicize the core competencies for each depot and establish a
  timeline for depots to have their workforces proficient in the selected
  competencies. The depots will work with employee unions to establish
  employment practices that rely more heavily on cross-trained artisans
  and temporary employees to supplement the regular depot workforce.
  Within 1 year the Army will draft a plan for hiring and training new
  workers to replace skilled workers that will likely retire in the near
  future.

o   Improve the management of material (parts) to provide for more
  efficient depot operations. Currently, the unavailability of high
  value, long-lead time parts prevents the depots from completing
  maintenance work on time. To achieve this goal, the Army plans to
  improve parts forecasting techniques and revise parts ordering policies
  to enable depots to place higher priority requisitions with supply
  system managers. 

o   Improve the competitiveness of organic depots by making their rates
  more comparable with private sector contractors. To lower depot rates,
  the Army plans to eliminate one half of the non-value added costs from
  depot rates within 2 years and validate the costs and requirements for
  maintaining unutilized plant capacity during peacetime for use during
  contingencies.

Army officials told us they expect to finalize their plan by September
1999, but the final plan's degree of specificity is unclear. As of June
1999 the draft planning documents contained limited implementing details,
milestones, or funding requirements necessary to achieve the plan's
objectives. Further, the plan did not address specific goals and
objectives concerning the allocation of depot maintenance-type workloads
between regular maintenance depots and local maintenance providers in both
the active and reserve component forces, nor did it address methods and
goals for reducing excess capacity--concerns that we highlighted in our
November 1998 report.

Ongoing Challenges Must Be Addressed to Eliminate Fragmentation and
Proliferation

Although the Army is taking actions designed to achieve better control
over its maintenance resources and increase operating efficiencies at its
regular maintenance depots, we identified several factors that could
significantly limit its progress unless they are adequately addressed. For
example, the Army has not clearly articulated plans for evaluating options
for effectively utilizing maintenance resources at the various types of
depot
maintenance-type facilities, including plans for downsizing or
consolidating unneeded infrastructure. Also, until the Army completes
ongoing efforts to fully integrate its logistics systems, Army customers
may continue to choose local sources of repair, rather than ordering depot-
repaired items from the Army supply system. 

Specifically, our work showed that the physical plant infrastructure of
the Army's regular maintenance depots and local repair facilities were
generally sized to accomplish a volume of work in excess of current
requirements. As already noted, we found that the Army's major operating
commands have developed and continue to operate modern and extensive
industrial maintenance facilities that are similar in appearance when
compared to the five major maintenance depots, but smaller in size. In
some cases, active and reserve components independently operate similar
sized maintenance and repair facilities in close proximity to one another.
We visited local maintenance facilities at active and reserve component
units located in five states. (Comparative organizational, staffing, and
other information for these local repair and maintenance organizations and
the Army's five maintenance depots is shown in appendix III.) 

Plans for reducing fragmentation and inefficiencies in depot maintenance
capabilities will likely be hampered by the Army's lack of information
concerning its full capacity for completing depot maintenance-type work at
existing depot facilities as well as at other locations. Likewise,
information is lacking on the comparative cost-effectiveness of each
category of facility. Such information is essential to formulating optimum
plans for consolidating fragmented, duplicative, and excessive
capabilities and infrastructure.

Significant reductions in excess capacity, to the extent it involves
elimination of facilities, will likely be difficult absent legislation
authorizing future BRAC rounds. As the Army and the Department of Defense
(DOD) continue to seek authority from the Congress for additional BRAC
rounds to reduce excess facilities, the Army will need to develop more
complete information on its depot capabilities and their cost-
effectiveness if it is going to realistically determine the full extent of
its excess facilities. In the past, the Army has stated that it only
needed to retain three of its maintenance depots, but more recent actions
indicate that excess capacity could be much greater if all depot repair
capabilities, as well as greater reliance on the private sector for this
work were considered. Complete and reliable cost information will be
essential to sound decisions about the most cost-effective location and
source for depot-level maintenance.

Progress has been limited in reforming the Army's logistics supply system
that supports maintenance facilities. Army officials told us they are
continuing with plans announced several years ago to integrate the
wholesale- and retail-level logistics systems; however, completion has
been delayed until fiscal year 2001. The primary reasons given for delay are
(1) the inability of the Army's outdated computer systems to share
information and (2) the need for approval of financial resources to
support system changes. While the Army has been slow in implementing
logistic reform initiatives, actions taken a few years ago to charge
customers for repairable items previously provided at no cost continue to
stimulate efforts of field-level customers to seek alternate sources of
supply through the use of local maintenance and repair facilities. Our
work shows that customers have minimized their local equipment support
costs, even though inefficiencies were created in the larger maintenance
support system (see app. I). Therefore, any plan to reduce the
proliferation of depot maintenance-type capabilities at the local level is
highly dependent upon timely implementation of the Army's logistics
support system reforms. 

Conclusions

The Army incompletely quantified the extent of depot maintenance-type work
performed at non-depot facilities. Data was not obtained using the
recently enacted statutory definition of depot maintenance work.
Consequently, the Congress and Army managers do not know the extent to
which depot repair capabilities have spread to other locations. However,
our work indicates the extent of proliferation is greater than reported by
the Army and is contributing to excess depot repair capabilities within
the Army. 

The Army's report, citing inadequate data on the subject, did not make any
recommendations for consolidating depot-type facilities to the public
depots. Nonetheless, the report did present a number of related
initiatives and recommendations to improve the management of information
on organizations performing depot maintenance-type work, reforms which
could provide a framework for developing information in support of future
consolidations. These initiatives include actions to centralize
maintenance and logistics management practices under a national manager
responsible for overseeing the program; however, it is unclear how or when
the national manager will gain authority over maintenance capabilities and
work currently provided by the Army National Guard and major operating
commands within the active duty component. The Army recognizes that it
needs to modify and standardize Army data systems to fully account for
depot maintenance-type work at all locations, but it has not established
clear action plans, milestones, and funding requirements for doing so. The
Army is also taking steps to develop a strategic plan for depot
maintenance facilities. However, key details for implementing many of the
planned actions have not been supplied.

