Depot Maintenance: Workload Allocation Reporting Improved, but Lingering
Problems Remain (Letter Report, 07/13/1999, GAO/NSIAD-99-154).

In February, the Defense Department (DOD) submitted a report to Congress
on the distribution of depot maintenance workloads for fiscal year 1998.
The law stipulates that no more than half of the funds made available in
a fiscal year to the military for depot maintenance and repair can be
used for performance by contractors. GAO reviewed DOD's report on the
percentage of depot maintenance funding used by the public and private
sector activities. This report (1) provides GAO's opinion on DOD's
compliance with the law's percentage requirement; (2) compares the
results of DOD's recent report on its fiscal year 1998 workload with
earlier reports; (3) discusses continuing weaknesses in the accuracy,
completeness, and consistency of reported data; and (4) discusses
improvements in DOD's guidance, data collection processes, oversight,
and opportunities to further improve the quality of future reports.

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

 REPORTNUM:  NSIAD-99-154
     TITLE:  Depot Maintenance: Workload Allocation Reporting Improved,
	     but Lingering Problems Remain
      DATE:  07/13/1999
   SUBJECT:  Equipment maintenance
	     Department of Defense contractors
	     Data integrity
	     Maintenance services contracts
	     Reporting requirements
	     Privatization
	     Cost effectiveness analysis
	     Data collection

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GAO/NSIAD-99-154

Rev-LG logo.eps GAO United States General Accounting Office Report
to Congressional Committees July 1999 DEPOT MAINTENANCE Workload
Allocation Reporting Improved, but Lingering Problems Remain
GAO/NSIAD-99-154 Page 1 GAO/NSIAD-99-154 Depot Maintenance United
States General Accounting Office Washington, D. C. 20548 National
Security and International Affairs Division B-282668 Letter July
13, 1999 The Honorable John Warner Chairman The Honorable Carl
Levin Ranking Minority Member Committee on Armed Services United
States Senate The Honorable Floyd Spence Chairman The Honorable
Ike Skelton Ranking Minority Member Committee on Armed Services
House of Representatives On February 5, 1999, as required by 10 U.
S. C. 2466 (e)( 1), the Department of Defense (DOD) submitted a
report to Congress on the distribution of depot maintenance
workloads for fiscal year 1998. The statute provides that not more
than 50 percent of the funds made available in a fiscal year to a
military department or defense agency for depot maintenance and
repair can be used for performance by contractors. As required by
10 U. S. C. 2466 (e)( 2), we reviewed DOD's report on the
percentage of depot maintenance funding used by the public and
private sector activities. This report (1) sets forth our view on
DOD's compliance with the percentage requirement in 10 U. S. C.
2466; (2) compares the results of DOD's recent report of fiscal
year 1998 workload with prior years' reports; (3) discusses
continuing weaknesses in the accuracy, completeness, and
consistency of reported data; and (4) discusses improvements in
DOD's guidance, data collection processes, oversight, and
opportunities to further improve the quality of future reports.
Results in Brief As submitted, DOD's report covering fiscal year
1998 depot workloads would indicate that each of the covered
military departments and the one reporting defense agency are in
compliance with the 50- percent ceiling set by section 2466.
However, because of errors and inconsistencies in reporting, we
could not determine whether DOD's departments and agencies were in
compliance with the 50- percent ceiling for private sector
performance. Further, consistent with DOD's stated plans, the
private Letter B-282668 Page 2 GAO/NSIAD-99-154 Depot Maintenance
sector's portion of such work is continuing to increase. DOD is
collecting projected out- year obligation data that likely would
have provided a more definitive outlook for future workload
allocations, but has not yet completed its data collection and
analysis of this data. Notwithstanding limitations in DOD's data,
its report covering fiscal year 1998 depot workloads was more
comprehensive than prior years' reports because of improved
guidance and, in the case of the Air Force, use of its audit
agency to review its data. DOD reported obligating a total of
$14.1 billion for depot maintenance in fiscal year 1998 about 37
percent more than was reported for fiscal year 1997. The
percentage reported going to the private sector increased from 37
to 42 percent between fiscal year 1997 and 1998, with much of the
increase resulting from contractor logistics support and interim
contractor support. The Office of the Secretary of Defense (OSD),
the Air Force, and the Army have provided improved guidance and
oversight for this year's report, and these actions resulted in
more comprehensive reporting. However, reporting requirements are
unclear in certain areas such as distinctions between depot and
other levels of maintenance and repair activities. Also, problems
occurred in this reporting cycle because guidance was not
communicated to and understood by all organizational levels
responsible for reporting. Further, data were not always reviewed
for consistency and completeness within each service prior to
submission to the OSD. Even once these issues are addressed, some
subjectivity would likely continue because of difficulties in
categorizing certain maintenance repair actions. This report
includes some recommendations for improving the quality of DOD's
public- private sector workload reporting. Background DOD spent
about 5 percent of its $272 billion fiscal year 1998 budget on
depot maintenance activities. Depot- level maintenance involves
the overhaul, repair, upgrade, and rebuilding of military systems,
subsystems, parts, and assemblies and requires extensive shop
facilities, specialized equipment, and highly skilled technical
and engineering personnel. Traditionally, public sector
maintenance activities have been performed at Letter B-282668 Page
3 GAO/NSIAD-99-154 Depot Maintenance 22 major government- owned
and -operated depots 1 and a number of othergovernment- owned
facilities, including post- production software support
activities, naval warfare centers, and Army arsenals. According to
DOD officials, private sector maintenance and repair are conducted
at about 1,100 contractor- operated facilities at various
geographic locations. However, current DOD guidance calls for
increasing reliance on the private sector to meet support needs to
the extent authorized by law. Legislative Requirements on Public
and Private Sector Workload Distribution Section 2466 of title 10
of the United States Code governs the allocation of depot
maintenance workload between the public and private sectors. The
statute provides that not more than 50 percent of funds made
available in a fiscal year to a military department or defense
agency for depot- level repair and maintenance can be used to
contract for performance by nonfederal personnel. This percentage
applies to each individual military department and defense agency.
The statute also requires that the Secretary of Defense submit to
Congress a report concerning performance during the preceding
fiscal year and that we report our views on whether DOD complied
with the public- private sector percentage requirements. Congress
has required DOD to report public and private sector distribution
data in all years except one since 1991, and the reporting
requirement was made permanent by the National Defense
Authorization Act for Fiscal Year 1998 (P. L. 105- 85) as codified
at 10 U. S. C. 2466. Results of our reviews of DOD's public-
private sector workload allocation reports for fiscal years 1995,
1996, and 1997 are discussed in appendix I. The 1998 legislation
further provided a new provision, 10 U. S. C. 2460, which defined
depot- level maintenance and repair workloads. The provision
specified that depot- level maintenance and repair includes (1)
overhaul, upgrading, or rebuilding of parts, assemblies, or
subassemblies; (2) testing and reclamation of equipment; (3) all
aspects of software maintenance classified by DOD as depot
maintenance as of July 1, 1995; and (4) interim contractor support
(ICS) and contractor logistics support (CLS) to the extent they
involve depot- level maintenance services. The provision also
specified that all depot- level maintenance and repair 1 Major
depots employ at least 400 personnel. Two major Air Force
logistics centers (San Antonio and Sacramento) are in the process
of closing and a naval warfare center (Keyport) is being downsized
to less than 400 employees. B-282668 Page 4 GAO/NSIAD-99-154 Depot
Maintenance workloads were to be included, regardless of funding
source and location where the work was performed. It excluded from
counting as depot- level maintenance workload the (1) nuclear
refueling of aircraft carriers, (2) procurement of major
modification or upgrades of weapon systems that are designed to
improve program performance, and (3) procurement of parts for
safety modifications but included the installation of parts for
safety modifications. Before 10 U. S. C. 2460 was enacted, depot-
level maintenance and repair had not been defined in statute.
Working definitions were provided in a variety of DOD directives,
regulations and publications. The services applied these
definitions using ad hoc procedures to prepare the prior- year
reports. Uncertainty Exists Over Compliance With Ceiling on
Private Sector Work, Even Though Reporting Is More Comprehensive
Than Ever DOD's report, as presented, indicates that each of the
covered military departments and the one reporting defense agency
were in compliance with the statute; each reported that less than
50 percent of its depot workload was performed by contractors.
However, as discussed later, because of errors and inconsistencies
in reporting, we were unable to fully validate the data.
Consequently, we could not determine whether DOD's departments and
agencies were in compliance with the 50- percent ceiling for
private- sector performance. Notwithstanding limitations in DOD's
data, its March 1999 report was more comprehensive than previous
ones. On the other hand, consistent with its stated policies and
plans, DOD appears to be moving toward increased reliance on the
private sector for depot maintenance support. DOD is working to
develop future projections of its depot workload allocations, but
it had not completed its efforts to obtain this information at the
time we completed our report. DOD's Fiscal Year 1998 Report Is
More Comprehensive Than Before For fiscal year 1998, DOD reported
total obligations of $14.1 billion for depot maintenance and
repair. This is a 37- percent increase over the $10.3 billion
reported for fiscal year 1997. Much of the increase resulted from
reporting CLS and ICS. DOD has collected this information before
for internal management purposes, but this was the first time it
was included in the annual congressional report. In addition, more
organizations and weapon system acquisition offices are now
reporting depot maintenance workloads. For example, the number of
Army major commands reporting increased from 4 to 11, the TRICARE
Management Activity reported this year for the first time, and the
U. S. Special B-282668 Page 5 GAO/NSIAD-99-154 Depot Maintenance
Operations Command 2 expanded its reporting to include reparable
components funded through the service stock funds. DOD submitted
its workload report for fiscal year 1998 to Congress on February
5, 1999. The amounts and percentage distributions between the
public and private sectors reported by DOD organizations are shown
in table 1. Table 1: Reported FiscalYear 1998 DOD Depot
Maintenance Workload Distributions Source: DOD's Feb. 5, 1999,
report to Congress. As discussed more fully later, we found
numerous errors, omissions, and inconsistencies in the records
supporting this report; consequently, we were unable to fully
validate the data and determine whether or not DOD's departments
and agencies were complying with the 50- percent ceiling. The
types of errors and omissions we identified indicated that in some
instances DOD underreported the amount of funded depot maintenance
work and understated the amount performed by the private sector.
