Depot Maintenance: Lessons Learned From Transferring Alameda Naval
Aviation Depot Engine Workloads (Briefing Report, 03/25/98,
GAO/NSIAD-98-10BR).

Pursuant to a congressional request, GAO reviewed the readiness
implications of moving critical maintenance workloads from closing
military depots to remaining depots.

GAO noted that: (1) the transfer of Alameda's depot maintenance
workloads to the Jacksonville and San Antonio depots was not executed in
the most efficient manner; (2) both receiving depots experienced
production delays and increased costs, but they could not be quantified;
(3) there was an impact on reported unit readiness; however, it was not
widespread; (4) based on the Navy's and Air Force's experience in moving
the Alameda workloads, several lessons learned have been identified to
mitigate future workload transfer problems; (5) according to Navy and
Air Force officials, the delays and increased costs were attributable to
a variety of factors, including competing priorities between the gaining
and losing facilities, unidentified equipment and retooling
requirements, lack of spare parts in the Navy supply system, limited Air
Force access to Navy parts supply system, outdated technical data,
personnel equipment certification requirements, and shortfall in skilled
Alameda workers accepting transfers to the receiving depots; (6)
officials noted that the Alameda workload transition was further
complicated by the subsequent decision to close the San Antonio Air
Logistics Center; (7) GAO's examination of readiness reports submitted
before, during, and after the transition period for 114 Air Force and
Navy units using the engines, shows that the transition problems
encountered in moving the maintenance workloads to Jacksonville and San
Antonio had minimal impact on equipment readiness; (8) of the 57 Navy
units examined, only 2 reported lowered equipment readiness rates based
on depot maintenance problems with the transferred engines; (9)
according to Navy officials, extraordinary steps, including the removal
of engines from nonoperational aircraft, were taken to minimize the
impacts of transition problems on reported equipment readiness; (10)
none of the 57 Air Force units GAO reviewed reported adverse readiness
impacts from the transition of engine maintenance workloads; (11)
maintenance workloads can be transitioned without impacting equipment
readiness if the transition is properly planned and effectively
implemented; (12) while detailed plans were prepared to move the
workloads from Alameda to Jacksonville and San Antonio, problems arose
during the transitions' implementation phase; and (13) Air Force and
Navy officials offered several lessons learned to mitigate these
problems in future workload transitions.

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

 REPORTNUM:  NSIAD-98-10BR
     TITLE:  Depot Maintenance: Lessons Learned From Transferring 
             Alameda Naval Aviation Depot Engine Workloads
      DATE:  03/25/98
   SUBJECT:  Aircraft maintenance
             Military inventories
             Military facilities
             Aircraft engines
             Combat readiness
             Base closures
             Naval supplies
             Inventory control systems
             Defense contingency planning
             Data integrity
IDENTIFIER:  T-56 Engine
             T-34 Turbine Engine
             C-130 Aircraft
             E-2 Aircraft
             A-10 Aircraft
             P-3 Aircraft
             S-3 Aircraft
             
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Cover
================================================================ COVER


Briefing Report to the Honorable
Kay Bailey Hutchison, U.S.  Senate

March 1998

DEPOT MAINTENANCE - LESSONS
LEARNED FROM TRANSFERRING ALAMEDA
NAVAL AVIATION DEPOT ENGINE
WORKLOADS

GAO/NSIAD-98-10BR

Depot Maintenance

(709274)


Abbreviations
=============================================================== ABBREV

  BRAC - Base Closure and Realignment Commission

Letter
=============================================================== LETTER


B-278920

March 25, 1998

The Honorable Kay Bailey Hutchison
United States Senate

Dear Senator Hutchison: 

This report responds to your request that we review the readiness
implications of moving critical maintenance workloads from closing
military depots to remaining depots.  Specifically, the report
addresses the problems, readiness implications, and lessons learned
associated with moving the engine maintenance workloads from the
closing Alameda Naval Aviation Depot to the Jacksonville Naval
Aviation Depot and the San Antonio Air Logistics Center. 

We briefed your staff on the results of our work on November 18,
1997.  This report summarizes and updates the information presented
at that briefing. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The Base Closure and Realignment Commission's July 1993
recommendations for base closures and realignments included closing
three of the Navy' six aviation depots.  One of these was the Alameda
Naval Aviation Depot, California.  Accordingly, the maintenance
workloads performed at those facilities were redistributed to
remaining depots operated by the Navy and other services.  The
Alameda depot performed maintenance on the TF34 turbine engine, used
by the Navy on the S-3 aircraft and by the Air Force on the A-10
aircraft, and the Navy's version of the T56 turbine engine used on
C-130, P-3, and E-2 aircraft. 