Lastly, we identified a number of ongoing challenges the Army faces in
attempting to address the fragmentation of depot maintenance-type
workloads. Key among them is the significant amount of depot maintenance-
type capabilities operated by major commands in the active Army and the
National Guard, each with its own high-level proponents. Further, the Army
currently lacks complete information on the magnitude of its capabilities
for performing depot-level maintenance at various locations, and it lacks
information on the cost-effectiveness of each category of maintenance and
repair facility, including related supply support. Accordingly, Army
leaders are faced with a formidable challenge as they attempt to eliminate
fragmentation, duplication, and excess capacities, and at the same time
implement solutions that are best from a warfighting perspective and, most
cost-effective to the Army as a whole.

Recommendations

We recommend that the Secretary of Defense require that the Secretary of
the Army, in developing and implementing the Army's strategic plan for
depot maintenance facilities, ensure that the strategic plans and tactical
implementing plans

o   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
  maintenance-type work at various locations within the Army; 

o   establish (1) clear time frames and action plans for assessing
  requirements for the various types of depot maintenance facilities and
  (2) plans for achieving necessary consolidations and reductions of
  excess capabilities; and 

o   incorporate the depot maintenance-type 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 maintenance capabilities in active and reserve
  components.

Agency Comments and Our Evaluation 

The Department of Defense provided written comments that are included as
appendix IV and technical comments that have been incorporated in the body
of the report as appropriate. DOD's comments stated that the Department
generally concurred with our recommendations. 

With regard to the first two recommendations, DOD said that the Army has
developed a strategic plan for improving its depot maintenance program
from a corporate perspective. Further, the next step in this planning
process is to establish timelines and assign responsibility for each goal
and objective to specific organizations. More specific strategic action
plans are expected to be developed through a series of project action
teams by the second quarter of fiscal year 2000. We believe the completion
of a corporate strategic plan is a step in the right direction. However,
we are concerned that available information about this plan does not
confirm how the Army plans to identify and obtain necessary funding to
support implementation of effective management information systems for
determining the magnitude and analyzing the cost-effectiveness of depot
maintenance-type work at various locations within the Army. Further, the
Army has not determined how or when it might develop plans and goals for
achieving consolidations of redundant maintenance infrastructure and
reductions in costly excess industrial capabilities. 

With regard to the third recommendation, DOD stated that the Army is
implementing a national maintenance manager program that will be the focal
point for sustainment maintenance requirements. As currently planned, the
national maintenance program, which will be managed by the Army Materiel
Command, includes plans for consolidating future requirements for the
overhaul of component parts returned to the supply system. These workloads
will be competitively distributed to maintenance activities with existing
capability and capacity. Under this concept the Materiel Command could
choose to distribute some portion of work to local maintenance activities
remaining under the command and control of active and reserve component
operating forces. The evolving national maintenance program concept
appears to be a reasonable start toward addressing problems identified in
our report. However, a variety of factors make it unclear to what extent
this concept can be successfully implemented to achieve desired
consolidations and reductions in excess capacity within the Army's
maintenance infrastructure. For example, while the evolving national
maintenance 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 activities to repair
items returned directly to using organizations--work which could meet the
statutory definition of depot maintenance. Additionally, some other depot
maintenance-type work is not covered by the national maintenance program.
For example, it does not address the allocation of depot maintenance-type
requirements for overhauling, rebuilding, or upgrading of major end items,
such as tactical wheeled vehicles, that are currently being overhauled in
field-level maintenance activities or by contracts managed by field-level
organizations even though this work meets the statutory definition of depot
maintenance-type work.

Scope and Methodology

To evaluate the completeness and accuracy of the Army's report to the
Congress on the proliferation of depot maintenance-type facilities--
including (1) the amount of depot maintenance-type work assigned to local
maintenance facilities and the cost efficiency of such work and (2) plans
for consolidating fragmented maintenance operations--we interviewed
officials and obtained documentation from the Office of the Army's Deputy
Chief of Staff for Logistics, Army Materiel Command, Army Forces Command,
Army Training and Doctrine Command, Army Reserve Command, National Guard
Bureau, and the Eighth U. S. Army (Korea). We also interviewed members of
the Army's study group to gain insight into the varying approaches that
exist within the Army community for identifying the detailed
characteristics of depot maintenance-type workloads and reviewed copies of
backup documentation supporting the Army's depot proliferation study. We
reviewed copies of current and proposed changes to Army maintenance
regulations and compared current and emerging policy statements with the
depot maintenance definition in 10 U.S.C. 2460. We also reviewed the
Army's report to the Congress concerning the allocation of depot
maintenance-type workloads to public and private sector providers. We made
site visits to observe ongoing work and discussed depot proliferation
issues with officials at three of the Army's five working capital funded
maintenance depots and selected local maintenance facilities located in
Texas, Kansas, Louisiana, North Carolina, Mississippi, and several
locations in Korea. In addition, we obtained summary information from a
recently completed analysis by the Army's Materiel Systems Analysis Agency
and judgmentally selected and analyzed 43 items repaired by local
maintenance facilities under the integrated sustainment program during
fiscal year 1998. We also discussed and obtained comments from inventory
management officials as deemed appropriate.

To determine the challenges the Army faces in its efforts to resolve depot
maintenance proliferation and infrastructure fragmentation, we interviewed
officials representing the Army's Deputy Chief of Staff for Logistics, the
Army Materiel Command, and Army contractors assisting in the development
of the Army's draft strategic plan. We reviewed background documentation
describing the Army's tentative strategic goals and objectives for the
depot maintenance enterprise, and we relied heavily on information
obtained in prior GAO reviews of Army depot maintenance programs.