In other instances, the errors overstated the amount of funded
depot maintenance. The errors and omissions were such that we
sometimes 2 Because DOD does not consider them military
departments or defense agencies, these two organizations are not
subject to the 50- percent ceiling for private sector workloads.
TRICARE Management Activity provides operational support for the
military services in managing and administering portions of the
defense health program. It funds maintenance on aeromedical
evacuation aircraft. The U. S. Special Operations Command is a
unified combatant command responsible for ensuring special forces
are combat ready and mission capable. It receives its own funds
for acquisition and support for special operations- peculiar
equipment, while the military services are responsible for funding
items that are not special operations- peculiar. Dollars in
millions Total fiscal year 1998 obligations Public sector total
Public sector percent Private sector total Private sector percent
Army $1, 729.4 $941. 2 54. 4 $788.2 45.6 Navy (and Marine Corps)
6,430.9 3, 748. 2 58. 3 2, 682.7 41.7 Air Force 5, 736.8 3, 328. 6
58. 0 2, 408.2 42.0 Defense Intelligence Agency 0. 061 0.061 100.0
0 0 U. S. Special Operations Command 195.4 137. 2 70. 2 58. 2 29.8
TRICARE Management Activity 30.7 0 0 30.7 100.0 Total DOD $14,
122.4 $8, 155. 3 57. 7 $5, 968. 0 42.3 B-282668 Page 6 GAO/NSIAD-
99-154 Depot Maintenance could not differentiate whether the
amounts pertained to work performed by the public or private
sectors. As a result, the net effect was unclear. While Precise
Data Are Lacking, Available Information Indicates Growth in
Private Sector Workloads We cannot be sure of the precise amounts
of depot workloads being performed by government and private
sector employees. However, DOD reports an increasing trend among
the services in relying on the private sector for this work. For
DOD in total, the percentage reported for the private sector was
42 percent for fiscal year 1998, up from 37 percent reported for
fiscal year 1997. Figure 1 shows changes in reported percentages
of DOD depot maintenance workloads performed by contractor
personnel from fiscal years 1994 through 1998 for the military
departments. The reporting baseline has changed over this period,
consequently, the data are not directly comparable. The reports
reflect changes in the data as reported under the guidelines in
effect in eachyear. Figure 1: Percentage of DOD Depot Maintenance
Workloads Performed by Contractors (by dollar value) Source: DOD
data. Note: While the data provide indication of a general trend
toward increased contractor performance, it is subject to some
imprecision due to periodic changes in reporting requirements.
Despite data limitations, the trend data indicate that the
military departments continue to move toward the 50- percent
ceiling on private sector workloads. DOD's report for fiscal year
1998 indicated that, with the 0 5 1 0 1 5 2 0 2 5 3 0 3 5 4 0 4 5
5 0 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 F i s c a l y e a r A
r m y N a v y A ir F o r c e B-282668 Page 7 GAO/NSIAD-99-154
Depot Maintenance exception of TRICARE, which reported all its
maintenance in the private sector, no organization exceeded the
ceiling on private sector workloads. This trend toward greater
reliance on the private sector is consistent with DOD's plans to
move in this direction. Future Projections Although not required
by 10 U. S. C. 2466, DOD is developing data to make future
projections of depot maintenance workloads in the public and
private sectors. However, at the time of our report, DOD was still
developing the data. Data on the prior year's workload percentages
are important, but, by themselves provide only a retrospective,
point- in- time measure. Projections of future years' workloads
and the percentage allocations between the two sectors provide a
valuable perspective for internal management and congressional
oversight. This data could highlight trends in the size and flow
of workload and help judge the likely impact of current policies
and acquisition program decisions on future allocations. Errors,
Inconsistencies, and Uncertainties Continue, but the Net Effect Is
Unclear Our review this year, as in prior years, found numerous
instances of inaccurate and inconsistent reporting of depot
workloads and in designating whether it was performed by the
public or private sector, making it unclear whether DOD
departments and agencies were within the stated 50- percent
ceiling. Of those problem areas where we could quantify or
reasonably estimate, we found errors and inconsistencies amounting
to about 10 percent of the total dollars of workload reported by
DOD. 3 Many of these problems were specific to types of workloads
and systems but also involved difficulties distinguishing between
depot and nondepot workloads at some locations. Other problems
were of a more miscellaneous nature. We could not determine the
net effects of these problems on workload totals and percentages
because of limitations in the data and because some were difficult
to quantify. The major reporting problems are summarized below,
and discussed more fully in appendix II. 3 This figure, however,
is based on our work primarily at headquarters locations and
limited visits to field locations where data were obtained from
the services. B-282668 Page 8 GAO/NSIAD-99-154 Depot Maintenance
Key Problems Identified DOD's report on fiscal year 1998 workloads
contained varying degrees of underreporting, over- reporting, and
inconsistent reporting of depot maintenance workloads. An example
of inconsistent and possible underreporting involves installations
of major upgrade and remanufacturing programs. 4 The Army reported
about $70 million for costs of disassembling systems at both
public and private facilities. However, the Navy did not report
any of its $10. 4 million for disassembly workload. Neither
service reported the installation costs incurred in the upgrade
process in the private sector, considering these to be more
production in nature rather than depot maintenance. Estimated
installation costs for the Army were about $130 million and the
Navy $30 million. OSD guidance specifies that installation and
depot- level costs on major performance upgrades and other
modifications should be reported. Another example of inconsistent
and underreporting of workloads involves installation of other
modifications by the Navy. The Naval Air Systems Command reported
$217 million for installation of modifications by both the public
and private sectors, but the Naval Sea Systems Command did not
report $176 million for installation work. A Sea Systems Command
official decided installation of modifications was not depot
maintenance. However, one program within the Naval Sea Systems
Command did report $62 million for public and private sector
installations of modifications. This problem can affect both
public and private workloads because installations are being done
by both sectors. In commenting on a draft of this report, Navy
officials said that funds spent for disassembly are paid for with
Aircraft Procurement Navy dollars and are not required to be
reported. OSD officials, however, agreed with us that it is not
the source of funds but the nature of the work that would be the
determining factor in whether work should be considered depot
work. They also agreed that disassembly, reclamation, preparation,
and recovery work are depot maintenance functions, regardless of
where this work is performed or the source of funds paying for it.
Underreporting was caused by the inability to distinguish whether
work on depot maintenance workloads obtained through interservice
agreements 4 A modification or upgrade is the alteration,
conversion, or modernization of an end item of investment
equipment which changes or improves the original purpose or
operational capacity in relation to the effectiveness, efficiency,
reliability or safety of that item. If the modification involves a
remanufacture, the process typically results in a new model number
and serial number of the modified system. B-282668 Page 9
GAO/NSIAD-99-154 Depot Maintenance was actually completed in the
public or private sector. For example, the Army and the Naval Air
Systems Command reported that all interservice workloads$ 11
million and $116 million, respectively were performed in the
public sector, even though some workloads were actually performed
by private contractors. The U. S. Special Operations Command,
which reports separately from the services, did not determine
where work was performed and reported its entire amount obligated
for Air Force reparables $97 million as public sector obligations,
even though the Air Force, in total, contracts out more than one-
third of its reparable workloads. This problem would understate
contract workloads. The inability to distinguish depot workloads
from other work performed by the services at below- depot level
maintenance organizations resulted in inconsistent reporting. The
Army performed depot maintenance tasks at field level activities
that were not completely reported because these activities did not
consider the work they did depot maintenance, even though some of
this work meets the depot maintenance definition established in
legislation. Several Army commands inconsistently collected and
reported depot data. In addition, a recent internal study by the
Army, as well as our ongoing review of Army maintenance, suggests
that there is a proliferation of depot workloads performed in
nondepot locations and the total amount, unknown at this time, is
higher than reported. Further, the Navy maintains its Trident
submarines at refit facilities but reported no depot maintenance.