The Alameda workload for the TF34 engines was transferred to the
Jacksonville Naval Aviation Depot, Florida, and the T56 engine
workload was added to the existing Air Force T56 workload at the San
Antonio Air Logistics Center, Texas.  The transition of maintenance
capability to these facilities began in June 1994 and was completed
by May 1996. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The transfer of Alameda's depot maintenance workloads to the
Jacksonville and San Antonio depots was not executed in the most
efficient manner.  Both receiving depots experienced production
delays and increased costs, but they could not be quantified.  There
was an impact on reported unit readiness; however, it was not
widespread.  Based on the Navy's and Air Force's experience in moving
the Alameda workloads, several lessons learned have been identified
to mitigate future workload transfer problems. 

According to Navy and Air Force officials, the delays and increased
costs were attributable to a variety of factors, including competing
priorities between the gaining and losing facilities, unidentified
equipment and retooling requirements, lack of spare parts in the Navy
supply system, limited Air Force access to Navy parts supply system,
outdated technical data, personnel and equipment certification
requirements, and shortfall in skilled Alameda workers accepting
transfers to the receiving depots.  Air Force and Navy officials also
noted that the Alameda workload transition was further complicated by
the subsequent decision to close the San Antonio Air Logistics
Center. 

Our examination of readiness reports submitted before, during, and
after the transition period for 114 Air Force and Navy units using
the engines, shows that the transition problems encountered in moving
the maintenance workloads to Jacksonville and San Antonio had minimal
impact on equipment readiness. 

Of the 57 Navy units examined, only two reported lowered equipment
readiness rates based on depot maintenance problems with the
transferred engines.  According to Navy officials, extraordinary
steps, including the removal of engines from nonoperational aircraft,
were taken to minimize the impacts of transition problems on reported
equipment readiness.  None of the 57 Air Force units we reviewed
reported adverse readiness impacts from the transition of engine
maintenance workloads. 

Maintenance workloads can be transitioned without impacting equipment
readiness if the transition is properly planned and effectively
implemented.  While detailed plans were prepared to move the
workloads from Alameda to Jacksonville and San Antonio, problems
arose during the transitions' implementation phase.  Air Force and
Navy officials offered several lessons learned to mitigate these
problems in future workload transitions.  They included hiring key
personnel in-place at closing activities to provide a more orderly
transition and ensuring that all technical data, which are critical
to establishing production capability and meeting production
schedules, are updated and provided to the gaining activity. 

Details of our work are presented in briefing sections I, II, and
III. 


   CONCLUSIONS AND RECOMMENDATION
------------------------------------------------------------ Letter :3

Both the Navy and Air Force experienced problems and difficulties in
transitioning the workloads from the closing Alameda Naval Aviation
Depot.  Although these problems resulted in some production delays
and increased costs, the impact on readiness was limited.  The
problems and difficulties experienced with transferring the Alameda
workloads are not inherent in workload transfers and can be avoided
or substantially reduced through improved planning and management. 
Accordingly, we recommend that the Secretary of Defense share among
the military services the lessons learned from closing and
transferring workloads from Alameda and other depots. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :4

The Department of Defense agreed with our findings and recommendation
(see app.  I).  They provided written comments dealing primarily with
technical accuracy and clarification issues.  We have revised the
report, as appropriate, to respond to these comments. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :5

We met with officials from the Office of the Secretary of Defense,
the Army, the Navy, and the Air Force to identify and discuss any
problems associated with the Alameda transfer and the extent they
were unique or reflected systemic weaknesses associated with other
prior transitions.  We also interviewed former Alameda Naval Aviation
Depot officials to obtain their views on the maintenance workload
transfer. 

We visited San Antonio and Jacksonville to document the transition
experience and to solicit opinions as to what could have made the
transition less of a problem to all parties concerned.  Further, we
obtained their assessments as to the impact of the identified
problems on the maintenance workload transition. 

To determine whether the problems associated with the transition from
Alameda impacted the operational readiness of units in the field, we
selected 114 Air Force and Navy units that used the T56 and TF34
engines before, during, and after the transition occurred.  We
analyzed the monthly readiness reports for 57 Air Force units and 57
Navy units from October 1993 through July 1997 to determine if any
degradation in equipment readiness had been attributed to depot
maintenance problems.  While we have previously reported that the
Department of Defense readiness reporting system lacks emphasis on
long-term readiness and uses insufficient indicators to ensure a
comprehensive assessment, at the present time, it provides the best
readiness data available.\1

We conducted our review between June and December 1997 in accordance
with generally accepted government auditing standards. 