We conducted our review from October 1998 to June 1999 in accordance with
generally accepted government auditing standards.

We are sending copies of this report to Senator John W. Warner, Chairman,
and Senator Carl Levin, Ranking Minority Member, Senate Committee on Armed
Services; the Honorable William S. Cohen, Secretary of Defense; the
Honorable Louis Caldera, Secretary of the Army; and the Honorable Jacob J.
Lew, Director, Office of Management and Budget. We will also make copies
available to others on request. 

Please contact me at (202) 512-8412 if you or your staff have any
questions concerning this report. Other GAO contacts and acknowledgments
are listed in appendix V.

*****************

*****************

David R. Warren, Director
Defense Management Issues

--------------------------------------
/Footnote1/-^10 U.S.C 2460.
/Footnote2/-^ The Committee (report number 105-532) also required that we
  evaluate the completeness and adequacy of the Army's report on the
  Army's Workload and Performance System, an automated system for
  identifying workforce requirements. We plan to issue a separate report
  addressing implementation of this system. 
/Footnote3/-^ However, the maintenance structure for Army aircraft and
  components is comprised of three levels--unit, intermediate, and depot.
/Footnote4/-^ Military personnel operate general support units that are
  deployable for theater operations.
/Footnote5/-^ Such funding is used to pay for most costs associated with
  establishing and operating maintenance facilities at this level. One key
  exception is the cost of military personnel that may be involved in such
  work. The cost of military personnel are accounted for in a separate,
  centrally managed, Military Personnel appropriations account.
/Footnote6/-^ The four subordinate commands are the Tank-Automotive and
  Armaments Command, the Communications-Electronics Command, the Soldier
  Biological and Chemical Command, and the Aviation and Missile Command. 
/Footnote7/-^ In some instances, the Army may rely on prime vendors for
  repair items. Prime vendors are contractors that buy inventory from a
  variety of suppliers, store it in commercial warehouses, and ship it to
  customers when ordered. 
/Footnote8/-^-operated maintenance depots from five to three, but actions
  of the 1995 Base Realignment and Closure (BRAC) Commission resulted in
  five depots being retained.
/Footnote9/-^ Army Industrial Facilities: Workforce Requirements And
  Related Issues Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30,
  1998). 
/Footnote10/-^ Special repair authorities are approved after AMC
  determines that the repair sites have adequate facilities, equipment,
  and sufficient trained personnel to accomplish the tasks. Overall cost-
  effectiveness to the Army is not evaluated.
/Footnote11/-^ Section 2460 of title 10 as amended by the Strom Thurmond
  National Defense Authorization Act for Fiscal Year 1999, provides that
  depot maintenance workloads include maintenance and repair requiring the
  overhaul, upgrade, or rebuilding of parts, assemblies, or subassemblies
  and the testing and reclamation of equipment as necessary, regardless of
  the source of funds or the location where work is performed. DOD is
  required by 10 U.S.C. 2466 to prepare an annual report of public and
  private sector workload allocations. 
/Footnote12/-^ Defense Depot Maintenance: Public and Private Sector
  Workload Distribution Reporting Can Be Further Improved (GAO/NSIAD-98-
  175, July 23, 1998).
/Footnote13/-^10 U.S.C. 2466.
/Footnote14/-^ Special repair authorities are granted after AMC determines
  that repair sites have adequate facilities, equipment, and trained
  personnel. Once approved, they enable local repair sites to perform
  depot-level tasks on specific items for as long as 3 years. 
/Footnote15/-^ Our recent report on depot workload allocations provides
  additional information concerning limitations associated with the Army's
  depot workload data. See: Depot Maintenance: Workload Allocation
  Reporting Improved, but Lingering Problems Remain (GAO/NSIAD-99-154,
  July 15, 1999.)
/Footnote16/-^ Over time, the Army's major operating commands developed
  extensive local maintenance facilities at multiple installations that
  supported similar capabilities and workloads. In 1996 the Army
  established the integrated sustainment maintenance program to
  consolidate workloads and to eliminate some of the proliferation that
  had occurred.
/Footnote17/-^ This work was accomplished on vehicles that had been
  returned to the United States as a result of downsizing initiatives
  within the European Theater. The work was intended to return the
  vehicles to operating condition and, according to National Guard
  officials, involved mostly general support and direct support tasks.
/Footnote18/-^ The forward repair activities are also called logistics
  centers of excellence. These activities are funded, directed, and
  controlled by the Army Materiel Command and provide depot-level support
  at non-depot locations to lower operating costs at the unit level. 
/Footnote19/-^ Army Industrial Facilities: Workforce Requirements and
  Related Issues Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30,
  1998).
/Footnote20/-^ The Army's four levels of maintenance are unit level,
  direct support, general support, and depot level. The Army's maintenance
  policies and structure are described in Army Regulation 750-1.
/Footnote21/-^ Army Industrial Facilities: Workforce Requirements and
  Related Issues Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30,
  1998).

REPAIR PARTS OBTAINED AT LOCAL LEVELS BYPASSING NORMAL SUPPLY PROCESS
=====================================================================

Retail supply managers and local combat units claim substantial cost
avoidance by having items repaired locally versus ordering replacement
items from the wholesale supply system. Wholesale system managers store
items in government warehouses that have been repaired in regular
maintenance depots and new items purchased from private contractors. For
example, in fiscal year 1998, the retail supply customers had 19 UH-1
helicopter engines repaired by local maintenance organizations. (These
engines have a replacement price of $167,500 per unit or approximately
$75,000 when repairable carcasses are returned to the wholesale manager.)
As an alternative, the retail supply managers arranged for the
unserviceable engines to be repaired by direct-funded local repair
facilities at a reported unit cost of $5,000 per engine. The cost
avoidance, at the user activity level, totals $1.3 million, or 19 engines
with a cost avoidance of $70,000 per engine. 