Navy officials have different opinions about whether some of the
work done on the Trident is depot maintenance. The total
maintenance expenditure in fiscal year 1998 was an estimated $158
million. The problem of identifying depot workload in nondepot
activities could affect reported amounts for both public and
private sectors. Errors resulting from clerical and transcription
errors and other problems, including differences in interpreting
reporting guidance, also resulted in underreporting. The Navy, for
example, inadvertently reversed its public- private data for the
Atlantic and Pacific Fleets and reported a $267,000 expenditure as
$267 million; the net effect of both errors resulted in an
underreporting of the public sector obligations. The Air Force
added $24 million in estimated costs of government contract
management to public sector obligations and subtracted the costs
from private sector obligations. This latter area is not clearly
dealt with in existing guidance. B-282668 Page 10 GAO/NSIAD-99-154
Depot Maintenance Net Impact of Reporting Problems Is Unclear The
net effect of DOD's reporting problems on depot workloads and the
public- private percentages is not clear due to data limitations,
limited time available for our review, and our inability to
quantify or project some data. The total amount of errors and
inconsistencies that was quantifiable represented about 10 percent
of the total dollars DOD reported. Some errors involved
underreporting, while others involved overreporting or resulted in
adding to one sector while subtracting the same amount from the
other sector. Further, although we could quantify or use
officials' estimates to quantify the majority of the problems, we
found other problems were not easily quantified, and there are
lingering uncertainties whether some types of workload should be
reported. Some discrepancies were not readily distinguishable as
to whether they affected the public or private sector. As a
result, we could not accurately determine how much the reporting
errors affected the overall percentages assigned to the public and
private sectors. Thus, we could not definitively determine
compliance with the 50 percent ceiling for the private sector. At
some locations, we found personnel responsible for providing
information on depot workloads had not received the reporting
guidelines necessary to provide accurate and complete information
on depot workloads. Thus, although the services had issued
guidance regarding what and how maintenance should be reported, in
these instances this information never reached the personnel
responsible for collecting it. Also, in some cases, reporting
officials at locations where both depot and nondepot level
maintenance work was being performed found they were making
subjective determinations that could easily have been made
differently by someone else. Improvements Made in Guidance and
Reporting for 1998, but Additional Improvements Are Needed
Compared to prior years, DOD improved its reporting on the
distribution of depot maintenance funds between the public and
private sectors for fiscal year 1998. This most recent report
shows that the services are reporting more dollars, on more types
of maintenance, and from more activities. Two services improved
their respective processes for collecting data. Yet, based on data
deficiencies identified, additional improvements are needed.
However, to what extent additional efforts can eliminate all
reporting problems is questionable, given the sheer size and
extent of data collection efforts and the reporting uncertainties
that persist. B-282668 Page 11 GAO/NSIAD-99-154 Depot Maintenance
Improved Guidance and Data Collection Workload reporting guidance
and implementation strategies for collecting and reporting the
fiscal year 1998 workload data were generally better, more
systematic, and more comprehensive than in prior years. OSD
provided increased top- level guidance and taskings to the
appropriate organizations. The Air Force and the Army took several
steps to improve their data collection and reporting processes,
but we found little indication that the Navy had. The OSD
Maintenance Policy, Programs, and Resources Office assembles DOD's
report to Congress from the data aggregated by the military
departments and the defense agencies. Responding to a
recommendation in our July 1998 report, OSD issued guidance
stating that the military departments and defense agencies should
establish and document internal operating procedures for
collecting data and reporting public and private sector depot-
level workloads. It also stipulated that the procedures should
clearly (1) identify the specific commands and activities
responsible for submitting data and (2) describe the records and
systems from which documentation would be pulled and the minimum
documentation to be retained. It defined depot maintenance
consistently with 10 U. S. C. 2460, added new reporting
requirements for ICS, CLS, and similar contracts, and included
some narrative to help clarify new reporting requirements and
approaches. OSD tasked the military departments and the defense
agencies to report and required a response in the negative from
those agencies having no depot maintenance. Seven defense agencies
submitted negative responses. The Defense Intelligence Agency was
the only agency to report some depot maintenance, and that amount
was minimal. Although not defense agencies, the U. S. Special
Operations Command and TRICARE Management Activity also reported
some depot maintenance workloads. OSD does not consider these two
organizations to be military departments or defense agencies as
defined in 10 U. S. C. 101 and, consequently, it does not believe
these organizations are subject to the 50- percent limitation. We
found no basis to disagree with that view. However, OSD rightly
included these organizations in the report to ensure more complete
reporting of the source of repair of DOD depot maintenance work.
These organizations do manage depot maintenance funds and own
equipment items that are maintained in DOD depots and by
contractors. B-282668 Page 12 GAO/NSIAD-99-154 Depot Maintenance
Air Force Air Force officials initiated the following key actions
that substantially improved its reporting process and results from
prior years.  Issued additional instructions to supplement the OSD
guidance, expanding on the directions for reporting ICS, CLS, and
other maintenance reporting categories that had proven troublesome
in the past or which required some interpretation. Held a widely
attended kick- off meeting to explain and revise the guidance and
to discuss reporting issues with representatives of the air
logistics centers, acquisition program offices, and Headquarters,
Air Force Materiel Command (AFMC).  Provided electronic templates
to help ensure comprehensive and standardized reporting.
Designated focal points that worked with reporting entities to
answer questions and summarize data.  Used the Air Force Audit
Agency to verify data and validate the collection process.
Auditors, along with officials from AFMC headquarters and the Air
Staff, reviewed major portions of the workload estimates initially
submitted by logistics centers and acquisition offices and made
substantial revisions to improve the accuracy and
comprehensiveness of the data reported to the Congress. Army The
Army also issued supplemental instructions to expand upon the OSD
guidance, provide more details, and accommodate Army- unique
programs. Officials based the instructions on the findings and
recommendations resulting from last year's evaluation by the Army
Audit Agency and our work. The instructions were disseminated to
11 major commands, and each command headquarters distributed the
guidance to lower organizational levels and generally tasked
appropriate offices for reporting. Every command subsequently
reported depot maintenance obligations for fiscal year 1998 while
only four commands reported last year. Officials, however, did not
always ensure that all reporting offices had received and
understood the guidance, which led to some reporting errors and
inconsistencies discussed later in this report. Responding to the
problems we identified in last year's report, 5 the Army Audit
Agency reviewed the results of the Army's 1997 data collection and
reporting, and made recommendations for improving Army procedures.
An official said the 5 Defense Depot Maintenance: Public and
Private Sector Workload Distribution Reporting Can Be Further
Improved (GAO/NSIAD-98-175, July 23, 1998). B-282668 Page 13
GAO/NSIAD-99-154 Depot Maintenance auditors may be called in again
to review the 1998 results, depending on the kinds and extent of
problems we identified in this year's report. Navy Navy officials
did not (1) issue additional instructions, (2) ensure that the OSD
guidance was distributed to all appropriate offices, and, (3) in
general, exercise the degree of management oversight of the data
collection process, as did the other services. The Navy basically
distributed the data call to nine commands and relied on their
responses with little internal or external review. The Naval Audit
Service was not tasked to verify data and validate the process.
The Navy's approach resulted in differing interpretations of OSD
guidance and questionable data gathering practices at two of the
three commands we visited. For example, one command reported
obligations for installing modifications as stated in the OSD
guidance while another one did not, based on an official's
determination that such expenses were not maintenance and were
therefore not reportable. Neither the Naval Air Systems Command
nor Naval Sea Systems Command sent the OSD guidance and taskings
to all weapon systems program officials who were in the best
position to determine applicability of reporting requirements to
their programs. In commenting on a draft of this report, Navy
officials said they had (1) obtained copies of newly drafted 50-
50 data collection and implementation guidance from both the Army
and the Air Force to take advantage of their lessons learned and
(2) initiated plans to use the Naval Audit Service to help improve
the Navy's 50- 50 data gathering and reporting. Further
Improvements Can Be Made In the current environment, where the
distinction between depot and other types of maintenance is
becoming more blurred due to the various factors noted,
identifying and reporting all obligations for depot maintenance is
an increasingly complex process. Some situations will likely
continue to require some subjective judgments regarding whether
and how much to report. However, some of the errors we found were
administrative and clerical and could be eliminated through
reviews of data before they are forwarded to higher levels,
improving DOD guidance, and providing more management oversight.
Also, we identified some opportunities for process improvements
that could help to improve the quality of DOD's public- private
sector workload reporting. B-282668 Page 14 GAO/NSIAD-99-154 Depot
Maintenance Distinctions Between Depot and Other Types of Workload
Are Increasing Reporting Challenges and Will Likely Require
Additional Guidance Since the early 1990s, the distinction between
depot- level maintenance and other levels of maintenance and
manufacturing work has become increasingly vague as the services
move depot workloads to operating locations, redefine required
levels of maintenance, and consolidate maintenance organizations.
This vagueness could require additional guidance on how to
distinguish between depot and other workloads when depot and other
maintenance levels have been consolidated. While depot- level
maintenance workloads continue to be performed at traditional
depot activities, they are also performed by civilian and active-
duty military personnel in military units and by contractors at
various field locations. Funds for depot- level maintenance
activities come principally from operations and maintenance
appropriations but also procurement and research, development,
testing, and evaluation appropriations. The public depots are
primarily financed with working capital funds, whereas other
facilities providing maintenance are financed through direct
appropriation. 6 Each of the military services is consolidating
and streamlining some maintenance activities, which can present
future reporting challenges. Thus, each of the military service
headquarters may need to add guidance specific to its initiative,
but some subjective judgments and differences in interpretation
are likely when depot work is consolidated with other maintenance
activities. An Army initiative the Sustainment Maintenance program
will collapse the current four- level maintenance system into a
two- level system. Still in the early policy formulation stage,
the two- level system will combine field and sustainment levels of
maintenance at the same location. The current depot and general
support levels will be combined and relabeled as sustainment
maintenance workload tasks that involve repairing, overhauling,
rebuilding, and testing items. Sustainment maintenance will be
accomplished both at the established Army depots and at local
repair and maintenance activities. The Army plans to issue a new
national maintenance policy later this year to consolidate the
maintenance levels, and it will then begin revising field level
instructions and technical orders in preparation for implementing
the sustainment maintenance program. 6 A working capital fund is a
revolving fund in which depots earn revenues through sales of
maintenance services to customers, who reimburse the fund with
appropriated monies. Nonworking capital funded maintenance
facilities are financed through direct appropriations and their
customers are not charged on a per item basis as they are for
operations funded through the working capital fund. B-282668 Page
15 GAO/NSIAD-99-154 Depot Maintenance The Navy's regionalization
of maintenance plans is consolidating depot- level and below-
depot levels of maintenance on a geographic basis. For example,
the Navy has implemented a pilot project consolidating the
operations and management of its Pearl Harbor Naval Shipyard and
its nearby intermediate maintenance facility. This pilot project
is testing the regional maintenance concept that integrating
intermediate and depot maintenance activities would result in
greater efficiency and lower overall costs than maintaining
maintenance facilities within a single, geographic area. The Navy
decided the consolidated activity at Pearl Harbor would use a
single financial system and use mission funding rather than the
Navy Working Capital Fund. Fiscal year 1999 is the first year
operating under the new organization. The impact on the 50- 50
reporting of merging both the operational and financial aspects of
the two levels of maintenance reporting is uncertain, but an
official told us the combined activity could have difficulty
determining what work should be included in the Navy's 2466 report
to Congress next year. Similarly, the Air Force's recent
transition from three to two levels of maintenance and changes in
the location of work present some difficulties in reporting depot-
level maintenance. Under two levels of maintenance, some workloads
that had been accomplished at intermediate facilities transitioned
to depots, while some devolved to base maintenance activities.