--------------------
\1 Military Readiness:  DOD Needs to Develop a More Comprehensive
Measurement System (GAO/NSIAD-95-29, Oct.  27, 1994). 


---------------------------------------------------------- Letter :5.1

We are sending copies of this report to the Secretaries of Defense,
the Army, the Air Force, and the Navy; the Director, Office of
Management and Budget; and interested congressional committees. 
Copies will be made available to others upon request.  If you have
any questions, please contact me at (202) 512-8412.  Major
contributors to this report are listed in appendix I. 

Sincerely yours,

David R.  Warren
Director, Defense Management Issues


Briefing Section I ALAMEDA
TRANSITION PROBLEMS
============================================================== Letter 



   (See figure in printed
   edition.)


   ALAMEDA TRANSITION TO
   JACKSONVILLE AND SAN
   ANTONIO--OVERALL ASSESSMENT
------------------------------------------------------------ Letter :6


The transition of the TF34 and T56 engine workloads from the Alameda
Naval Aviation Depot to the Jacksonville Naval Aviation Depot and the
San Antonio Air Logistics Center, respectively, took longer than
originally anticipated and was not executed in the most efficient
manner.  During the transfer, significant productivity and quality
problems occurred at the gaining depots and the costs associated with
establishing production capability were higher than expected. 
Neither the Air Force nor the Navy could quantify the increased costs
to establish maintenance capability or the delays that the problems
caused.  They did, however, provide examples demonstrating the extent
to which the identified problems affected cost and/or the time
required to achieve production capability. 



   (See figure in printed
   edition.)


   COMMAND SUPPORT
------------------------------------------------------------ Letter :7


According to Jacksonville and San Antonio officials, a lack of
coordination and cooperation with Alameda officials affected all
aspects of establishing production capability at their facilities. 
The former Alameda commander agreed that disagreements over workload
transition priorities affected establishment of production
capabilities at the gaining facilities.  Jacksonville and San Antonio
officials stated that access to the Alameda production lines was not
provided; local maintenance instructions were not shared; equipment
tooling criteria were not provided; and delays occurred in shipping
needed equipment from Alameda to the gaining activities.  Officials
from Jacksonville and San Antonio told us that there was no single
focal point from which to seek assistance in resolving these
differences.  Jacksonville officials determined that the problems
impacted both the cost and time required to establish production
capability, but had not quantified these impacts. 



   (See figure in printed
   edition.)


   EQUIPMENT TRANSFERS
------------------------------------------------------------ Letter :8


According to the former Alameda commander, representatives from all
gaining activities were invited to visit Alameda, but insufficient
Base Closure and Realignment Commission (BRAC) funding limited the
number of site survey teams that could visit.  Jacksonville and San
Antonio officials told us that limited access to the Alameda
production lines resulted in some equipment needed to establish
production capability not being identified.  For example, the Navy
had developed customized equipment to perform specific processes on
the Navy T56 engines.  However, San Antonio officials said that they
did not become aware of the special equipment requirements until
after the Navy T56 production line was established at their facility. 
They had to then obtain the needed equipment or develop alternate
procedures to accomplish the required tasks.  Jacksonville officials
also noted that worn production equipment transferred from Alameda
required over 7,000 hours of retooling and repair to make the
production line fully operational.  In addition, they stated that
Alameda personnel advised Jacksonville officials that some equipment
already in use at Jacksonville would also satisfy repair requirements
for the TF34 engines.  However, Jacksonville officials discovered
that their equipment had to be retooled to meet the new requirements. 
Jacksonville officials noted that retooling and developing work
arounds resulted in higher than anticipated costs and delayed
establishment of production capability. 



   (See figure in printed
   edition.)


   PARTS PROCUREMENT--NAVY
------------------------------------------------------------ Letter :9


According to Jacksonville officials, parts from the Navy supply
system were unavailable.  They noted that, in some cases, the Alameda
Naval Aviation Depot had used commercial sources to obtain parts. 
The former Alameda commander told us that when the Navy supply system
was unable to satisfy their requirements, they did obtain parts from
commercial sources.  Since the Navy supply system is based on
historical usage to meet anticipated future demands, it was not
prepared to respond to Jacksonville's requests for parts that Alameda
had been purchasing from commercial sources.  According to the former
Alameda commander, Jacksonville production managers chose not to
pursue commercial solutions and, in some instances, it took up to 20
months for the Navy system to catch up with the demand. 

