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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

September 2014: 

Depot Maintenance: 

Accurate and Complete Data Needed to Meet DOD's Core Capability 
Reporting Requirements: 

GAO-14-777: 

GAO Highlights: 

Highlights of GAO-14-777, a report to congressional committees. 

Why GAO Did This Study: 

DOD uses both military depots and contractors to maintain many complex 
weapon systems and equipment. Recognizing the key role of the depots 
and the risk of overreliance on contractors, Section 2464 of Title 10 
of the U.S. Code requires DOD to maintain a core maintenance 
capability-—a government-owned and -operated combination of personnel, 
facilities, equipment, processes, and technology that is needed to 
meet contingency and other emergency requirements. Section 2464 
requires DOD to provide a Biennial Core Report to Congress that 
includes three elements: (1) core capability requirements, (2) planned 
workload, and (3) a detailed rationale and mitigation plans for any 
shortfalls between core capability requirements and planned workload. 
Section 2464 mandated that GAO review DOD's Biennial Core Report for 
compliance and completeness. 

GAO assessed the extent to which the report complies with the three 
elements of the statute and the completeness of the report. GAO 
reviewed relevant legislation, DOD's 2014 Biennial Core Report, the 
military services' submissions to support the report, and related DOD 
guidance. 

What GAO Found: 

The Department of Defense's (DOD) 2014 Biennial Core Report to 
Congress complies with two of the three required reporting elements of 
Section 2464-—core capability requirements and planned workload. It 
partially complies with the third element—-a detailed explanation or 
rationale for shortfalls and accompanying mitigation plans. 
Specifically, the report includes mitigation plans for the Marine Corps'
 shortfall but does not clearly provide an explanation of the 
identified shortfall. In February 2013, GAO recommended that DOD 
improve its Biennial Core Report by including detailed explanations of 
why the military services do not have the workload to meet core 
capability requirements for each identified shortfall. DOD concurred 
and stated that it would include such explanations in future reports. 
Fully implementing the recommendation would provide Congress 
visibility into whether the military services' plans will address the 
causes of the shortfalls. 

Table: Extent to Which the Department of Defense's Report Complies 
with the Law: 

Required Reporting Element: Core Capability Requirements; 
Compliance[A]: Complied. 

Required Reporting Element: Planned workload; 
Compliance[A]: Complied. 

Required Reporting Element: Explanations and mitigation plans for any 
shortfalls; 
Compliance[A]: Partially Complied. 

Source: GAO analysis of DOD data from its 2014 Biennial Core Report. 
GAO-14-777. 

[A] Note: Complied refers to the report explicitly including all parts 
of the required reporting element. Partially complied refers to the 
report including some, but not all, aspects of the required reporting 
element. 

[End of table] 

Regarding completeness—-including accurate data and supporting 
information from the military services—-the report contains data 
errors for the first two elements and incomplete information for the 
third element. The information on core capability requirements is 
complete for the Army and the Air Force. However, the information on 
core capability requirements for the Navy and Marine Corps is 
incomplete due to errors such as under stated or misidentified data. 
For example, DOD incorrectly identified and included workload for the 
Marine Corps' Sea Ships category as a core capability requirement. DOD 
reports complete information for the Air Force's planned workload 
available for supporting its core capability, but GAO identified data 
errors in the information for the other military services. 
Specifically, the planned workload reported for both the Navy and 
Marine Corps are inaccurate, as are the estimated costs of planned 
workload reported for the Army, Navy, and Marine Corps. According to 
DOD officials, the data errors in its report resulted from 
inadvertently not obtaining data from subordinate military service 
organizations, transposing numbers, and unintentionally misidentifying 
information when preparing the final report. While the report provides 
an explanation for the Air Force's identified shortfall, it does not 
provide detailed information in the mitigation plan about how the Air 
Force's intended actions will address the effects of the shortfall. 
Officials from the Office of the Secretary of Defense stated that they 
had reviewed each military service's information submission and, 
before DOD's final report was issued, the military services had been 
given the opportunity to review and correct the report. By assessing 
the processes used to review the military services' submissions and 
prepare the final report, DOD would be better positioned to ensure 
that the report is complete and accurate. 

What GAO Recommends: 

GAO recommends that DOD assess its review processes and implement 
needed improvements to ensure that future submissions of the Biennial 
Core Report will be more accurate and complete. DOD concurred with 
this recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-14-777. For more 
information, contact Zina Merritt at (202) 512-5257 or 
merrittz@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

DOD's Report Complies with Two of the Three Reporting Elements and 
Partially Complies with the Third, but Some Data are Incomplete: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Category Levels from DOD's Depot Maintenance Core 
Capability Worksheet: 

Appendix III: Revised Core Maintenance Capability by Military Service: 

Appendix IV: Comments from the Department of Defense: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: First-Level Categories of the Work Breakdown Structure: 

Table 2: Example of Category Levels for Aircraft: 

Table 3: GAO Assessment of the Extent to Which the Department of 
Defense's (DOD) 2014 Biennial Core Report Complies with the Required 
Reporting Elements in Section 2464: 

Table 4: Core Capability Requirements by Military Service as Reported 
in the Department of Defense's (DOD) 2014 Biennial Core Report dated 
June 6, 2014 and Revised by DOD as of July 10, 2014: 