Those workloads that went to depots should be included in the
report to Congress, consistent with the OSD guidance that all
workloads performed at depots should be counted as public sector
workloads. The Air Force's experience in reporting C- 5 engine
maintenance suggests that additional guidance may be needed in
this area because the same or similar tasks may not be
consistently reported and could change from year to year depending
on the location where work is performed. The Air Force initially
pushed intermediate- level C- 5 engine workloads to the San
Antonio Air Logistics Center, where they were reported as public
depot workloads. The Air Force later decided to move these same
workloads to operating bases, where they were not included in this
year's depot workload report. Continue to Improve Other Guidance
and Ensure It Is Adequately Communicated to Key Reporting Levels
The errors, inconsistencies, and uncertainties we found indicated
that implementing guidance could be improved with further
clarifications of reporting requirements in problem areas
discussed in this report and with greater emphasis on ensuring
that reporting guidance is disseminated to and understood by those
charged with reporting. The experiences in the Air Force and the
Army demonstrate that continuing to hone guidance and tailor it to
service specific issues and programs pays off. Once improved,
management must then direct and coordinate its release and provide
the B-282668 Page 16 GAO/NSIAD-99-154 Depot Maintenance oversight
necessary to ensure comprehensive and consistent results. On this
point, the Army fell somewhat short in ensuring instructions were
distributed and understood, especially in those commands that had
not previously been tasked to report depot maintenance. Also, as
discussed earlier, the Navy did not exercise much central
direction and oversight of data collection to ensure all
appropriate offices received guidance and had a common
understanding of reporting requirements. Responding to a
recommendation in our July 1998 report, OSD stated in its guidance
that the military services and defense agencies were to establish
and document internal operating procedures for collecting data and
reporting public and private sector depot- level workloads. The
procedures are to clearly identify the specific commands and
activities responsible for submitting data and describe the
records and systems from which documentation will be pulled and
the minimum documentation to be retained. The OSD guidance clearly
specified reporting conventions and organizational
responsibilities, while Army and Air Force supplemental
instructions provided more specific details tailored to service
issues and programs. For example, the Air Force guidance for CLS
and ICS programs included a helpful list of tasks to assist
program officials in determining which program costs should be
counted as depot and which should not be. Each year, DOD can build
upon lessons learned to further improve guidance for the following
year and to include new issues that emerge for example, reporting
maintenance warranty costs and the challenges posed by the
services' consolidations and changes in maintenance levels. Align
Internal Definitions With Statutory Requirements Because of the
new statutory definition of depot maintenance in 10 U. S. C. 2460,
the services need to ensure that their own regulations and
internal operating processes are consistent with the statute. This
appears to be more of a problem in the Army than the other
services. The Army's primary regulation on maintenance Army
Regulation 750- 1 establishes policies and procedures for
determining the appropriate level and subsequent classification of
maintenance. The statutory definition encompasses a substantial
portion of general support- level maintenance that is currently
not recognized by the Army regulation as depot maintenance. As a
result, field maintenance and program officials used definitions
and maintenance classifications established pursuant to the
regulation in determining whether and how much depot maintenance
should be reported and did not report some workloads that appear
to meet the definition in the statute. Army officials are revising
this regulation to be more consistent with the statute. The Army,
however, will also have to revise other operating instructions at
the field and depot levels. Next year, the Army will need to B-
282668 Page 17 GAO/NSIAD-99-154 Depot Maintenance ensure that,
when completed, the revised regulation is understood and used in
the field to report depot maintenance workload. Maintain Auditable
Records OSD guidance requires that the military services and the
defense agencies maintain the detailed supporting data used to
develop the submission for use by us. For CLS, ICS, and similar
contractor support, the guidance specifies that records are to be
maintained on the amounts included in workload totals and that
estimating techniques and rationales are to be explained and
documented. Our review, however, showed that complete records,
accessible and understandable to a third party, were not always
maintained. Army units in Korea, for example, maintained rather
poor documentation and some records had been disposed of. The Navy
did not maintain comprehensive central records to show how
obligations had been accumulated. Air Force programs did not
always have documentation to show how CLS costs were computed and
what assumptions and estimating methodologies were used. Good
records, documentation of processes followed, and identification
of data sources used are important not only for audits and
management oversight but also for use as a historical record that
can be followed by newly assigned staff to assist in data
collection and by new weapon system programs. In commenting on a
draft of this report, Navy officials said that the Defense
Contract Management Command (DCMC) maintains information about
depot maintenance contracts, including a complete history of
obligations. While this may be true, DCMC does not provide a
separate accounting of contract maintenance data. Additionally,
our comment regarding the Navy not maintaining comprehensive
records was intended to refer to all types of Navy depot- level
maintenance, including that provided by Navy depots, other service
depots, as well as the private sector. In later discussions with
Navy officials, they agreed with our observations regarding the
need to maintain better records in the future. Consider Expanded
Use of Auditors to Verify Data and Validate Processes The Air
Force has demonstrated the value of employing its audit agency as
a third party, honest broker, to verify data and validate the data
collection and reporting processes. The Army made limited use of
its auditors last year to identify problems and to prepare
instructions to supplement the OSD guidance. The Navy did not
employ its audit agency to assist in this process. Additional use
of service audit agencies could improve the quality and
consistency of reported workload data. The Air Force called on the
Air Force Audit Agency for both the 1998 and 1997 report cycles.
Numerous reporting officials cited the Air Force Audit B-282668
Page 18 GAO/NSIAD-99-154 Depot Maintenance Agency's work as
extremely valuable in improving report accuracy and consistency.
Auditors reviewed about $4.8 billion (85 percent) of the fiscal
year 1998 workloads reported by the air logistics centers and
acquisition program offices and identified an error rate of 3
percent, or $198 million (absolute value). These errors were
corrected before the Air Force finalized its data and submitted
the Air Force report to OSD. As a result, we found fewer reporting
problems in the Air Force than in the other services. The Army
used its audit agency to review data after the 1997 report had
already gone to Congress, but its findings and recommendations
were useful to improving the Army's process and issuing
supplemental instructions. If the Army had used its auditors to
verify data before submitting its report to OSD, fewer problems
would likely have gone undetected in the report that went to
Congress. And, given the magnitude of errors identified in the
Navy's report, use of its audit service could have been very
beneficial. Use of statistical sampling techniques could also be
helpful in this regard. Report Out- year Data and Project Future
Allocations As noted, while not required by law, this year's data
call from OSD continued the prior practice of having components
report projected workloads and percentage distributions for future
years, in addition to current year reporting. OSD tasked the
services to project workload data for fiscal years 1999 through
2005. The fiscal year 1999 and 2000 workloads were to use data
submitted in the 2000 President's budget and the funded workloads
for the remaining years were to reflect the most recent Program
Operating Memorandum submission. DOD had not completed its efforts
to obtain this information at the time we completed our report.
Having this information, along with reporting on the results of
the preceding year, would be beneficial. Conclusions DOD improved
the results and the processes used to generate the report for
fiscal year 1998. The report indicates that the military
departments and defense agencies complied with the legislative
requirement on depot maintenance funding allocation. However, we
could not fully validate the data and determine whether the
military departments and defense agencies were complying with the
50- percent ceiling for private sector performance under 10 U. S.
C. 2466. Many of the reporting problems relate to uncertainties
regarding what is and is not reportable and inconsistent
interpretation of requirements between and among the services.
Problems B-282668 Page 19 GAO/NSIAD-99-154 Depot Maintenance also
resulted from personnel not receiving or being fully aware of
reporting requirements. Further, some problems were exacerbated by
the lack of retention of documentation pertaining to workload
allocations, or insufficient management oversight to ensure
accuracy and completeness of the data. Despite data limitations,
available information indicates that DOD, consistent with its
policies and plans, is moving toward greater reliance on private-
sector repair capabilities. DOD's report presents data for the
most recent reporting year. DOD is in the process of developing
projections of future year workload allocations. Such information
is necessary to make a complete analysis of funding trends.