To the user, the local source appears to be a less costly alternative to
more centrally managed supply sources operating under the Army's working
capital fund--a funding source that, unlike direct- or mission-funded
facilities, seeks to recoup the full costs of the products and services it
provides to customers. Whether the local source is less expensive is
unclear since comparable cost and performance data are not readily
available. However, the perception of lower costs for maintenance repairs
and parts obtained at below depot levels was followed by a downward trend
in workloads at Army depots following the change in policy that required
retail customers, such as combat units, to pay for depot repairs that were
previously provided at no cost. Table 1 shows such decreases in workloads
involving various military engines at three of the Army's depots.

Table****Helvetica:x11****1:    Historical Workload Data for the Repair
                                and Overhaul of Various Military Engines
                                at Three Army Depots

--------------------------------------------------------------------------
| Fiscal  :      Tank turbine :  Helicopter turbine :       APCa diesel  |
| year    :        engines at :          engines at :        engines at  |
|         :         Anniston, :     Corpus Christi, :        Red River,  |
|         :    Alabama, depot :        Texas, depot :      Texas, depot  |
|------------------------------------------------------------------------|
| 1991    :              506  :               1,518 :            1,721   |
|------------------------------------------------------------------------|
| 1992    :              348  :               1,063 :            1,646   |
|------------------------------------------------------------------------|
| 1993    :               57  :                 853 :               52   |
|------------------------------------------------------------------------|
| 1994    :               33  :                 740 :               77   |
|------------------------------------------------------------------------|
| 1995    :                5  :                 440 :              741   |
|------------------------------------------------------------------------|
| 1996    :                76 :                 393 :               816  |
|------------------------------------------------------------------------|
| 1997    :                55 :                 472 :               721  |
|------------------------------------------------------------------------|
| 1998    :               100 :                 295 :               186  |
--------------------------------------------------------------------------

aArmored Personnel Carriers.

Source: Army depots.

Our work shows that local maintenance facilities were expected to rebuild
end items and components and return them to normal operating condition--a
maintenance concept the Army refers to as
reliability-centered, inspect and repair only as necessary. In comparison,
depots are expected to overhaul and rebuild items to like new condition--a
maintenance concept requiring that most assemblies or sub-assemblies be
rebuilt or replaced with little or no regard to current operability and
remaining useful life.

Army Lacks Data to Adequately Compare Cost-Effectiveness of Local Repairs
and Depot Overhauls 

We found that the Army currently has only limited historical data to
evaluate the cost benefits of more frequent local repairs versus less
frequent but more comprehensive depot overhaul programs. For example,
information recently developed at the Army's National Training Center at
Fort Irwin, California, shows a reported 21-percent reduction in operating
and support costs for Abrams tanks supported by more extensive depot
overhauls compared to operating costs of tanks repaired under the
reliability-centered maintenance process. Army documents indicate that
overhauled tanks are completely disassembled and rebuilt to like new
condition, including replacement or refurbishment of all components with
any evidence of wear. In comparison, local maintenance and repair
facilities performing work under the reliability-centered maintenance
concept generally do not replace or refurbish component parts until they
fail. 

For several reasons, the Army lacks comparative information on the
relative cost-effectiveness of the two sources of repair for its other
weapon systems. First, the Army does not routinely track maintenance and
operating costs for individual supply items. Further, many of the Army's
current weapon systems are designed on a modular basis; therefore
operating costs for such items (e.g. aircraft and tank engines) cannot be
easily tracked due to regular and routine exchanges of modular components. 

The Army's April 1999 report to the Congress stated that major operating
commands were taking extraordinary measures to avoid placing orders with
wholesale inventory managers due to the perceived higher cost of the depot
repair programs. Further, the report stated that local repair and
maintenance organizations were not actively seeking to take work formerly
assigned to major depots, but the report did not assess the
cost-effectiveness and need for local repair programs in relation to the
Army's overall requirements. A study by the Army's Materiel Systems
Analysis Activity showed that 42 percent of the items repaired by local
maintenance facilities during the first three quarters of fiscal year 1998
could have been avoided if the Army had issued replacement items from
existing inventories of serviceable items. Our work shows that wholesale
item managers were generally not aware of the local repair programs, and
they commented that these actions contribute to excessive stock build-up.
In one instance, we found that a wholesale item manager had sent excess
engines to disposal that were subsequently reclaimed by a retail supply
manager, repaired outside the formal depot system, and entered into the
retail stock accounts for later sale to retail customers at reduced prices.

Inefficiencies in Multiple Uncoordinated Supply Sources
-------------------------------------------------------

While the Army's report did not adequately address the inefficiencies
inherent to the Army's current logistics systems, our work shows that
multiple local maintenance facilities were repairing items for which Army
wholesale managers already had supplies of serviceable items on hand in
excess of requirements. Such inefficiencies could have been avoided if the
Army had integrated management responsibility for its wholesale- and
retail-level inventories. Our limited review of selected items managed by
three of the Army's wholesale inventory management commands shows repairs
of some items were being accomplished by local maintenance facilities even
though central logisticians had available stocks of usable items. The
following examples illustrate this problem:

o   We reviewed the wholesale supply records for 10 items managed by the
  Army's Communications-Electronics Command, but which had been repaired
  by local maintenance facilities. For 7 of the 10 items, we found that
  existing wholesale inventories would have likely satisfied
  retail-level requirements. For example, Army records show that local
  maintenance facilities at Forts Riley and Gordon repaired a total of
  57 power supplies at an estimated cost of $5,000 when the wholesale
  inventory contained 6,932 serviceable units to support a total
  requirement of 2,052 units. Additionally, Army records indicate that
  Fort Hood repaired 25 radios used on weather radar systems at an
  estimated cost of about $30,000 when the wholesale-level inventory
  contained 314 serviceable units to support a requirement of only 25.
  In both instances, the item managers were unaware that repairs were
  being accomplished at field locations. 