Table 5: Planned Workload by Military Service as Reported in the 
Department of Defense's (DOD) 2014 Biennial Core Report dated June 6, 
2014 and Revised by DOD as of July 10, 2014: 

Table 6: Shortfalls in Direct Labor Hours by Military Service and Work 
Breakdown Structure as Reported in the Department of Defense's (DOD) 
2014 Biennial Core Report dated June 6, 2014: 

Figures: 

Figure 1: Army and Navy Data as Reported in the Department of 
Defense's (DOD) 2014 Biennial Core Report dated June 6, 2014 and 
Revised by DOD as of July 10, 2014: 

Figure 2: Marine Corps and Air Force Data as Reported in the 
Department of Defense's (DOD) 2014 Biennial Core Report dated June 6, 
2014 and Revised by DOD as of July 10, 2014: 

Abbreviations: 

DOD: Department of Defense: 

OSD: Office of the Secretary of Defense: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

September 18, 2014: 

Congressional Committees: 

The Department of Defense (DOD) maintains many complex weapon systems 
(such as aircraft and ships) and equipment (such as generators and 
radars) that require regular and emergency maintenance[Footnote 1] to 
continue being available for DOD to meet national security goals. To 
sustain these systems and equipment, at the depot level,[Footnote 2] 
the department uses a combination of military depots--public-sector 
facilities that are government-owned and government-operated--and 
private-sector contractors. Depots have a key role in sustaining the 
complex weapon systems and equipment both in peacetime and during a 
mobilization, contingency, or other emergency. Through these depots, 
DOD has what is referred to as the "capability" to perform needed 
repair work by maintaining a combination of skilled personnel, 
facilities, equipment, processes, and technology for each category of 
maintenance work being done. 

Recognizing the important role of the depots in supporting U.S. 
forces, and the risk of overreliance on private contractors for vital 
military needs, Congress enacted legislation in 1984 that exempts 
certain core maintenance activities identified by the Secretary of 
Defense from being contracted out.[Footnote 3] The statute was later 
codified at Section 2464 of Title 10 of the United States Code and has 
been amended several times. Among other things, Section 2464 requires 
DOD to: 

* maintain a "core depot-level maintenance and repair capability"--a 
maintenance and repair capability that is government-owned and 
-operated--to provide a ready and controlled source of technical 
competence and resources to ensure effective and timely response to 
mobilizations, contingencies, or other emergencies and: 

* assign these government-owned and -operated facilities (the depots) 
sufficient workload[Footnote 4] to ensure that the department can 
maintain cost efficiency and technical competence during peacetime 
while preserving the ability to respond to a mobilization, 
contingency, or emergency. 

The military services are required by DOD policy[Footnote 5] to use a 
computational methodology to identify their essential core capability 
requirements and their planned workload[Footnote 6] to support this 
core maintenance capability. The military services must submit 
biennially an internal report that shows the results of this analysis 
and any identified shortfalls between requirements and planned 
workload to the Secretary of Defense. 

The National Defense Authorization Act for Fiscal Year 2012[Footnote 
7] amended Section 2464 to require DOD to, among other things, submit 
a biennial report to Congress, no later than April 1 of each even-
numbered year. The statute states that DOD is required to identify the 
following three elements for each military service, for the subsequent 
fiscal year: 

1. The core depot-level maintenance and repair capability requirements 
and sustaining workloads, organized by work breakdown structure 
expressed in direct labor hours;[Footnote 8] 

2. The corresponding workloads necessary to sustain core depot-level 
maintenance and repair capability requirements, expressed in direct 
labor hours and cost; and: 

3. In any case where core depot-level maintenance and repair 
capability requirements exceed or are expected to exceed sustaining 
workloads, a detailed rationale for the shortfall and a plan either to 
correct or mitigate the effects of the shortfall. 

In this report, we summarize these three elements as (1) core 
capability requirements--this refers to the workload required to 
sustain core maintenance capability; (2) the planned workload 
available; and (3) in any case where the required workload exceeds the 
planned workload--where there are shortfalls--a detailed rationale or 
explanation of why planned workload is insufficient and a plan to 
correct or mitigate the effects of the shortfall.[Footnote 9] 

The statute mandates us to analyze DOD's Biennial Core Report for 
compliance with Section 2464. In addition, the statute mandates us to 
assess the completeness of the report and provide findings and 
recommendations after DOD submits its report to Congress. We assessed 
the extent to which DOD's 2014 Biennial Core report complies with 
Section 2464 and assessed the accuracy and completeness of the 
information in the report. 

In February 2013, we found that DOD's first Biennial Core Report, 
which was issued in 2012, complied with two of the three biennial 
reporting elements of Section 2464 by including information on core 
capability requirements and planned workload available for maintaining 
these requirements. We also found that the report partially complied 
with the third biennial reporting element. Specifically, DOD's report 
included information on shortfalls, as well as plans to mitigate all 
shortfalls where requirements exceeded planned workload. However, the 
report did not include required information on the rationale for some 
of these shortfalls--reasons why the military services did not have 
the workload to meet core requirements. We recommended that DOD 
improve its Biennial Core Report by including detailed explanations of 
why the military services did not have the workload to meet core 
maintenance requirements for each identified shortfall.[Footnote 10] 
DOD agreed with our recommendation and stated that it would include an 
explanation and mitigation plan for each workload shortfall identified 
in all future reports. For a listing of relevant past GAO work, see 
the Related GAO Products list at the end of this report. 