Recommendations To improve the data collection and reporting
processes, we recommend that the Secretary of Defense, in
conjunction with the secretaries of the military departments and
commanders of the defense agencies and activities, (1) provide
additional clarifying guidance in areas of uncertainties such as
those involving warranties that include the performance of
maintenance, remanufacturing, and consolidation of depot and
nondepot work at individual locations; (2) increase management
emphasis and oversight to ensure reporting requirements are
adequately communicated to all organizational levels responsible
for providing workload reporting data; (3) consider greater
involvement of service audit agencies and statistical methods, as
appropriate, to verify workload reporting data before the data is
submitted to OSD; (4) ensure retention of necessary documentation
to verify workload allocations; and (5) provide future years'
projections along with the prior- year data, or as otherwise
required by Congress. 7 Agency Comments DOD officials provided
oral comments on a draft of this report. They concurred with the
first four recommendations and agreed to take actions such as
issuing additional guidance in areas of uncertainty, including
remanufacturing and consolidation of depot and nondepot work, and
increasing the use of service audit agencies to review reported
depot maintenance workload data. While concurring with the intent
of our fifth recommendation, the officials said it is not
practicable to submit future 7 H. R. 1401, section 334. B-282668
Page 20 GAO/NSIAD-99-154 Depot Maintenance years' projections of
depot workloads at the same time as prior- year data. These
officials said that if DOD is to submit out- year projections, the
budget update scheduled at the end of March would provide a better
baseline than out- year projections estimated using data developed
in September of the previous year. Thus, because of the timing of
the update, they said that May 1 is the earliest the future- year
data can be submitted. We agree that the later information should
be more current. However, using projections determined by the end
of March or later as the basis for developing a report to Congress
may not accommodate congressional review during the defense
authorization process. Noting that Congress isconsidering
requiring that out- year data be provided based on a different
schedule than the prior data, we revised our recommendation to
reflect this. 8 As discussed below, officials also commented on
various findings related to DOD's reporting on depot workloads.
DOD officials agreed that the Department's fiscal year 1998 depot
workload report had significant errors and inconsistencies, but
they noted that none were of sufficient magnitude to cast
reasonable doubt that the military departments and the defense
agencies were in compliance with the 50- percent limitation. As
our report points out, given the numbers and types of errors and
inconsistencies identified, we could not determine whether the
required reporting activities were or were not in compliance for
fiscal year 1998. Army and Navy officials stated that the Army and
the Navy were correct in not reporting certain costs associated
with remanufactucturing programs because these costs involve
production, not depot maintenance. We noted that the Army did
include the costs associated with disassembly and preparation,
which are a part of the remanufacturing process, while the Navy
did not. DOD officials agreed that reporting guidance relative to
remanufacturing and major upgrade programs should be clarified.
The statutory definition of depot maintenance includes certain
aspects of weapon system and component upgrade and rebuild. We
acknowledge that this is a difficult area to report on. However,
we believe our recommendation is still merited and additional
guidance and attention is warranted to ensure reporting is done
consistently and in accordance with congressional guidelines. 8 H.
R. 1401, section 334. B-282668 Page 21 GAO/NSIAD-99-154 Depot
Maintenance Navy officials disagreed with our statements that the
Navy should have reported funds associated with depot- like work
performed at the Trident Refit Facilities. They said that these
facilities are not considered depot- level facilities; no depot
maintenance work is performed there; and to accommodate the
Trident's unique operational schedule, depots are used only for
extended refit periods and extended refueling overhauls. These
facilities, however, were developed with extensive industrial
capability, generally not authorized at intermediate repair
facilities, to accommodate depot repair of the submarines'
critical components to support the Trident's operational schedule.
Further, in accordance with congressional and OSD guidelines, it
is not the location of the work but the content that should
determine whether it is depot- level work. Also, as previously
noted, DOD guidance provides that depot maintenance includes
overhaul, upgrading, or rebuilding of parts regardless of the
source of funds for the work. We continue to believe it is not
reasonable to conclude that these extraordinary industrial
facilities perform no depot maintenance work in light of the
capabilities of the industrial equipment located at the facilities
and the content, complexity, and cost of the repair work performed
there. Our 1998 report recommended that the secretaries of the
military departments develop methodologies for aggregating and
reporting depot- level work accomplished at nonworking capital
funded repair sites including the Trident repair facilities. We
continue to believe that additional efforts in this area are
needed to ensure that depot work is reported, regardless of
location or funding source. While our report states the Air Force
may have underreported maintenance warranty costs, Air Force
officials commented that all warranty costs related to depot-
level maintenance were included in the report to Congress.
However, Air Force Audit Agency officials initially raised the
issue that warranty costs appeared to be underreported and, in
their report comments, Air Force officials said that operating
procedures would be expanded for warranty costs. Our report did
not state that amounts were incorrectly reported but that a
warranty is another reporting category that could be clarified in
future guidance. Consequently, we left this example in the final
report. Because warranties are widely employed and encouraged by
DOD reform initiatives, it will be more important for OSD and the
military departments to expand and clarify reporting guidance in
this area. Therefore we have revised our recommendation to
specifically reflect this category. Agency officials also provided
technical comments which we incorporated where appropriate. B-
282668 Page 22 GAO/NSIAD-99-154 Depot Maintenance Scope and
Methodology To validate DOD's reported amounts and percentage
allocations to the public and private sectors, we reviewed DOD's
fiscal year 1998 report and the supporting details (summary
records, accounting reports, budget submissions, and contract
documents) at the departmental headquarters, major commands, and
selected maintenance activities. We discussed with officials the
processes used to request, collect, aggregate, and report depot
data and the management controls to oversee and validate results.
We compared the processes against title 10 provisions on reporting
requirements and definitions and the internal guidance used to
guide this year's report. We selected certain programs and
maintenance activities for more detailed review based on several
factors, including relative size, OSD's areas of interest, and our
past experience as to problem reporting areas. We evaluated
procedures used and the results to ensure accurate and complete
data and to identify errors, omissions, and inconsistencies in the
reported area. We discussed audit findings and reconciliations
made by the Air Force Audit Agency in its review of Air Force data
and reviewed Army Audit Agency findings from last year. To compare
this year's report to prior years, we used information that we had
developed in past years, supplemented by newer data, to compare
and contrast total amounts reported, workload compositions by
maintenance categories, and individual reporting organizations. We
did this to identify major changes in the amounts and composition
as well as commonalties between this and previous reporting
periods. However, a complete comparison is not possible because of
changes in reporting guidance. We developed trend data to show the
annual percentage allocations between the public and private
sectors for the military departments and for DOD as a whole, from
1994 to 1998. Based on the supporting details backing up each
organization's report, discussions with officials, and our
analysis of selected programs, we identified specific examples
where the reported information was not accurate, was incomplete,
and/ or was inconsistently reported within and between
organizations. We used OSD and service supplemental guidance as
criteria to evaluate and determine problem reporting areas and
areas where there are differences in interpreting and applying the
guidance. We obtained officials' views to determine the rationale
they used deciding whether and how much to report and their
perspectives on subjective and challenging areas of reporting. B-
282668 Page 23 GAO/NSIAD-99-154 Depot Maintenance Building on what
we had learned about both the positive actions taken by DOD this
year, as well as continuing problem areas, we identified process
improvements that could lead to improved future years' reports. We
also identified where DOD had already taken action to improve this
year's guidance, data collection processes, and oversight. We
received comments and perspectives from officials at OSD,
department headquarters, major commands, and maintenance
activities regarding lessons learned and lingering areas of
concern. We interviewed officials and examined documents at OSD,
Army, Navy, and Air Force headquarters, the Defense Intelligence
Agency, and TRICARE Management Activity, all in Washington, D. C.;
the U. S. Special Operations Command at MacDill Air Force Base,
Florida; Army Materiel Command in Alexandria, Virginia; Air Force
Materiel Command, Dayton, Ohio; Naval Sea Systems Command,
Arlington, Virginia; Naval Air Systems Command, Patuxent River,
Maryland; Air Force Audit Agency, Dayton, Ohio; Army Tank
Automotive Command and the Program Executive Office for Ground
Combat and Support Systems, Warren, Michigan; Army Aviation
Missile Command and the Program Executive Office for Aviation,
Huntsville, Alabama; Oklahoma City Air Logistics Center, Tinker
Air Force Base, Oklahoma; Warner Robins Air Logistics Center,
Robins, Georgia; and several field locations of the Eighth U. S.
Army, Korea. We conducted our review from February to May 1999 in
accordance with generally accepted government audit standards. We
are sending copies of this report to the Honorable William S.
Cohen, Secretary of Defense; the Honorable F. W. Peters, Acting
Secretary of the Air Force; the Honorable Louis Caldera, Secretary
of the Army; the Honorable Richard Danzig, Secretary of the Navy;
the Honorable Jacob J. Lew, Director, Office of Management and
Budget; and interested congressional committees and members. We
will also make copies available to others upon request. B-282668
Page 24 GAO/NSIAD-99-154 Depot Maintenance Please contact me at
(202) 512- 8412 if you or your staff have any questions concerning
this report. Points of contact concerning this report and other
key contributors are listed in appendix III. David R. Warren,
Director Defense Management Issue B-282668 Page 25 GAO/NSIAD-99-
154 Depot Maintenance Page 26 GAO/NSIAD-99-154 Depot Maintenance
Contents Letter 1 Appendix I GAO Reports Concerning Public and
Private Sector Workload Distribution Reporting 28 Appendix II
Problems Found in DOD's Report on Fiscal Year 1998 Depot Workloads
30 Appendix III GAO Contacts and Staff Acknowledgments 41 GAO
Related Products 43 Tables Table 1: Reported Fiscal Year 1998 DOD
Depot Maintenance Workload Distributions 5 Figures Figure 1:
Percentage of DOD Depot Maintenance Workloads Performed by
Contractors (by dollar value) 6 Contents Page 27 GAO/NSIAD-99-154
Depot Maintenance Abbreviations AFMC Air Force Materiel Command
CLS contractor logistics support DCMC Defense Contract Management
Command DOD Department of Defense ICS interim contractor support
NAVAIR Naval Air Systems Command O& M operations and maintenance
OSD Office of the Secretary of Defense USSOCOM U. S. Special
Operations Command Page 28 GAO/NSIAD-99-154 Depot Maintenance
Appendix I GAO Reports Concerning Public and Private Sector
Workload Distribution Reporting Appendi x I In May 1996, we
reported 1 that the Department of Defense's (DOD) report of public
and private sector depot maintenance workload allocations did not
provide a complete, consistent, and accurate picture of depot
maintenance workloads. DOD's report did not include funding for
interim contractor support (ICS), contractor logistics support
(CLS), labor for installation of modification and upgrade kits and
software maintenance. In that report, we suggested that Congress
might wish to consider requiring that these workload categories be
included in future workload reports, regardless of funding source.