A Jacksonville official told us that if they had been aware of
Alameda's reliance on commercial sources earlier in the transition,
they could have made similar arrangements to purchase parts
commercially. 



   (See figure in printed
   edition.)


   PARTS PROCUREMENT--AIR FORCE
----------------------------------------------------------- Letter :10

According to San Antonio Air Logistics Center officials, the Navy
supply system did not recognize the Air Force depot as a valid user. 
As a result, the depot's requests for Navy-managed T56 parts were
rejected.  To obtain needed parts, the Air Force depot had to
circumvent the established Navy process by requisitioning parts
manually (or person-to-person) rather than using the automated
procedures.  This caused unnecessary delays in obtaining needed
parts. 




   (See figure in printed
   edition.)


   TECHNICAL DATA TRANSFERS
----------------------------------------------------------- Letter :11


According to San Antonio Air Logistics Center engine maintenance
officials, depot maintenance technical data provide detailed
instructions on procedures necessary to accomplish each required
repair task.  The technical data also identifies the type and number
of parts required and dictate how often each part will be replaced
during the repair process.  Jacksonville and San Antonio officials
told us that the technical data used by the Alameda personnel in
repairing the TF34 and T56 engines had not been updated to reflect
changes in procedures.  For example, the technical data did not
reflect current repair labor hours required to accomplish each task. 
San Antonio officials told us that, as a result, they underestimated
the hours needed to meet established production schedules.  San
Antonio officials further noted that the technical data issues took
an inordinately long time to solve, cost more than anticipated, and
resulted in significant delays in establishing production capability. 
Jacksonville officials told us that the replacement frequencies (how
often a part is replaced during an overhaul process) for TF34 parts
were so out of date that they had to be completely revised.  When
requisitions were made based on the updated frequencies, the supply
system was unable to meet the demand. 

Jacksonville officials told us that, in addition to the technical
data, Alameda employees had developed local instructions for
completing some tasks.  These local instructions were not provided to
the gaining activities during the workload transition.  As a result,
the gaining activities were not aware of current procedures for
performing the repairs. 



   (See figure in printed
   edition.)


   CERTIFICATION OF PERSONNEL AND
   EQUIPMENT
----------------------------------------------------------- Letter :12


According to Air Force and Navy officials the engine repair
certification requirements increased the time and cost of the
workload transition.  The Air Force and Navy each had unique
maintenance tasks to be performed on the TF34 and T56 engines, in
addition to the tasks common to both services.  The Air Force
required 100-percent certification of all overhaul tasks, both Air
Force unique and common, required on the Air Force TF34 engine and
engine components at Jacksonville Naval Aviation Depot.  According to
Jacksonville officials, the certification should have been confined
to those tasks unique to the Air Force TF34 engine.  Many of the
overhaul tasks required on the TF34 were already performed on other
engines repaired at Jacksonville.  According to Jacksonville
officials, the requirement for 100-percent certification was
compounded by the lack of Air Force engineering support.  In
contrast, the Navy required the San Antonio Air Logistics Center to
certify those T56 processes that were Navy-unique.  However, the Navy
processes were substantially different from the Air Force processes
and still caused significant delays in establishing production
capability at the Air Logistics Center. 



   (See figure in printed
   edition.)


   PERSONNEL SHORTFALLS
----------------------------------------------------------- Letter :13


Jacksonville and San Antonio officials told us that they offered
skilled personnel at Alameda opportunities to transfer with the TF34
and T56 engine workloads.  However, neither facility was able to
recruit the full complement of skilled personnel desired.  Thirty-two
of the 43 Alameda employees offered transfers to Jacksonville to work
on the TF34 engines accepted the offer.  Jacksonville officials told
us that the shortfall of 11 employees had an impact on establishing
production capability, but it was not significant.  San Antonio
offered transfer opportunities to 50 Alameda personnel associated
with the T56 engine workload, but only 18 employees transferred. 
According to the former Alameda commander, more Alameda employees
intended to transfer to San Antonio until they found out that San
Antonio itself was targeted for closure in 1995.  San Antonio
officials told us that they were able to retain San Antonio personnel
with the needed skills who would have otherwise been dismissed as a
result of downsizing actions. 



   (See figure in printed
   edition.)