o   We reviewed the wholesale supply records for 19 items managed by the
  Army's Aviation and Missile Command, but which had been repaired by
  local maintenance facilities. For 8 of the 19 items, we found that
  existing wholesale inventories would have likely satisfied some of the
  retail-level requirements. For example, Army records show that Forts
  Carson and Bragg repaired a total of 65 flutter dampeners used on the
  UH-60 aircraft for a total estimated cost of about $25,500 when
  wholesale inventory contained 1,459 units on hand to support a
  requirement of 784. Additionally, Army records indicate that Fort Hood
  repaired 5 night sensor assemblies for a total estimated cost of about
  $60,000 when the wholesale inventory contained 25 units to support
  estimated requirements of 6.

o   We reviewed the wholesale supply records for 14 items managed by the
  Army's Tank-Automotive and Armaments Command, but which had been
  repaired by local maintenance facilities. For 6 of the 14 items, we
  found that existing wholesale inventories would have likely satisfied
  some of the retail-level requirements. For example, Forts Bliss and
  Bragg repaired 18 engines for 5-ton trucks in fiscal year 1998 at a
  total estimated cost of $40,674 during which time the wholesale item
  manager determined that 37 serviceable items were excess to the Army's
  needs and had them sent to disposal yards. 

Reclamation and Repair of Excess Items Further Indicates Degree of
Inefficiencies Present in Logistics System
---------------------------------------------------------------------------

The Army's Forces Command currently has contractor operated materiel
management and repair centers at seven active Army installations. These
contractor-operated facilities repair and refurbish more than
350 component parts and maintain inventories that were reportedly valued
at about $40 million near the end of fiscal year 1998. In fiscal year
1998, the contractor-operated centers withdrew excess material from the
Defense Marketing and Reutilization Service with an estimated replacement
value of about $60 million, of which items valued at about $41 million
were considered unserviceable. During the same period, the repair centers
received about $1.8 million to repair and refurbish unserviceable items.
Forces Command representatives told us that none of the repair work was
considered depot level and most involved only limited testing and
servicing to ensure operability. Once the items are repaired, the Forces
Command offers them for resale to customers at reduced prices.

This practice has the potential for creating significant inefficiencies in
the wholesale supply system. It is essentially a duplicate wholesale
supply system that operates without coordination with the formal system.
While the Forces Command has claimed cost avoidance totaling
$195 million over a 4-****ITCCentury Book:xba**** year period, we cannot
be certain of the
cost-effectiveness of such logistics practices to the Army as a whole,
given the duplication in repair capabilities and wholesale inventory
management functions. Further, this practice likely contributes to
inventory items being declared as excess because actual demands are not
known to the wholesale inventory managers.

POTENTIAL PROVIDERS OF DEPOT MAINTENANCE-TYPE SERVICES MAINTENANCE PROGRAM
WITHIN THE CONTINENTAL UNITED STATES
===========================================================================