DOD submitted its second Biennial Core Report to Congress on June 6, 
2014. This report assessed the extent to which DOD's 2014 report 
complies with the three reporting elements required by Section 2464 
and is complete. 

To assess the extent to which DOD's 2014 Biennial Core Report complies 
with Section 2464, we analyzed the text of the report, compared the 
text of the report with the elements in the statute, and obtained 
information on the core determination process by which DOD identified 
its essential core capability requirements and the workload needed to 
support this core maintenance capability for fiscal year 2015. When 
the report explicitly included all parts of the required reporting 
element, we determined that DOD "complied" with the element. When the 
report did not explicitly include any part of the element, we 
determined that DOD "did not comply." If the report included some 
aspects of an element, but not all, then we determined that DOD 
"partially complied." In those cases where we had determined that the 
report did not include some aspects of a required element, we 
discussed our preliminary analyses with the Office of the Secretary of 
Defense (OSD) and military service officials to seek additional 
information. To assess the report's completeness, we obtained and 
analyzed fiscal year 2015 data, including core capability requirements 
and sustaining workload expressed in direct labor hours and cost, and 
other information such as workload shortfall explanations that OSD 
required the military service headquarters to submit in support of the 
report. In order to determine this data and information's 
completeness, we performed a number of data check steps to identify 
inconsistencies or errors and discussed our analyses with OSD and 
military service officials, which led us to conclude that the data 
were sufficiently reliable for the purposes of this report. We 
assessed the accuracy and completeness of the information in DOD's 
2014 Biennial Core Report with criteria outlined in Standards for 
Internal Control in the Federal Government.[Footnote 11] 

We conducted this performance audit from June 2014 to September 2014 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. We discuss our 
scope and methodology in more detail in appendix I. 

Background: 

Determining Core Maintenance Capability: 

DOD Instruction 4151.20[Footnote 12] prescribes a depot maintenance 
core capabilities determination process to identify, in part, the (1) 
required core capabilities for depot maintenance and (2) planned 
workload needed to support those capabilities. Within OSD, the 
Assistant Secretary of Defense for Logistics and Materiel Readiness is 
responsible for, among other things, maintaining the instruction. The 
instruction describes a series of mathematical computations and 
adjustments which the military services use to compute their core 
capability requirements and to identify planned workload needed to 
support these requirements. The military services identify the weapon 
systems required to execute the Joint Chiefs of Staff contingency 
[Footnote 13] scenarios, which represent plans for responding to 
conflicts that may occur in the future. After the systems are 
identified, the military services compute annual depot maintenance 
capability requirements for peacetime in direct labor hours to 
represent the amount of time they regularly take to perform required 
maintenance. Next, the military services make contingency requirements 
and resource[Footnote 14] adjustments to account for applicable surge 
factors during the different phases of a contingency, such as 
preparation/readiness and sustainment. The military services make 
further adjustments to account for redundancy in depot capability. For 
example, a military service may determine that repair capabilities for 
specific systems maintained in military depots are so similar that 
they share common base repair processes, technologies, and 
capabilities that can effectively satisfy the repair requirements of 
other systems. The military services adjust the core capability 
requirements when one service's maintenance requirements will be 
supported by the maintenance capabilities of other military services. 

During this process of identifying the systems for which they will be 
required to maintain repair capabilities, the military services 
organize and aggregate their capability data by categories of 
equipment and technologies known as work breakdown structure 
categories. The work breakdown structure provides a way for DOD to 
break down a category of weapon system or equipment into subcategories 
of its parts at increasingly lower levels of detail. The work 
breakdown structure can be expressed at any level of detail down to 
the lowest-level part, such as a bolt. These categories, the programs 
or systems they include, and the lower-level elements or subcategories 
of defense materiel or equipment into which they are broken down are 
referred to by DOD as "levels of indenture." There are 11 categories 
at the top level--"first" level--of the work breakdown structure. A 
first-level category summarizes information for an entire type of 
system or equipment, such as aircraft or ground vehicles. Table 1 
shows the 11 first-level categories of the work breakdown structure. 

Table 1: First-Level Categories of the Work Breakdown Structure: 

Category number: 1; 
Work breakdown structure category at the first level: Aircraft. 

Category number: 2; 
Work breakdown structure category at the first level: Ground Vehicles. 

Category number: 3; 
Work breakdown structure category at the first level: Sea Ships. 

Category number: 4; 
Work breakdown structure category at the first level: 
Communication/Electronic Equipment. 

Category number: 5; 
Work breakdown structure category at the first level: Support 
Equipment. 

Category number: 6; 
Work breakdown structure category at the first level: Ordnance, 
Weapons, & Missiles. 

Category number: 7; 
Work breakdown structure category at the first level: Software. 

Category number: 8; 
Work breakdown structure category at the first level: 
Fabrication/Manufacturing. 

Category number: 9; 
Work breakdown structure category at the first level: Fleet/Field 
Support. 

Category number: 10; 
Work breakdown structure category at the first level: Special Interest 
Items. 