   1995 BRAC DECISIONS COMPLICATED
   ONGOING WORKLOAD TRANSITIONS
----------------------------------------------------------- Letter :14


In 1995, prior to completion of the T56 engine workload transition,
the BRAC recommended that the San Antonio Air Logistics Center be
closed and its workload be transferred to remaining depots or
private-sector commercial activities.  To mitigate the impact of the
closing on the local community and center employees, the
administration, in 1995, announced its decision to maintain certain
employment levels at this location.  Privatization-in-place was one
of the initiatives to be used in achieving these employment goals. 
Since that decision, there has been a continuing debate between
Congress and the administration over the process for deciding where,
and by whom, the workloads would be performed.  Based on
congressional concerns raised in 1996, the Air Force revised its
privatization-in-place plans to provide for competitions between the
public and private sectors as a means to decide where the depot
maintenance workloads will be performed.  A San Antonio Air Logistics
Center BRAC official told us that being placed on the 1995 closure
list complicated the transition of the T56 engine workload. 


Briefing Section II ALAMEDA
TRANSITION READINESS IMPLICATIONS
============================================================== Letter 



   (See figure in printed
   edition.)


   READINESS IMPLICATIONS--OVERALL
   ASSESSMENT
----------------------------------------------------------- Letter :15

Both Jacksonville and San Antonio experienced higher than anticipated
costs and delays in establishing production capability for the T56
and TF34 engines.  However, according to the unit readiness reports
we reviewed, readiness impacts were not widespread. 




   (See figure in printed
   edition.)


   TF34 TRANSITION TO JACKSONVILLE
----------------------------------------------------------- Letter :16


We examined 27 units--12 Navy and 15 Air Force--that used the TF34
engine and reported readiness during the 46-month evaluation period. 
We found that 2 of the 12 Navy units examined attributed periods of
equipment readiness below mission capable to "unavailable engines."
Both of these units reported equipment readiness as mission capable
during the transition, but reported readiness levels lower than
mission capable after the transition period.  Although the lower
readiness rates occurred after the transition, a Navy official told
us that the engines were unavailable due to the transition.  In
addition, Navy readiness officials told us that they took
extraordinary steps to maintain mission capable status.  The
extraordinary efforts included removing engines from aircraft in
depot maintenance to use on aircraft assigned to active or reserve
units. 



   (See figure in printed
   edition.)


   T56 TRANSITION TO SAN ANTONIO
----------------------------------------------------------- Letter :17

We examined 87 C-130, P-3, and E-2 units--45 Navy and 42 Air
Force--that reported readiness during the 46-month evaluation period. 
One of the 87 units reported engine readiness levels lower than
mission capable due to a shortage of spare engines.  However, this
occurred prior to the T56 transition period and lasted for only 1
month. 


Briefing Section III ALAMEDA
TRANSITION LESSONS LEARNED
============================================================== Letter 



   (See figure in printed
   edition.)


   LESSONS LEARNED
----------------------------------------------------------- Letter :18


Maintenance workloads can be transitioned without impacting equipment
readiness if the transition is properly planned and effectively
implemented.  While detailed plans were prepared to move the
workloads from Alameda to Jacksonville and San Antonio, problems
arose during the implementation phase of the transition. 
Jacksonville and San Antonio officials offered several lessons
learned to mitigate the implementation problems that occurred.  They
included the following: 

(1) Placing the decision-making authority at a level above both the
gaining and losing facilities would eliminate problems with competing
priorities. 

(2) Hiring key management and supervisory personnel from the closing
facility to work-in-place until the closure occurs would provide
better information on required equipment and reduce transition
problems. 

(3) Knowing the extent to which commercial sources are used would
allow the gaining activity to contract with those vendors and obtain
needed supplies until the supply pipeline catches up with the demand. 

(4) Modifying the Navy's system to recognize Air Force users as valid
customers would make it easier to obtain needed parts. 

(5) Ensuring that all technical data, including any local
instructions, are current and are provided to the gaining activity
would reduce the time and cost of developing production capability
for a new workload. 

(6) Avoiding unnecessary requirements for certification of personnel
and equipment would reduce the time and cost of developing production
capability. 


Briefing Section IV RECOMMENDATION
============================================================== Letter 



   (See figure in printed
   edition.)


   RECOMMENDATION
----------------------------------------------------------- Letter :19

We recommend that the Secretary of Defense ensure that lessons
learned from closing military depots and transferring workloads to
remaining depots be shared among the military services. 




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================== Letter 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

James F.  Wiggins, Associate Director

DALLAS FIELD OFFICE

Ronald L.  Berteotti, Assistant Director
Jeffrey A.  Kans, Evaluator-in-Charge
Penney M.  Harwell, Senior Evaluator
David P.  Marks, Senior Evaluator

NORFOLK FIELD OFFICE

James E.  Lewis, Senior Evaluator


*** End of document. ***