Similarly, in January 1998, we reported 2 that DOD's approach for
collecting information on public and private sector depot
maintenance workload allocations did not provide complete and
consistent reporting for the same workload categories. We noted
that DOD's guidance to the military departments was imprecise,
leaving room for varying interpretations on data to be reported.
To improve upon the accuracy of future workload distribution
reports, we recommended that DOD develop a standardized
methodology for annually collecting depot maintenance funding data
for the public and private sectors, including specific definitions
of the types of workloads and defense activities that should be
reported. Responding to an earlier draft of our January 1998
report, Office of the Secretary of Defense (OSD) issued guidance
in December 1997 that addressed many of our concerns regarding how
the workload distribution data should be collected and aggregated
to provide more complete and consistent reporting. In July 1998,
we reported 3 that the military departments had not developed
complete and consistent workload distribution information in their
February 1998 reports on the fiscal year 1997 workload. This
resulted in underreporting about $300 million for public sector
workloads and $1.6 billion for private sector workloads. We
identified several reasons for this underreporting. First, OSD
guidance continued to leave room for varying interpretation of
reporting requirements. Second, the military 1 Defense Depot
Maintenance: More Comprehensive and Consistent Workload Data
Needed for Decisionmakers (GAO/ NSIAD 96- 166, May 21, 1996). 2
Defense Depot Maintenance: Information on Public and Private
Sector Workload Allocations (GAO/NSIAD-98-41, Jan. 20, 1998). 3
Defense Depot Maintenance: Public and Private Sector Workload
Distribution Reporting Can Be Further Improved (GAO/NSIAD-98-175,
July 23, 1998). Appendix I GAO Reports Concerning Public and
Private Sector Workload Distribution Reporting Page 29 GAO/NSIAD-
99-154 Depot Maintenance departments had not developed internal
procedures and systems for accurate and timely reporting. Third,
the military departments had not resolved questions on the
inclusion of some depot- level workloads. We recommended that the
Secretary of Defense direct that the secretaries of the military
departments (1) establish and document internal operating
procedures for collecting data and reporting public and private
sector depot- level workload distribution and (2) develop
methodologies for aggregating and reporting the amount of funding
for depot- level work at nonworking capital funded repair sites.
We also recommended that the Secretary establish milestones for
issuing clarifying instructions and for resolving questions on
responsibilities for reporting depot- level maintenance for
selected maintenance. Page 30 GAO/NSIAD-99-154 Depot Maintenance
Appendix II Problems Found in DOD's Report on Fiscal Year 1998
Depot Workloads Appendi x I I As in prior years, our review of
selected data continued to find inaccurate and inconsistent
reporting. Some errors are attributable to simple transcription
and clerical mistakes, but many result from failure to follow
guidance, unclear instructions, inadequate management oversight,
lack of visibility of the data, and use of prospective and
budgetary data rather than actual recorded obligations. Major
upgrades, installation of modifications, interservice work (work
performed by one service but funded by another), CLS, and
maintenance performed at nondepot locations are more likely than
others to experience reporting problems. There are also questions
and uncertainties about reporting certain workloads and other
areas that require judgment. In addition, the line separating
depot- level maintenance from lower levels of maintenance is
becoming increasingly blurred as the services move depot and
depot- type workloads to operating locations, redefine required
levels of maintenance, and consolidate maintenance organizations.
Major Upgrades and Remanufactured Systems We determined that the
Army and the Navy did not consistently report workload data in the
2466 report and may have underreported the use of funds for
installation and related workloads on several major upgrade and
remanufacture programs. Service officials said these programs were
to improve performance and were production in nature and not
reportable as depot maintenance. OSD guidance, however, includes
overhaul, upgrading, and rebuilding in its definition of depot
maintenance and specifically directs that the installation of
performance upgrades and other modifications be reported,
regardless of the source of funds and location of the work. The
Army's supplementary instructions also state that the installation
of major modifications or upgrades of weapon systems that are
designed to improve performance are reportable and that, if
rebuild or overhaul is performed in conjunction with the
modification, the full cost of the rebuild or overhaul is
reportable as well as the cost to install the modification kit.
The Army instructions cite one upgrade program in question as an
example of reportable costs. Because of the differences in opinion
and inconsistent application of guidance, this area is one where
DOD needs to clarify reporting requirements. The Army did not
report obligations for depot- level installation workloads for the
Abrams Tank, the Bradley Infantry Fighting Vehicle, and the
Longbow Apache Helicopter upgrade programs funded by the
procurement appropriation. More than $1. 3 billion in procurement
funds were available to these programs during fiscal year 1998. A
DOD official estimated that about 10 percent, or $130 million, was
for installation. Army officials Appendix II Problems Found in
DOD's Report on Fiscal Year 1998 Depot Workloads Page 31
GAO/NSIAD-99-154 Depot Maintenance believed that these kinds of
performance upgrades and remanufacturing actions were not
reportable as depot maintenance. They consider these actions more
like new production because the upgraded systems receive new model
numbers and serial numbers. However, the Army did report the
depot- level obligations for the disassembly of components and
premodification work performed at Army depots and contractor
facilities on these weapon systems. For example, the Army reported
obligations totaling $38.5 million for the operations and
maintenance (O& M) funded disassembly of the Longbow Apache. Of
this total, $30.2 million was for contract obligations and $8. 3
million was for work performed at an Army depot. For the Abrams
and Bradley disassembly and premodification work, the Army
reported procurement funded obligations totaling $32.2 million ($
24.5 million for workload at Army depots and $7.7 million for
contractor workloads). The Navy's AV- 8B (Harrier) remanufacture
program modifies selected day attack Harriers to a radar/ night
attack capability. Aircraft are disassembled at the Cherry Point
Naval Aviation Depot in North Carolina, with specific parts being
shipped to the contractor facility to be used in the new
configuration. Navy officials did not report any funds for
installing the new configured parts at the contractor facility,
nor did they report $10.4 million in obligations for disassembly
work at Cherry Point. The total program cost in fiscal year 1998
was $327 million; using the estimate that installation costs
account for about 10 percent of program costs would indicate that
about $32.7 million was not reported. Program officials said that
they did not believe these kinds of costs were reportable under
the depot maintenance workload requirement because the
remanufactured aircraft will be a totally new system and that the
Navy lacks the capability to do the remanufacture. Program
officials had not received OSD's reporting guidance this year and
had not been tasked to report by Navy headquarters. The OSD
guidance specifies that all work performed at a DOD depot should
be reported. Other Modification Work On other modification work,
two naval commands did not report installations consistently and
one underreported its work. The Naval Air Systems Command (NAVAIR)
reported $217.4 million for aircraft modification installations,
but the Naval Sea Systems Command did not report about $176
million for installations. The Sea Systems official responsible
for data collection decided that installation of modifications
should not be reported because it was not maintenance and verbally
instructed her staff accordingly. However, that instruction
apparently was Appendix II Problems Found in DOD's Report on
Fiscal Year 1998 Depot Workloads Page 32 GAO/NSIAD-99-154 Depot
Maintenance not passed to program officials in the nuclear area
because they reported $62 million for installation of nuclear
equipment modifications. As discussed previously, the OSD guidance
states that installations on both performance upgrades and other
modifications should be reported as depot maintenance.
Interservice Workloads The Army and NAVAIR reported fiscal year
1998 interservice depot workloads of $11 million and $116.4
million, respectively. 1 Both assumed that DOD employees would
accomplish all this work, and they did not attempt to determine
whether the work was actually accomplished by a contractor.
Available data indicate that some of this interservice work was
performed in- house and some was contracted out. DOD reported
that, in fiscal year 1997, 21 percent of interservice workloads
were accomplished by contractors. The Air Force, in contrast to
the other services, queried its program managers and officials
responsible for managing interservice workloads to determine the
ultimate source of repair for the workloads it interservices to
the Army and the Navy. Its report to Congress included $170.7
million in workload accomplished at Army and Navy depots by
government employees and $14 million accomplished by contractors
(7. 6 percent of the total interservice). There are, however,
conflicting data on the interservice workload. The above amounts
included a total of $174.9 million that was financed through the
revolving depot fund; the remaining amounts were directly funded.
The 1998 annual financial statement of the Air Force revolving
fund reported only $121.5 million for interservice workloads. Air
Force Materiel Command financial and depot maintenance staff could
not reconcile the two numbers. In commenting on a draft of this
report, Air Force officials said financial records do not provide
sufficient detail to report the ultimate source of repair for all
interserviced workloads. Thus, Air Force officials said they
obtained source- of- repair data for interserviced workloads from
the individual centers. However, they provided no data to
reconcile the two data sources. 1 Depot workloads funded by one
service but performed either at another service's depot or by the
other service's contractor are called interservice workloads. OSD
guidance requires that the military department or defense agency
that manages the funding, or which owns the equipment being
repaired, should report the workload for the purposes of this
report. OSD guidance also requires that depot work will be
reported according to who does the actual work, regardless of the
location of the work. Air Force supplemental guidance elaborates
that the program manager or production specialist responsible for
the interservice workload will report whether the other service is
repairing the asset organically or by contract. Appendix II
Problems Found in DOD's Report on Fiscal Year 1998 Depot Workloads
Page 33 GAO/NSIAD-99-154 Depot Maintenance U. S. Special
Operations Command (USSOCOM) is not required to report under 10 U.