                                                        (continued)
------------------------------------------------------------------------
|                                   :       Number of personnel        |
|----------------------------------------------------------------------|
| Maintenance activity              :   Direct labor : Indirect labor  |
|----------------------------------------------------------------------|
| National Guard                    :                :                 |
|----------------------------------------------------------------------|
| CSMS Montgomery, Ala.             :             92 :             19  |
|----------------------------------------------------------------------|
| CSMS Windsor Locks, Conn.         :             33 :             14  |
|----------------------------------------------------------------------|
| CSMS New Castle, Del.             :             10 :              4  |
|----------------------------------------------------------------------|
| CSMS Starke, Fla.                 :             57 :             14  |
|----------------------------------------------------------------------|
| CSMS Atlanta, Ga.                 :             61 :             17  |
|----------------------------------------------------------------------|
| CSMS Springfield, Ill.            :             36 :             11  |
|----------------------------------------------------------------------|
| CSMS Riverside, Ill.              :             27 :              9  |
|----------------------------------------------------------------------|
| CSMS Indianapolis, Ind.           :             66 :             15  |
|----------------------------------------------------------------------|
| CSMS Frankfort, Ky.               :             49 :             13  |
|----------------------------------------------------------------------|
| CSMS Pineville, La.               :             75 :             17  |
|----------------------------------------------------------------------|
| CSMS Augusta, Maine               :             26 :              9  |
|----------------------------------------------------------------------|
| CSMS Havre De Grace, Md.          :             42 :             10  |
|----------------------------------------------------------------------|
| CSMS Fort Devens, Mass.           :             69 :             13  |
|----------------------------------------------------------------------|
| CSMS Lansing, Mich.               :             65 :             19  |
|----------------------------------------------------------------------|
| CSMS Hattiesburg, Miss.           :             99 :             28  |
|----------------------------------------------------------------------|
| CSMS Concord, N.H.                :             12 :              5  |
|----------------------------------------------------------------------|
| CSMS Bordentown, N.J.             :             48 :              9  |
|----------------------------------------------------------------------|
| CSMS West Orange, N.J.            :             35 :              9  |
|----------------------------------------------------------------------|
| CSMS Peekskill, N.Y.              :             35 :             17  |
|----------------------------------------------------------------------|
| CSMS Staten Island, N.Y.          :             37 :             16  |
|----------------------------------------------------------------------|
| CSMS Rochester, N.Y.              :             39 :             11  |
|----------------------------------------------------------------------|
| CSMS Raleigh, N.C.                :             81 :             20  |
|----------------------------------------------------------------------|
| CSMS Newark, Ohio                 :             64 :             19  |
|----------------------------------------------------------------------|
| CSMS Annville, Pa.                :             86 :             17  |
|----------------------------------------------------------------------|
| CSMS Eastover, S.C.               :             85 :             27  |
|----------------------------------------------------------------------|
| CSMS Smyrna, Tenn.                :             85 :             17  |
|----------------------------------------------------------------------|
| CSMS Richmond, Va.                :             32 :             14  |
|----------------------------------------------------------------------|
| CSMS Point Pleasant, W.Va.        :             20 :              9  |
|----------------------------------------------------------------------|
| CSMS Edinburgh, Ind.              :             19 :              7  |
|----------------------------------------------------------------------|
| CSMS Cullman, Ala.                :             50 :             18  |
|----------------------------------------------------------------------|
| CSMS Coraopolis, Pa.              :             26 :              6  |
|----------------------------------------------------------------------|
| MATES Fort Stewart, Ga.           :            152 :             48  |
|----------------------------------------------------------------------|
| MATES Camp Grayling, Mich.        :             57 :             21  |
|----------------------------------------------------------------------|
|                                   :       Number of personnel        |
|----------------------------------------------------------------------|
| Maintenance activity              :   Direct labor : Indirect labor  |
|----------------------------------------------------------------------|
| MATES Fort Polk, La.              :             88 :             19  |
|----------------------------------------------------------------------|
| MATES Fort Pickett, Va.           :             86 :             24  |
|----------------------------------------------------------------------|
| MATES Fort Knox, Ky.              :             47 :             20  |
|----------------------------------------------------------------------|
| MATES Fort Bragg, N.C.            :             95 :             28  |
|----------------------------------------------------------------------|
| MATES Fort Drum, N.Y.             :             69 :             28  |
|----------------------------------------------------------------------|
| CSMS Phoenix, Ariz.               :             42 :              8  |
|----------------------------------------------------------------------|
| CSMS Little Rock, Ark.            :             69 :             18  |
|----------------------------------------------------------------------|
| CSMS Stockton, Calif.             :             45 :             28  |
|----------------------------------------------------------------------|
| CSMS Long Beach, Calif.           :             65 :             13  |
|----------------------------------------------------------------------|
| CSMS Longmont, Colo.              :             26 :             10  |
|----------------------------------------------------------------------|
| CSMS Boise, Idaho                 :             57 :             33  |
|----------------------------------------------------------------------|
| CSMS Johnston, Iowa               :             53 :             16  |
|----------------------------------------------------------------------|
| CSMS Topeka, Kans.                :             26 :             10  |
|----------------------------------------------------------------------|
| CSMS Little Falls, Minn.          :             68 :             14  |
|----------------------------------------------------------------------|
| CSMS Jefferson City, Mo.          :             58 :             15  |
|----------------------------------------------------------------------|
| CSMS Helena, Mont.                :             27 :              8  |
|----------------------------------------------------------------------|
| CSMS Lincoln, Nebr.               :             20 :             13  |
|----------------------------------------------------------------------|
| CSMS Santa Fe, N. Mex.            :             43 :              8  |
|----------------------------------------------------------------------|
| CSMS Norman, Okla.                :             51 :             18  |
|----------------------------------------------------------------------|
| CSMS Clackamus, Oreg.             :             70 :             17  |
|----------------------------------------------------------------------|
| CSMS Mitchell, S. Dak.            :             22 :              9  |
|----------------------------------------------------------------------|
| CSMS Fort Worth, Tex.             :             61 :             22  |
|----------------------------------------------------------------------|
| CSMS Austin, Tex.                 :             79 :             20  |
|----------------------------------------------------------------------|
| CSMS Draper, Utah                 :             42 :             19  |
|----------------------------------------------------------------------|
| CSMS Tacoma, Wash.                :             47 :             19  |
|----------------------------------------------------------------------|
| CSMS Camp Douglas, Wis.           :             51 :             16  |
|----------------------------------------------------------------------|
| CSMS Rapid City, S. Dak.          :              9 :              6  |
|----------------------------------------------------------------------|
| MATES Colorado Springs, Colo.     :             27 :             15  |
|----------------------------------------------------------------------|
| MATES San Miguel, Calif.          :            159 :             29  |
|----------------------------------------------------------------------|
| MATES Fort Irwin, Calif.          :             69 :             23  |
|----------------------------------------------------------------------|
| MATES Fort Sill, Okla.            :             17 :              6  |
|----------------------------------------------------------------------|
| MATES Fort Hood, Tex.             :            190 :             49  |
|----------------------------------------------------------------------|
| MATES Yakima, Wash.               :            125 :             45  |
|----------------------------------------------------------------------|
| MATES Sparta, Wis.                :             45 :             21  |
|----------------------------------------------------------------------|
| MATES Fort Riley, Kans.           :             84 :             23  |
|----------------------------------------------------------------------|
| AVCRD Gulfport, Miss.             :             84 :             21  |
|----------------------------------------------------------------------|
|                                   :       Number of personnel        |
|----------------------------------------------------------------------|
| Maintenance activity              :   Direct labor : Indirect labor  |
|----------------------------------------------------------------------|
| AVCRD Groton. Conn.               :            105 :             26  |
|----------------------------------------------------------------------|
| AVCRD Springfield, Mo.            :            100 :             25  |
|----------------------------------------------------------------------|
| AVCRD Fresno, Calif.              :             81 :             20  |
|----------------------------------------------------------------------|
| Army Reserve                      :                :                 |
|----------------------------------------------------------------------|
| DOL Fort Dix, N.J.                :             19 :             21  |
|----------------------------------------------------------------------|
| DOL Fort McCoy, Wis.              :             59 :             34  |
|----------------------------------------------------------------------|
| Active Army-government operated   :                :                 |
|----------------------------------------------------------------------|
| DOL Fort Bragg, N.C.              :             90 :             88  |
|----------------------------------------------------------------------|
| GS MAINT Fort Bragg, N.C.         :            215 :            104  |
|----------------------------------------------------------------------|
| DOL Fort Benning, Ga.             :             18 :            251  |
|----------------------------------------------------------------------|
| DOL Fort Campbell, Ky.            :             55 :             81  |
|----------------------------------------------------------------------|
| DOL Fort Drum, N.Y.               :             56 :             44  |
|----------------------------------------------------------------------|
| DOL Fort Eustis, Va.              :             57 :             53  |
|----------------------------------------------------------------------|
| DOL Fort Gordon, Ga.              :             66 :             51  |
|----------------------------------------------------------------------|
| DOL Fort Jackson, S.C.            :             24 :             55  |
|----------------------------------------------------------------------|
| DOL Fort Knox, Ky.                :             29 :            133  |
|----------------------------------------------------------------------|
| DOL Fort Lee, Va.                 :             13 :             34  |
|----------------------------------------------------------------------|
| DOL Fort Polk, La.                :            231 :             67  |
|----------------------------------------------------------------------|
| DOL Fort Rucker, Ala.             :             47 :             25  |
|----------------------------------------------------------------------|
| DOL Fort Stewart, Ga.             :             61 :             70  |
|----------------------------------------------------------------------|
| DOL Fort Bliss, Tex.              :             66 :            154  |
|----------------------------------------------------------------------|
| DOL Fort Carson, Colo.            :             95 :             51  |
|----------------------------------------------------------------------|
| DOL Fort Huachuca, Ariz.          :             87 :             18  |
|----------------------------------------------------------------------|
| DOL Fort Hood, Tex.               :            113 :            139  |
|----------------------------------------------------------------------|
| GS MAINT Fort Hood, Tex.          :            120 :            147  |
|----------------------------------------------------------------------|
| DOL Fort Leonard Wood, Mo.        :             55 :             62  |
|----------------------------------------------------------------------|
| DOL Fort Riley, Kans.             :            158 :             55  |
|----------------------------------------------------------------------|
| DOL Fort Sill, Okla.              :            101 :             36  |
|----------------------------------------------------------------------|
| Active Army-contractor operated   :                :                 |
|----------------------------------------------------------------------|
| DOL Fort Campbell, Ky.            :             48 :             11  |
|----------------------------------------------------------------------|
| DOL Fort Stewart, Ga.             :             29 :             29  |
|----------------------------------------------------------------------|
| DOL Fort Bragg, N.C.              :             27 :              3  |
|----------------------------------------------------------------------|
| DOL Fort Bliss, Tex.              :             34 :              8  |
|----------------------------------------------------------------------|
| DOL Fort Hood, Tex.               :            125 :             93  |
|----------------------------------------------------------------------|
| DOL Fort Polk, La.                :             51 :              9  |
|----------------------------------------------------------------------|
| DOL Fort Sill, Okla.              :            106 :             69  |
------------------------------------------------------------------------