Category number: 11; 
Work breakdown structure category at the first level: Other[A]. 

Source: Department of Defense. GAO-14-777. 

[A] The "Other" category encompasses a number of other items that do 
not clearly fall under the remaining 10 categories, such as fire 
trucks, tractors, and missile transport trailers. 

[End of table] 

A first-level category can be broken down into second-level 
subcategories, which are the major elements that make up the system or 
equipment in the first-level category. For example, the first-level 
category for Aircraft can be broken down into the second-level 
subcategories for Airframes, Aircraft Components, and Aircraft 
Engines, which are major elements that make up an aircraft. The second-
level subcategories can be further broken down into third-level 
subcategories, which are subordinate elements that make up the major 
elements in the second-level categories. For example, the second-level 
subcategory for Airframes is further divided into the third-level 
subcategories--different types of airframes, such as Rotary, Fighter/ 
Attack, or Bomber. The subcategories can be further broken down to the 
lowest-level element of the system. Table 2 shows an example of the 
top three levels of the work breakdown structure for Aircraft. 

Table 2: Example of Category Levels for Aircraft: 

Level: First; 
Category number: 1; 
Work breakdown structure category: Aircraft. 

Level: Second; 
Category number: 1.1; 
Work breakdown structure category: Airframes. 

Level: Third; 
Category number: 1.1.1; 
Work breakdown structure category: Rotary. 

Level: Third; 
Category number: 1.1.2; 
Work breakdown structure category: Vertical and/or Short Take-off 
Landing Aircraft. 

Level: Third; 
Category number: 1.1.3; 
Work breakdown structure category: Cargo/Tanker. 

Level: Third; 
Category number: 1.1.4; 
Work breakdown structure category: Fighter/Attack. 

Level: Third; 
Category number: 1.1.5; 
Work breakdown structure category: Bomber. 

Level: Third; 
Category number: 1.1.6; 
Work breakdown structure category: Aircraft-Other. 

Source: Department of Defense. GAO-14-777. 

[End of table] 

After the military services have identified their core capability 
requirements, they are to identify the amount of available planned 
workload within the work breakdown structure categories and 
subcategories. 

Reporting Core Maintenance Capability: 

DOD Instruction 4151.20 requires the military services to report 
biennially to OSD their core capability requirements and planned 
workload, in accordance with a tasking memorandum issued for each 
reporting cycle. The instruction includes a worksheet that the 
military services are to fill out and submit to OSD. The worksheet 
calls for information to be organized by the work breakdown structure 
to various subcategory levels, mostly at the second level of 
subcategories. Appendix II provides a table listing these categories 
and subcategories. 

On December 17, 2013, OSD issued the tasking memorandum for the 2014 
Biennial Core Report, which directed the military services to use DOD 
Instruction 4151.20 as basic guidance and included further guidance on 
how to meet the requirement under Section 2464 to report this 
information to Congress. The memorandum augments the worksheet by 
adding another column for the estimated costs of performing the 
planned workload at the first level of categories. The instruction and 
tasking memorandum also require the military services to provide 
additional information when reporting shortfalls in planned workloads. 
If a military service does not have sufficient workload to sustain the 
required level of capability that has been identified, a shortfall 
exists; in other words, the military depots have not been assigned the 
depot maintenance workload that would enable them to sustain their 
identified core capability requirements. For example, a military 
service may have identified 10,000 direct labor hours of core 
capability requirements for ground vehicles but have only 4,000 hours 
of anticipated depot maintenance work for ground vehicles. This 
military service will have a shortfall of 6,000 hours. The instruction 
requires that the military services report on shortfalls by providing 
a description and plan to address the shortfalls along with the 
worksheet, but the shortfalls are not calculated in the worksheet. 

DOD's Report Complies with Two of the Three Reporting Elements and 
Partially Complies with the Third, but Some Data are Incomplete: 

DOD's 2014 Biennial Core Report to Congress complies with two of the 
three required reporting elements of Section 2464--core capability 
requirements and planned workload. Specifically, the report provides 
data on (1) core capability requirements workload in direct labor 
hours, and (2) planned workload required to sustain the required 
workloads and the cost of sustaining the core depot maintenance 
workload organized by work breakdown structure. It partially complies 
with the third element--a detailed explanation or rationale for 
shortfalls and accompanying mitigation plans. Specifically, the report 
includes mitigation plans for the Marine Corps' shortfall but does not 
clearly provide an explanation for the identified shortfall. Regarding 
completeness--including accurate data and supporting information from 
the military services--the report contains data errors for the first 
two elements and incomplete information for the third element. 
Specifically, the report provides an explanation for the Air Force's 
identified shortfall but does not provide detailed information in the 
mitigation plan about how the Air Force's intended actions will 
address the effects of the shortfall. Table 3 shows a summary of our 
assessment of the compliance of DOD's 2014 Biennial Core Report to 
Congress. 

Table 3: GAO Assessment of the Extent to Which the Department of 
Defense's (DOD) 2014 Biennial Core Report Complies with the Required 
Reporting Elements in Section 2464: 

Required Reporting Elements: The core depot-level maintenance and 
repair capability requirements and sustaining workloads, organized by 
work breakdown structure, expressed in direct labor hours; 
GAO Assessment of Compliance[A]: Complied. 