S. C. 2466. It does not have its own depots and, similar to
interservice arrangements, obtains depot maintenance from the
services on a reimbursable basis. For the fiscal year 1998 report,
USSOCOM officials allocated depot- level workloads on reparable
parts to the public and private sources for work sent to the Army
and the Navy but were not able to do so for the Air Force. An
official said that he lacked visibility into the Air Force's stock
fund to determine who performed the work. Consequently, USSOCOM
reported all $97 million in its Air Force reparable workload as
public sector workload. USSOCOM and Air Force officials could not
determine for us the ultimate sources of repair for this diverse
workload, but it appears that this assumption may have
significantly understated the private sector workload and
overstated the public work by the same amount. The Air Force's
fiscal year 1998 financial statement shows that about 35 percent
of depot- level reparable funds in total went to private
contractors. For another point of comparison, we obtained data
from the Warner Robins Air Logistics Center directorate that
manages special operating force programs. This data suggest an
even more pronounced private sector involvement. The center
directorate determined that $24.4 million of its fiscal year 1998
reparable workload was accomplished by contractors and only $2
million by the government. This workload consisted of maintenance
on both USSOCOM and Air Force owned equipment. CLS and ICS In
reviewing contract and financial records and through discussions
with officials, we identified several instances where program
officials overstated contract obligations because they did not
separate depot- related costs from the costs of other nondepot
services provided by contractors. We also identified a few
programs that incorrectly reported obligations through
misinterpreting guidance or reporting outdated data. Although DOD
had collected information on CLS and ICS 2 for weapon systems in
prior years, its report on fiscal year 1998 depot maintenance was
the first year it had reported to Congress in the current format.
Efforts to 2 CLS is designed to be a lifetime support concept in
which the contractor may provide some or all logistics support for
an operational weapon system or major component. In addition to
depot maintenance, support may include intermediate and base level
maintenance, supply operations, engineering services, and program
management. ICS is an interim arrangement, part of the acquisition
strategy for new systems and subsystems, in which a contractor
provides depot maintenance and, sometimes, other support services.
Appendix II Problems Found in DOD's Report on Fiscal Year 1998
Depot Workloads Page 34 GAO/NSIAD-99-154 Depot Maintenance obtain
and report data on CLS and ICS depot workloads can be somewhat
more difficult than for other types of maintenance because these
often require subjective judgments on the part of reporting
officials to isolate depot- related cost items from nondepot-
related items. For ICS programs, OSD guidance requires the
services only to report depot maintenance on weapon systems that
have passed their initial operating capability dates. 3 The ease
and exactness in isolating appropriate depot costs partly depend
upon how a contract is structured and how easy it is to clearly
identify depot tasks within the contract line items. If it is not
practical to determine the amount to be reported based on specific
contract line items or other direct means, the guidance permits
the use of algorithms or estimation formulas to determine the
portion to be reported. When other than actual obligations are
reported, the military department or defense agency is required to
maintain records on the amount of CLS and ICS reported and to
describe and explain any algorithm or estimation formula used in
making the projections. Although DOD does not consider TRICARE to
be a defense agency subject to the 50- 50 limitation, DOD wanted
to include this activity's depot maintenance data in the 2466 data
call for completeness. The TRICARE Management Activity
overreported CLS depot maintenance work by about $7 million by
including some tasks that are not considered to be depot
maintenance. OSD guidance tasked the TRICARE Management Activity
to report depot maintenance and repair for the C- 9A medical
evacuation aircraft funded by the Defense Health Program. The
TRICARE reporting official used records available to him and
reported $30.7 million in depot maintenance obligations for fiscal
year 1998. This amount represented the total annual program
obligations for CLS contracts. We reviewed contract records and
budgetary data and determined that $23. 7 million should have been
reported for depot maintenance during fiscal year 1998. In
addition to valid depot workload for programmed depot maintenance,
engine overhauls, and other depot- level tasks, the total amount
included base supply activities, engineering support, contractor
management costs, and other nondepot- related items. The Air Force
flies and maintains the C- 9 fleet for the Defense Health Program.
We understand that DOD plans to transfer reporting responsibility
to the Air Force starting with the fiscal year 2001 workload. 3
Initial operating capability refers to the date when the service
determines that a new system has been fielded in sufficient
numbers at its first operating base. Appendix II Problems Found in
DOD's Report on Fiscal Year 1998 Depot Workloads Page 35
GAO/NSIAD-99-154 Depot Maintenance USSOCOM reported the entire
amount$ 106.8 million obligated on its numerous CLS and ICS
contracts. It did not identify only the depot maintenance
portions. Reporting officials did not readily have information to
identify the reportable depot portions but, to the extent those
contracts also funded nondepot tasks, depot maintenance
obligations would be overstated. The Army National Guard
overreported depot- level maintenance obligations on CLS contracts
for fixed winged aircraft by about $40.3 million. An official
reported total obligations on contracts for fiscal year 1998
rather than only the depot- related obligations because he had not
received the Army's 1998 instructions and reported total
obligations as was done for the 1997 report. We determined that
the total obligations reported included $40. 3 million for base
operations, flying hours, and other nondepot related costs. By
excluding those items, we identified the $40.3 million
overreporting. An Army program official said that it is difficult
to distinguish between depot- level and nondepot activities for
these fixed winged aircraft. The contracts for logistics support
did not separately identify the depot maintenance portion of the
workload. The program office had received training and guidance on
making these judgments, but the Guard had not received the
guidance nor the training. We found several instances of
misreported and questionable amounts in the Air Force data. For
example, two programs had reported outdated budgetary estimates
rather than actual obligations, which were higher by about $5
million in total. Officials in one of those programs also
misinterpreted the instructions for reporting software
maintenance, which resulted in further underreporting CLS
obligations by $500,000. A third program overstated obligations by
$1 million by including some nondepot maintenance items. A fourth
CLS program, which serves many DOD customers at hundreds of
worldwide sites, primarily relied on the contractor's estimate of
depot costs. This program reported only 5 percent of its total
program as depot related, which was very low compared to other CLS
programs. Let t er Appendix II Problems Found in DOD's Report on
Fiscal Year 1998 Depot Workloads Page 36 GAO/NSIAD-99-154 Depot
Maintenance Difficulties in Distinguishing Depot Work From Other
Maintenance Performed at Nondepot Locations The distinction
between depot- level maintenance and other categories of
maintenance is becoming increasingly blurred as the services move
depot workloads to operating locations, redefine required levels
of maintenance, and consolidate maintenance organizations.
Traditionally, DOD has not considered these field activities and
activities funded by direct appropriation, rather than through the
working capital fund, as depot maintenance providers. OSD guidance
now requires the services to report maintenance work funded by all
funding sources, regardless of the location where work is
performed. Based on problems we identified at the limited
locations contacted, we believe that the services may have
underreported significant amounts of work at facilities that do
both depot level and other levels of maintenance work. Army For
the fiscal year 1998 workload report, the Army reported $112
million in depot- level work completed by local repair and
maintenance organizations operating at various field locations.
However, the approach and methodology that the field activities
used for collecting and accumulating workload data were
inconsistent. Officials at some field- level maintenance and
repair activities owned, managed, and funded by the Army's major
operational commands, said they did not know that they had to
report maintenance activities as depot maintenance since they were
not performed at a depot. Although the Army's reporting guidelines
follow the definitions in 10 U. S. C. 2460 and OSD guidance for
identifying depot maintenance workloads, personnel who were
assigned to the operating commands and who were responsible for
accumulating data for inclusion in the report did not fully
understand the requirements. Consequently, several major operating
commands applied different data collection methodologies that led
to inaccurate and inconsistent reporting. For example, the
Training and Doctrine Command reported labor and materials
obligations for only the depot- level tasks associated with items
for which the command had obtained a special repair authority 4
from Army headquarters, while the European Command reported all
depot level and general support tasks. Reporting officials at the
Eighth Army in Korea were new to the reporting requirements and
had some difficulties interpreting and applying the guidance. 4 A
special repair authority is a one- time or continued authority
granted by Army headquarters that allows a field location to
perform specified depot- level maintenance. Appendix II Problems
Found in DOD's Report on Fiscal Year 1998 Depot Workloads Page 37
GAO/NSIAD-99-154 Depot Maintenance Total Amount of Depot
Maintenance Conducted at Army Field Locations Cannot Be Determined
As directed by the House Committee on National Security, the Army
recently completed a study of the proliferation of depot-
maintenance type activities. 5 The Army's April 1999 report
concluded that it currently lacks information to accurately
determine the total amount of depot maintenance and similar work
being conducted at field activities. The Army's maintenance
manuals and policy statements have not been updated to reflect the
depot maintenance definitions enacted by Congress and codified
under 10 U. S. C. 2460. Maintenance manuals and policy statements
currently reflect a four- level system consisting of unit level,
direct support, general support, and depot level. 6 In discussing
the Army's study, Army headquarters officials told us they plan to
revise their maintenance manuals and policy statements to redefine
levels of maintenance. The current depot and general support
levels will be combined and relabeled as sustainment maintenance
workload-- tasks that involve overhauling and rebuilding items and
should be reported as depot level in future workload reports. Army
officials believe these changes will enable commands to develop
more complete and consistent workload data for future reporting
cycles. The Army's depot proliferation report states that the
total amount of depot- level maintenance work conducted at field
locations is unknown. It stated that field level activities
completed 40 staff years of depot- level work at a reported cost
of $17.6 million under special repair authorities granted by Army
command headquarters. The report also provided information
indicating that unknown resources were expended overhauling and
rebuilding various Army equipment work that the Army's maintenance
classification and reporting procedures did not recognize and
categorize as depot- level workload, but which could be considered
as depot maintenance under the 10 U. S. C. 2460 definition. The
report also stated that the workload allocation reporting process
did not accurately reflect the total dollar value of the depot
workload performed in field locations. The workload was
overreported in some cases and underreported in others. The report
concluded that reporting problems were largely attributed to (1)
differing interpretations of the OSD guidance and 10 U. S. C. 2460
and OSD definitions of depot- level maintenance, especially with 5
Directed by H. R. 105- 532 on the Defense Authorization Act for
Fiscal Year 1999, the completed Study of the Proliferation of
Depot Maintenance- Type Activities was submitted to Congress on
April 14, 1999. 6 Unit and direct support maintenance is generally
conducted by deployable military units. General support and depot
maintenance generally is conducted by personnel working in fixed
industrial- like facilities. Appendix II Problems Found in DOD's
Report on Fiscal Year 1998 Depot Workloads Page 38 GAO/NSIAD-99-
154 Depot Maintenance respect to rebuilding, remanufacturing, and
specialized repair type work, and (2) reporting officials lacking
effective systems to facilitate timely and accurate reporting. We
are currently completing a separate review on this issue. Navy The
Navy did not report any of the $158 million it expended on
maintenance support at the Trident Refit Facilities in Bangor,
Washington, and Kings Bay, Georgia. While some officials labeled
them as intermediate- level maintenance and repair facilities, the
activities were specifically designed to provide incremental depot
overhaul and repair of the Trident submarine fleet and depot-
level repair of Trident equipment. The facilities also provide
routine services and perform emergency and emergent voyage repairs
to other submarine units. Navy documents cite extensive facility
capabilities, dry- dock, and equipment that indicate a depot
capability. The refit facilities performed depot overhauls on some
smaller surface vessels to better utilize their facilities.
