Depot Maintenance: Issues in Allocating Workload Between the Public and
Private Sectors (Testimony, 04/12/94, GAO/T-NSIAD-94-161).

The Pentagon each year spends about $15 billion for depot maintenance,
modifications and upgrades to support aircraft, combat vehicles, wheeled
vehicles, ships, and other equipment.  In the context of the military
downsizing, the Defense Department (DOD) needs to acquire depot
maintenance activities cost effectively while supporting industrial base
needs in both the public and private sectors.  Central to the debate
over defense depot maintenance are questions about how much workload
should be retained in the public depots as "core" capability, whether a
service should be allowed to have its own core capability, and how the
remaining non-core workload should be allocated between the public and
private sectors.  GAO testified that the amount of money going to the
private sector is much higher than reported--at least half of the
current depot maintenance funding.  Although GAO has concerns about
public-private competition and the amount of savings is hard to
quantify, GAO believes that the program can cut depot maintenance costs.
GAO supports many of the task force's findings and recommendations, but
areas of disagreement exist.  For example, GAO agrees that a rational
maintenance core policy needs to be identified but believes that this
should be done throughout DOD rather than on a service-specific basis.
None of the maintenance depots targeted for closure have shut down yet.
DOD appears to have an effective program to help employees find new
jobs, although some workers may have to settle for lower-paying
positions. Concerns have also been raised about other aspects of the
depot closures.

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

 REPORTNUM:  T-NSIAD-94-161
     TITLE:  Depot Maintenance: Issues in Allocating Workload Between 
             the Public and Private Sectors
      DATE:  04/12/94
   SUBJECT:  Base closures
             Base realignments
             Military materiel
             Federal agency reorganization
             Defense procurement
             Maintenance services contracts
             Unfair competition
             Equipment maintenance
             Defense contingency planning
             Military inventories
IDENTIFIER:  DOD Base Realignment and Closure Account
             F/A-18 Aircraft
             DOD Depot Maintenance Performance Measurement System
             
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