Required Reporting Elements: The corresponding workloads necessary to 
sustain core depot-level maintenance and repair capability 
requirements, expressed in direct labor hours and costs; 
GAO Assessment of Compliance[A]: Complied. 

Required Reporting Elements: In any case where core depot-level 
maintenance and repair capability requirements exceed or are expected 
to exceed sustaining workloads, a detailed rationale for the shortfall 
and a plan either to correct, or mitigate, the effects of the 
shortfall; 
GAO Assessment of Compliance[A]: Partially Complied. 

Source: GAO analysis of DOD data from its 2014 Biennial Core Report. 
GAO-14-777. 

[A] Note: Complied refers to the report explicitly including all parts 
of the required reporting element. Partially complied refers to the 
report including some, but not all, aspects of the required reporting 
element. 

[End of table] 

The Report Includes Information on Core Capability Requirements for 
All Military Services but Includes Data Errors for Some Services: 

The report includes the core requirements information expressed in 
direct labor hours and organized by work breakdown structure for each 
of the military services. As reported, DOD's total core capability 
requirements are about 61 million direct labor hours. 

The information in DOD's report on core capability requirements for 
each of the military services is aggregated to the top-level 
categories of the work breakdown structure, even though OSD collects 
information at a lower level. Section 2464 requires the information in 
the Biennial Core Report to be organized by work breakdown structure; 
however, the statute does not specify at which category level of the 
work breakdown structure the information should be reported. To obtain 
the information needed to support the 2014 report, OSD's tasking 
memorandum directs the military services to provide to OSD, among 
other things, information on core requirements and planned workload at 
various lower-level subcategories. The memorandum also directs the 
military services to provide, in any instance where core requirements 
exceed planned workload, additional information on a plan to address 
workload shortfalls. Each of the military services provided 
information in response to OSD's memorandum. 

For the Army and the Air Force, the information on core capability 
requirements in DOD's report is complete. However, DOD's report lacks 
complete information on core capability requirements for the Navy and 
the Marine Corps, due to data errors such as under stated or 
misidentified information. Specifically, the Navy's core capability 
requirements were under stated for each of the following three top-
level categories: Aircraft, Communications/Electronic Equipment, and 
Fabrication/Manufacturing. Also, DOD reported a core capability 
requirement of zero direct labor hours for the Navy's requirements for 
the Ordnance, Weapons, and Missile top-level category, which does not 
accurately reflect the Navy's core capability requirements for that 
category. Navy officials acknowledged that data were incorrectly 
reported in their submissions to OSD. They explained that this 
occurred because of staff turnover in the office responsible for 
compiling the submission and the staff inadvertently not obtaining 
data from subordinate Navy organizations that perform some depot 
maintenance. OSD officials stated that they were unaware of the Navy's 
inaccurate data. During our review, Navy officials provided updated 
data to us that were current as of July 10, 2014. 

In addition, all of the data in the Sea Ships top-level category for 
the Marine Corps are misidentified in the report as core capability 
requirements and should not have been included. OSD officials 
explained that workload identified for the Sea Ships category was 
misidentified as a core capability requirement for the Marine Corps, 
and the data were inadvertently included in the final core report. 
During our review, OSD and Marine Corps officials confirmed there 
should not be a Sea Ships core capability requirement included in 
DOD's report. Table 4 shows a summary of these core capability 
requirements, by military service, using the data DOD reported to 
Congress on June 6, 2014, and updated information provided to us as of 
July 10, 2014. 

Table 4: Core Capability Requirements by Military Service as Reported 
in the Department of Defense's (DOD) 2014 Biennial Core Report dated 
June 6, 2014 and Revised by DOD as of July 10, 2014: 

Military service: Army; 
Reported core capability requirements on June 6, 2014: (Direct labor 
hours) [A]: 13,329,754; 
Revised core capability requirements as of July 10, 2014: (Direct 
labor hours): 13,329,754. 

Military service: Navy; 
Reported core capability requirements on June 6, 2014: (Direct labor 
hours) [A]: 26,398,119[B]; 
Revised core capability requirements as of July 10, 2014: (Direct 
labor hours): 28,091,340. 

Military service: Marine Corps; 
Reported core capability requirements on June 6, 2014: (Direct labor 
hours) [A]: 2,586,685[B]; 
Revised core capability requirements as of July 10, 2014: (Direct 
labor hours): 2,561,495. 

Military service: Air Force; 
Reported core capability requirements on June 6, 2014: (Direct labor 
hours) [A]: 18,376,886; 
Revised core capability requirements as of July 10, 2014: (Direct 
labor hours): 18,376,886. 

Military service: Total DOD; 
Reported core capability requirements on June 6, 2014: (Direct labor 
hours) [A]: 60,691,444[B]; 
Revised core capability requirements as of July 10, 2014: (Direct 
labor hours): 62,359,475. 

Source: GAO analysis of DOD data. GAO-14-777. 

[A] Core capability requirements refers to the required workload to 
sustain core maintenance capability. 

[B] These values contained data errors and were revised. 