DOL--Directorate of Logistics

CSMS--Consolidated Support Maintenance Shop

MATES--Maneuver Area Training Site 

GS Maint--General Support Maintenance Companies (active duty military)

AVCRAD--Aviation Classification Repair Activity Depot

Source: U.S. Army Materiel Command.

LOCAL MAINTENANCE FACILITIES AND DEPOTS VISITED BY GAO
======================================================

--------------------------------------------------------------------------
| Location      : Organization: Governm : Contrac : Facility :     Year  |
|               :             :     ent :     tor :  size in : facility  |
|               :             :   staff :   staff :   square :           |
|               :             :         :         :     feet : construc  |
|               :             :         :         :          :     ted/  |
|               :             :         :         :          : renovated |
|------------------------------------------------------------------------|
| Fort Bliss,   : DOL-Surface :     113 :       6 :  160,747 :     1997  |
| Texas         :             :         :         :          :           |
|------------------------------------------------------------------------|
| Fort Hood,    : DOL-Surface :     188 :       0 :  462,000 : 1980/199  |
| Texas         :             :         :         :          :       0s  |
|------------------------------------------------------------------------|
|               : DOL-Aviation:       0 :     385 :  211,000 :    1970s  |
|------------------------------------------------------------------------|
|               : National    :     243 :       0 :  252,000 : 1980/199  |
|               : Guard MATES :         :         :          :       2   |
|------------------------------------------------------------------------|
|               : 190th       :     267 :      10 :   33,848 :     1958  |
|               : General     :         :         :          :           |
|               : Support     :         :         :          :           |
|------------------------------------------------------------------------|
| Fort Riley,   : DOL-Surface :      10 :     139 :  186,000 :    1980s  |
| Kansas        :             :         :         :          :           |
|------------------------------------------------------------------------|
|               : National    :      83 :       0 :  130,000 : 1981/1993 |
|               : Guard MATES :         :         :          :           |
|------------------------------------------------------------------------|
| Fort Polk,    : DOL-Surface :     220 :       9 :  175,673 :     1995  |
| Louisiana     :             :         :         :          :           |
|------------------------------------------------------------------------|
|               : DOL-Aviation:       1 :      59 :  250,600 :     1989  |
|------------------------------------------------------------------------|
|               : National    :     106 :       0 :  207,119 : 1976/1995 |
|               : Guard MATES :         :         :          :           |
|------------------------------------------------------------------------|
| Fort Bragg,   : DOL-Surface :     165 :      18 :  318,000 :     1994  |
| North Carolina:             :         :         :          :           |
|------------------------------------------------------------------------|
|               : DOL-Aviation:      21 :      30 :  115,000 :     1995  |
|------------------------------------------------------------------------|
|               : National    :     116 :       0 :   87,500 :     1992  |
|               : Guard MATES :         :         :          :           |
|------------------------------------------------------------------------|
| Mississippi   : AVCRAD-     :     112 :      31 :  356,000 :     1988  |
| National Guard: Gulfport    :         :         :          :           |
|------------------------------------------------------------------------|
|               : Camp        :      93 :       0 :   79,301 :     1995  |
|               : Shelby- CSMS:         :         :          :           |
|------------------------------------------------------------------------|
|               : Camp        :      63 :       0 :  113,598 : 1940s/19  |
|               : Shelby- GSM :         :         :          :       99  |
|------------------------------------------------------------------------|
|               : Camp        :     108 :       0 :  138,000 :     1983  |
|               : Shelby-     :         :         :          :           |
|               : MATES       :         :         :          :           |
|------------------------------------------------------------------------|
| Anniston      : Maintenance :   1,771 :       0 : 1,392,000: 1950s/19  |
| Army Depot    :  depot      :         :         :          :      90s  |
|------------------------------------------------------------------------|
| Corpus        : Maintenance :   2,690 :      88 : 2,119,652: 1941/1999 |
| Christi Army  :  depot      :         :         :          :           |
| Depot         :             :         :         :          :           |
|------------------------------------------------------------------------|
| Letterkenny   : Maintenance :   1,090 :       0 :  894,232 : 1940s/19  |
| Army Depot    :  depot      :         :         :          :      90s  |
|------------------------------------------------------------------------|
| Red River     : Maintenance :     841 :      25 :  556,262 : 1940s/19  |
| Army Depot    :  depot      :         :         :          :      80s  |
|------------------------------------------------------------------------|
| Tobyhanna     : Maintenance :   2,506 :       0 : 1,400,000: 1951/1994 |
| Army Depot    :  depot      :         :         :          :           |
--------------------------------------------------------------------------

