Army Depot Maintenance: Privatization Without Further Downsizing
Increases Costly Excess Capacity (Letter Report, 09/18/96,
GAO/NSIAD-96-201).

Pursuant to a congressional request, GAO reviewed the Army's plans to
reallocate depot maintenance workloads from depots recommended for
closure or realignment by the Defense Base Realignment and Closure
(BRAC) Commission, focusing on the: (1) impact on excess depot capacity
and operating costs at the remaining defense depots; (2)
cost-effectiveness of planned privatization options; and (3) Army's
compliance with statutory requirements.

GAO found that: (1) the Army has tentative plans to privatize
maintenance of tactical wheeled vehicle and troop support equipment, but
without further downsizing, excess capacity will remain; (2) the Army's
decision to privatize realigned depots instead of consolidating them
with other Army depots will not achieve the BRAC Commission's 20-year
savings projection of $953 million; (3) the transfer of 1.2 million
direct labor hours to the Anniston Army depot from two realigned depots
should increase Anniston's overall capacity utilization; (4)
consolidating the tactical missile workload at the Tobyhanna depot will
reduce excess capacity and decrease costs by as much as $27 million; and
(5) several statutes may affect the Army's privatization efforts.

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

 REPORTNUM:  NSIAD-96-201
     TITLE:  Army Depot Maintenance: Privatization Without Further 
             Downsizing Increases Costly Excess Capacity
      DATE:  09/18/96
   SUBJECT:  Base closures
             Military cost control
             Military downsizing
             Privatization
             Military land vehicles
             Base realignments
             Facility transfer
             Equipment maintenance
             Cost effectiveness analysis
             Military materiel
IDENTIFIER:  Bradley Fighting Vehicle