[End of table] 

The Report Provides Information on the Planned Workload Available to 
Support All of the Military Services' Core Capability but Includes 
Data Errors for Some Services: 

In response to the OSD tasking memorandum--which provides guidance on 
how to meet the required reporting elements of Section 2464--each 
military service provided data on its planned workload--the amount of 
available work used to maintain the required capability--by the top-
level categories and also by various subcategory levels in the work 
breakdown structure. In DOD's 2014 report, OSD included information on 
the amount of planned workload that is available to maintain the 
required capability, organized by the top-level categories, expressed 
in direct labor hours, and the estimated cost of these workload, for 
each of the military services. As reported, DOD has a total planned 
workload of about 87 million direct labor hours at an estimated cost 
of about $13 billion. 

For the Air Force, the planned workload information in DOD's report is 
complete, but we identified data errors in the information OSD 
reported for the Army, Navy, and Marine Corps. For the Army, OSD over 
stated the estimated cost of planned workload in the Aircraft top-
level category. Similarly, OSD over stated the planned workload 
(direct labor hours) for the Navy in the Support Equipment top-level 
category. As previously discussed, OSD misidentified the Sea Ships top-
level category for the Marine Corps as a core capability requirement. 
As a result of these data errors, the planned workload direct labor 
hours and estimated cost of planned workload included in the report 
were incorrect. OSD officials acknowledged that there are data errors 
in the report and explained that the errors resulted from transposing 
numbers and inadvertently misidentifying information when preparing 
the final report. 

In addition, as previously discussed, OSD's reported data for the 
Navy's total planned workload are incorrect for the following four top-
level categories: Aircraft; Communications/Electronic Equipment; 
Ordnance, Weapons, and Missiles; and Fabrication/Manufacturing. Navy 
officials acknowledged that data were inaccurately reported in what 
they provided to OSD and explained that this occurred because of staff 
turnover in the office responsible for compiling the submission and 
the staff inadvertently not obtaining data from subordinate Navy 
organizations that perform some depot maintenance. OSD officials 
stated that they were unaware of the inaccurate data. During our 
review, Navy officials provided us with updated data that were current 
as of July 10, 2014. Table 5 shows a summary of these planned workload 
data DOD reported to Congress on June 6, 2014, and updated information 
provided to us as of July 10, 2014. 

Table 5: Planned Workload by Military Service as Reported in the 
Department of Defense's (DOD) 2014 Biennial Core Report dated June 6, 
2014 and Revised by DOD as of July 10, 2014: 

Military service: Army; 
Reported planned workload on June 6, 2014: (direct labor hours)[A]: 
18,440,092; 
Revised planned workload as of July 10, 2014: (direct labor hours)[A]: 
18,440,092; 
Reported estimated cost of planned workload on June 6, 2014: 
(dollars)[A]: $3,868,771,405[B]; 
Revised estimated cost of planned workload as of July 10, 2014: 
(dollars)[A]: $3,868,762,405. 

Military service: Navy; 
Reported planned workload on June 6, 2014: (direct labor hours)[A]: 
41,171,389[B]; 
Revised planned workload as of July 10, 2014: (direct labor hours)[A]: 
43,447,406; 
Reported estimated cost of planned workload on June 6, 2014: 
(dollars)[A]: $3,920,159,204[B]; 
Revised estimated cost of planned workload as of July 10, 2014: 
(dollars)[A]: $4,187,096,956. 

Military service: Marine Corps; 
Reported planned workload on June 6, 2014: (direct labor hours)[A]: 
2,982,936[B]; 
Revised planned workload as of July 10, 2014: (direct labor hours)[A]: 
2,957,746; 
Reported estimated cost of planned workload on June 6, 2014: 
(dollars)[A]: $379,861,936[B]; 
Revised estimated cost of planned workload as of July 10, 2014: 
(dollars)[A]: $374,013,539. 

Military service: Air Force; 
Reported planned workload on June 6, 2014: (direct labor hours)[A]: 
23,942,861; 
Revised planned workload as of July 10, 2014: (direct labor hours)[A]: 
23,942,861; 
Reported estimated cost of planned workload on June 6, 2014: 
(dollars)[A]: $5,165,657,235; 
Revised estimated cost of planned workload as of July 10, 2014: 
(dollars)[A]: $5,165,657,235. 

Military service: Total DOD; 
Reported planned workload on June 6, 2014: (direct labor hours)[A]: 
86,537,278[B]; 
Revised planned workload as of July 10, 2014: (direct labor hours)[A]: 
88,788,105; 
Reported estimated cost of planned workload on June 6, 2014: 
(dollars)[A]: $13,334,449,780[B]; 
Revised estimated cost of planned workload as of July 10, 2014: 
(dollars)[A]: $13,595,530,135. 

Source: GAO analysis of DOD data. GAO-14-777. 

[A] Planned workload refers to the workload required to sustain only 
the core capability requirements. 

[B] These values contained data errors and were revised. 

[End of table] 

For more detail about each military service's revised core maintenance 
capability, organized by top-level category, see appendix III. 