However, in their official comments to our July 1998 report, the
Navy stated that no depot- level maintenance is performed at the
refit facilities. Other Navy officials told us that the refit
facilities are the only locations where any Trident maintenance is
done. This raises a question how submarines that have been in
service for at least 15 years can have no depot maintenance
performed on them. Additional Miscellaneous Errors and Omissions
Our review of financial records, summary spreadsheets, and other
materials supporting DOD's workload report, and discussions with
officials identified a wide variety of other errors and reporting
uncertainties. Navy In the workload numbers reported to Congress
(table 1), the Navy reversed its public- private workload figures
for the Atlantic and Pacific fleets and misreported $267, 000 as
$267 million. The net effect of these two errors decreased the
Navy's total workload and its private sector workload, increased
the public sector workload, and changed the public- private sector
allocation percentages from the reported 58/ 42 to 65/ 35.
Appendix II Problems Found in DOD's Report on Fiscal Year 1998
Depot Workloads Page 39 GAO/NSIAD-99-154 Depot Maintenance Based
on work we reported 7 in February 1999, we believe that the public
workload numbers reported by the Atlantic Fleet included some
amount that was contracted to the private sector. In general, for
the workload that is sent to the public shipyards, government
employees do most of the major overhaul work while the ship is in
drydock. Private sector employees, either on the shipyard or at
private facilities, however, accomplish some work. Fleet officials
reported the entire workload as accomplished in the public sector.
We reported that about $30 million of the $538 million of work
sent to the Norfolk Naval Shipyard in fiscal year 1998 was
contracted to private firms. It is likely that some funds also
flow through the other public shipyards to contractors but we did
not make an effort to identify comparable situations. The Navy
made two additional errors that resulted in overstating contract
obligations by $41.5 million. Obligations for nonequipment ship
alterations were double- counted, and estimated costs for
installations had been reported based on a budget figure, which
turned out to be greater than actual obligations for the year. Air
Force The Air Force adjusted its workload figures to transfer $24
million from private sector obligations to the public sector.
Officials subtracted 1.5 percent of its total contracted workload
that is funded through the depot maintenance revolving fund and
added that amount to the public sector amount. The 1. 5- percent
figure is based on an element in the pricing structure for
contracted items that estimate the salaries for government
personnel charged with contract management. The Air Force
maintains that this should be reported as a public sector
government workload to be consistent with 10 U. S. C. 2466 that
specifies the reporting of government employee costs as public
sector obligations. This area is not clearly dealt with in
existing guidance. The Air Force may have underreported
maintenance warranty costs by an undetermined amount. Officials
did report warranty costs of $3.4 million for four programs, but
Materiel Command officials and the auditors believe that more
programs could have reportable warranty costs. For example, one
product center reported $1.2 million, the fiscal year 1998 portion
of a 10- year extended warranty for the AGM- 130. Other programs
at the 7 Navy Ship Maintenance: Allocation of Ship Maintenance
Work in Norfolk, Virginia, Area (GAO/NSIAD-99-54, Feb. 24, 1999).
Appendix II Problems Found in DOD's Report on Fiscal Year 1998
Depot Workloads Page 40 GAO/NSIAD-99-154 Depot Maintenance product
center, including Joint Direct Attack Munitions, Advanced Medium
Range Air to Air Missile, and sensor fused weapon, have similar
warranties but no depot costs were reported for these programs.
Warranties may be another reporting category that could be
clarified in future guidance. In commenting on a draft of this
report, Air Force officials said that costs occurring prior to
initial operating capability would not meet the 10 U. S. C. 2460
definition of depot- level maintenance and would not be included
in the Air Force submission. However, both they and other
officials agreed that additional guidance will be provided in the
future regarding the applicability of warranty costs to 2466
reporting. Army At the Army's Aviation and Missile Command,
program officials did not coordinate data collection actions with
officials at the integrated maintenance center. This resulted in
double counting some items, which overstated obligations by $1. 8
million. Also, two program offices reported their budgeted
programs rather than actual obligations, overstating reported
workload by $600,000. U. S. Special Operations Command An error in
the computation formula used by the Special Operations Command to
report its depot workload resulted in a $69- million
understatement in both the total amount and the private sector
amount. Correcting this changes the public- private sector
percentages from the reported 70/ 30 to 58/ 42. Page 41 GAO/NSIAD-
99-154 Depot Maintenance Appendix III GAO Contacts and Staff
Acknowledgments Appendi x I I I GAO Contacts Barry Holman (202)
512- 5581 Julia Denman (202) 512- 4290 Acknowledgements In
addition to those named above, Bruce Fairbairn, Raymond Cooksey,
Andrew Marek, Glenn Knoepfle, Frederick Naas, Terry Wyatt, Jean
Orland, and Kate Monahan made key contributions to this report.
Page 42 GAO/NSIAD-99-154 Depot Maintenance Page 43 GAO/NSIAD-99-
154 Depot Maintenance GAO Related Products Army Logistics:
Uncertainties Surrounding Proposed Support Plan for Apache
Helicopter (GAO/NSIAD-99-140, May 25, 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, 1999). Defense
Depot Maintenance: Public and Private Sector Workload Distribution
Reporting Can Be Further Improved (GAO/NSIAD-98-175, July 23,
1998) Defense Depot Maintenance: Use of Public- Private
Partnership Arrangements (GAO/NSIAD-98-91, May 7, 1998). Defense
Depot Maintenance: DOD Shifting More Workload for New Weapon
Systems to the Private Sector (GAO/NSIAD-98-8, Mar. 31, 1998). DOD
Depot Maintenance: Information on Public and Private Sector
Workload Allocations (GAO/NSIAD-98-41, Jan. 20, 1998). Defense
Depot Maintenance: Challenges Facing DOD in Managing Working
Capital Funds (GAO/ T- NSIAD/ AIMD- 97- 152, May 7, 1997). Depot
Maintenance: Uncertainties and Challenges DOD Faces in
Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-111,
Mar. 18, 1997, and GAO/ T- NSIAD- 112, Apr. 10, 1997). Navy
Ordnance: Analysis of Business Area Price Increases and Financial
Losses (GAO/ AIMD/ NSIAD- 97- 74, Mar. 14, 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).
Defense Depot Maintenance: DOD's Policy Report Leaves Future Role
of Depot System Uncertain (GAO/NSIAD-96-165, May 21, 1996). Letter
GAO Related Products Page 44 GAO/NSIAD-99-154 Depot Maintenance
Defense Depot Maintenance: More Comprehensive and Consistent
Workload Data Needed for Decisionmakers (GAO/NSIAD-96-166, May 21,
1996). Defense Depot Maintenance: Privatization and the Debate
Over the Public- Private Mix (GAO/T-NSIAD-96-146, Apr. 16, 1996,
and GAO/T- NSIAD-96-148, Apr. 17, 1996). Closing Maintenance
Depots: Savings, Personnel, and Workload Redistribution Issues
(GAO/NSIAD-96-29, Mar. 4, 1996). Depot Maintenance: Issues in
Allocating Workload Between the Public and Private Sectors (GAO/T-
NSIAD-94-161, Apr. 12, 1994). Depot Maintenance (GAO/NSIAD-93-
292R, Sept. 30, 1993). Depot Maintenance: Issues in Management and
Restructuring to Support a Downsized Military (GAO/T-NSIAD-93-13,
May 6, 1993). Air Logistics Center Indicators (GAO/NSIAD-93-146R,
Feb. 25, 1993). (709392) Letter Ordering Information The first
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