DOL--Directorate of Logistics

AVCRAD--Aviation Classification Repair Activity Depot

MATES--Maneuver Area Training Equipment Sites

CSMS--Consolidated Support Maintenance Shop

GSM--General Support Maintenance

COMMENTS FROM THE DEPARTMENT OF DEFENSE
=======================================

*****************

*****************

*****************

*****************

GAO CONTACTS AND STAFF ACKNOWLEDGMENTS
======================================

GAO Contacts

Barry Holman, (202) 512-8412
Julia Denman, (202) 512-8412

Acknowledgments

In addition to those named above, Glenn Knoepfle, David Epstein, Bonnie
Carter, Paul Newton, Edward Waytel, David Marks, and Kate Monahan made key
contributions to this report.

RELATED GAO PRODUCTS
====================

Depot Maintenance: Status of the Navy's Pearl Harbor Pilot Project
(GAO/NSIAD-99-199, Sept. 10, 1999).

Depot Maintenance: Maintenance of T700 Series Engines for U.S. Forces in
Korea (GAO/NSIAD-99-234R, Aug. 13, 1999).

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

Air Force Logistics: C-17 Support Plan Does Not Adequately Address Key
Issues (GAO/NSIAD-99-147, July 8, 1999).

Army Logistics: Status of Proposed Support Plan for Appache Helicopter
(GAO/NSIAD-99-140, July 1, 1999). 

Air Force Depot Maintenance: Management Changes Would Improve
Implementation of Reform Initiatives (GAO/NSIAD-99-63, June 25, 1999).

Public-Private Competitions: Reasonable Processes Used for San Antonio
Engine Depot Maintenance Award (GAO/NSIAD-99-155, May 27, 1999).

Public-Private Competitions: Reasonable Processes Used for Sacramento
Depot Maintenance Award (GAO/NSIAD-99-124, May 12, 1999).

Navy Ship Maintenance: Allocation of Ship Maintenance Work in the Norfolk,
Virginia, Area (GAO/NSIAD-99-54, Feb. 24, 1999).

Army Industrial Facilities: Workforce Requirements and Related Issues
Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30, 1998).

Navy Depot Maintenance: Weaknesses in the T406 Engine Logistics Support
Decision (GAO/NSIAD-98-221, Sept. 14, 1998). 

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

Defense Depot Maintenance: Contracting Approaches Should Address Workload
Characteristics (GAO/NSIAD-98-130, June 15, 1998).

Defense Depot Maintenance: Use of Public-Private Partnering Arrangements
(GAO/NSIAD-98-91, May 7, 1998).

Navy Ship Maintenance: Temporary Duty Assignments of Temporarily Excess
Shipyard Personnel Are Reasonable (GAO/NSIAD-98-93, Apr. 21, 1998).

Public-Private Competitions: DOD's Additional Support for Combining Depot
Workloads Contains Weaknesses (GAO/NSIAD-98-143, Apr. 17, 1998).

Defense Depot Maintenance: DOD Shifting More Workload for New Weapon
Systems to the Private Sector (GAO/NSIAD-98-8, Mar. 31, 1998).

Depot Maintenance: Lessons Learned From Transferring Alameda Naval
Aviation Depot Engine Workloads (GAO/NSIAD-98-10BR, Mar. 25, 1998).

Force Structure: Army's Efforts to Improve Efficiency of Institutional
Forces Have Produced Few Results (GAO/NSIAD-98-65, Feb. 26, 1998).

Defense Depot Maintenance: Information on Public and Private Sector
Workload Allocations (GAO/NSIAD-98-41, Jan. 20, 1998).

Outsourcing DOD Logistics: Savings Achievable but Defense Science Board's
Projections Are Overstated (GAO/NSIAD-98-48, Dec. 8, 1997).

Navy Regional Maintenance: Substantial Opportunities Exist to Build on
Infrastructure Streamlining Progress (GAO/NSIAD-98-4, Nov. 13, 1997).

Defense Depot Maintenance: Challenges Facing DOD in Managing Working
Capital Funds (GAO/T-NSIAD/AIMD-97-152, May 7, 1997).

Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in
Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-112,
May 1, 1997) and (GAO/T-NSIAD-97-111, Mar. 18, 1997). 

Defense Outsourcing: Challenges Facing DOD as It Attempts to Save Billions
in Infrastructure Costs (GAO/T-NSIAD-97-110, Mar. 12, 1997).

High-Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997).

Army Depot Maintenance: Privatization Without Further Downsizing Increases
Costly Excess Capacity (GAO/NSIAD-96-201, Sept. 18, 1996).

(709375)

*** End of document. ***