The Report Includes Information on Shortfalls and Mitigation Plans but 
Does Not Include Detailed or Complete Explanations in Some Cases: 

The report partially complies with the third reporting element because 
it includes information on shortfalls at the top-level categories and 
includes plans to mitigate all of the shortfalls identified in the 
report. DOD's report shows that it will be able to exceed its core 
capability requirements with its overall planned workload. The 
reported data show shortfalls for the Marine Corps and the Air Force. 
However, the report does not include a detailed explanation or 
rationale for the Marine Corps' reported shortfall--the reason why the 
Marine Corps does not have the workload to meet core maintenance 
requirements--as required by Section 2464. Additionally, the Air 
Force's reported mitigation plan is not complete, because the plan 
does not fully explain how the Air Force's intended actions will 
correct the effects of the identified shortfall. 

DOD Reported Workload Shortfalls at Top-Level Categories of the Work 
Breakdown Structure: 

Consistent with how it reported the core requirements and planned 
workload, OSD aggregated the workload shortfalls under the top-level 
categories of the work breakdown structure for each military service. 
The report shows that at the top level, the Army and Navy did not 
identify any shortfalls in the workload available to support its core 
capability requirements. The report shows that the Marine Corps and 
the Air Force had shortfalls at the top level. Specifically, the 
report showed workload shortfalls for the Marine Corps of about 
145,000 direct labor hours out of about 3 million direct labors hours. 
The report shows workload shortfalls for the Air Force of about 388, 
000 direct labor hours out of about 24 million direct labor hours. 
Table 6 shows the shortfalls identified in the report. 

Table 6: Shortfalls in Direct Labor Hours by Military Service and Work 
Breakdown Structure as Reported in the Department of Defense's (DOD) 
2014 Biennial Core Report dated June 6, 2014: 

Military service: Marine Corps; 
Work breakdown structure category: Communication/Electronic Equipment; 
Core capability requirement: 219,290; 
Planned workload[A]: 74,755; 
Workload shortfall: (144,535). 

Military service: Air Force; 
Work breakdown structure category: Communication/Electronic Equipment; 
Core capability requirement: 515,637; 
Planned workload[A]: 127,574; 
Workload shortfall: (388,063). 

Military service: Total DOD; 
Core capability requirement: 734,927; 
Planned workload[A]: 202,329; 
Workload shortfall: (532,598). 

Source: GAO analysis of DOD data. GAO-14-777. 

[A] Planned workload refers to the workload required to sustain only 
the core capability requirements. 

[End of table] 

In assessing the completeness of DOD's report, we determined that the 
Navy had no shortfalls in the lower-level subcategories. However, the 
Army, Marine Corps, and Air Force had identified shortfalls at lower-
level subcategories and submitted supplemental information to OSD 
describing these shortfalls. According to OSD officials, they 
aggregated the information on core requirements and planned workload 
provided by the military services at the top-level categories of the 
work breakdown structure. They also stated that some of the workload 
shortfalls identified by the military services at the lower-level 
categories were balanced out by surplus workload in other lower-level 
categories under the same top-level category. Thus, they did not 
include these lower-level shortfalls in the report. 

For the Army, the report shows that there were no workload shortfalls 
at the top-level categories. On the other hand, the Army submitted 
information to OSD on shortfalls in lower-level subcategories totaling 
approximately 536,773 direct labor hours. These shortfalls are 
anticipated in various second and third-level subcategories under top-
level categories for Aircraft, Ground Vehicles, and Support Equipment. 
For example, the Army identified a shortfall of about 65,679 direct 
labor hours under the third-level subcategory of Instruments, which is 
under the Aircraft top-level category. For the Marine Corps, the 
report reflects total workload shortfalls of 144,535 direct labor 
hours in the top-level category of Communication/Electronic Equipment. 
The Marine Corps identified a shortfall of 1,912 direct labor hours in 
the second-level subcategory of Generators, which falls under Support 
Equipment top-level category in information it submitted to OSD. For 
the Air Force, the report reflects total workload shortfalls of 
approximately 388,063 direct labor hours in the top-level category of 
Communication/Electronic Equipment. However, the Air Force also 
provided information to OSD on additional shortfalls of about 60,133 
direct labor hours in the second-level subcategory of Aircraft 
Components under the Aircraft top-level category. The Air Force also 
provided information about a shortfall of about 294,000 direct labor 
hours in the second-level subcategory of Missile Components under the 
Ordnance, Weapons, and Missiles top-level category. 

OSD officials told us--and military service officials agreed--that 
they chose to report at the top level for congressional oversight 
because they believed this best reflected the services' ability to 
provide core maintenance, as surplus planned workload in lower-level 
categories could make up for shortfalls in other categories. They 
noted that in some cases skills, facilities, and equipment are 
transferrable from one system to another within the top-level category 
of a work breakdown structure, and that aggregation of workload to the 
top level presents a more accurate picture of shortfalls. 

The Report Does Not Include a Detailed Explanation for the Marine 
Corps Shortfall: 

The report provides mitigation plans for the identified shortfall in 
the Marine Corps core capabilities but partially complies with the 
third reporting element because it does not clearly provide an 
explanation for the identified shortfall. The report identifies a 
Marine Corps shortfall of 144,535 direct labor hours that are needed 
to support its required core capability for maintaining equipment 
under its Communication/Electronic Equipment category of work. OSD and 
Marine Corps officials believe the report complies with the 
requirement to provide a detailed rationale for identified shortfalls. 
However, the report says only that the shortfall is caused by the 
addition of Electro-Optics/Night Vision equipment into this category; 
it does not indicate the underlying reason why the Marine Corps does 
not currently have a planned workload to meet the core capability 
requirement in this area. The report provides no explanation for why 
the Marine Corps must currently rely on commercial sources of repair 
for the new equipment. When we asked Marine Corps officials to clarify 
the reason for the shortfall, they further explained to us that the 
Electro-Optics/Night Vision equipment was purchased without 
consideration for an eventual need for government repair capability. 
They stated that since the technology in this kind of equipment 
advances quickly, it did not make financial sense to acquire the 
technical data[Footnote 15] at the time of the initial purchase. This 
additional information that Marine Corps officials shared with us was 
not in the report. However, the report states that the Marine Corps is 
now working toward developing a government repair capability for the 
new equipment. In February 2013, we recommended that DOD improve its 
Biennial Core Report by including detailed explanations of why the 
military services do not have the workload to meet core maintenance 
requirements for each identified shortfall.[Footnote 16] DOD agreed 
with our recommendation and stated that it would include an 
explanation and mitigation plan for each workload shortfall identified 
in all future reports. However, based on our current review of DOD's 
2014 Biennial Core Report, as of August 2014, DOD has not implemented 
this recommendation. Fully implementing our recommendation will 
provide complete information about the core maintenance requirements 
and clear explanations for why the military services do not have the 
workload to meet these requirements, thereby providing Congress with 
visibility about whether the services' plans to correct or mitigate 
the shortfalls will address the cause of the shortfalls. 

The Report Does Not Include a Complete Mitigation Plan for the Air 
Force's Shortfall: 

The report complies with the third reporting element for the Air 
Force, because it provides an explanation for the identified shortfall 
in Air Force core capabilities and includes an associated mitigation 
plan. However, the mitigation plan is not complete, because it does 
not provide detailed information about how the Air Force's intended 
actions will address the effects of the shortfall. The report 
identifies an Air Force shortfall of 388,063 direct labor hours that 
are needed to support its required core maintenance capability to 
maintain equipment under its Communication/Electronic Equipment 
category of work. The report identifies the shortfall as primarily in 
unmanned aircraft systems' ground stations and space systems and 
states that this shortfall is driven by the workload in this area. 
Additionally, the report explains that repair data and budget 
uncertainties present challenges to the Air Force's ability to 
establish core depot capability in the military depots. Also, the 
report states that partnerships with the private sector will help 
resolve these shortfalls. However, the report does not make clear how 
these partnerships will resolve the core depot maintenance shortfalls. 
Further, there are no details in the report on how the Air Force plans 
to obtain the necessary repair data. When we asked Air Force officials 
to clarify their shortfall mitigation plan, they further explained 
that they plan to partner with private-sector contractors to gain 
access to the repair data so they can meet their core requirement 
while allowing the private sector to maintain its intellectual 
property. 

DOD Instruction 4151.20 assigns responsibility to the Assistant 
Secretary of Defense for Logistics and Materiel Readiness to collect, 
review, and evaluate the military services' submissions when computing 
DOD's composite core capability requirements and planned workload. OSD 
has some review processes in place as it prepares the report. For 
example, OSD officials explained that their processes included 
reviewing each military service's information submission for factors 
such as whether it was consistent with DOD policy and whether it 
explained workload shortfalls. Further, OSD officials told us that 
their office responded to questions posed by the military services as 
they were assembling the information. OSD officials stated that before 
DOD's final report was issued, the military services had the 
opportunity to review and make any corrections to the report. 

Although DOD has some review processes in place, we found the report 
that DOD submitted to Congress lacks data and has data errors, and 
information on the military services' depot maintenance core 
capabilities is incomplete. While OSD officials acknowledged there 
were data errors in the 2014 Biennial Core report, they stated that 
the data errors made in the report are not materially significant for 
oversight concern. OSD officials also acknowledged that the review 
process could be strengthened. We found that DOD reported $261 million 
less in the estimated cost of planned workload that is needed to 
sustain core workload compared to corrected data that DOD subsequently 
provided to us. Also, in some cases, information about top-level 
categories was not included or misidentified in the report. 
Furthermore, the report does not include complete mitigation plans, 
because the Air Force did not provide more details about its plan 
which may raise questions about whether its actions would actually 
rectify the core capability shortfall. According to Standards for 
Internal Control in the Federal Government,[Footnote 17] internal 
control activities help ensure that management's directives are 
carried out. Control activities are the mechanisms that enforce 
management's directives, such as accurate recording of transactions 
and events. Internal control activities help ensure that all data 
entered are checked and transactions are completely and accurately 
recorded. By assessing the processes DOD uses to review the military 
services' information and prepare the Biennial Core Report, DOD would 
be better positioned to ensure that depot maintenance core 
capabilities data in the final report are completely and accurately 
recorded and the report includes complete information. 

Conclusions: 

Section 2464, among other things, requires DOD to maintain a core 
maintenance capability that is government-owned and government-
operated, assign sufficient workload to support this capability, and 
report information on this capability to Congress. DOD's second 
biennial report to Congress complies with most of the required 
reporting elements but includes incomplete information due, primarily, 
to data errors for some of the military services. Improving the 
processes used to review the services' data submissions would help 
ensure data are checked and completely and accurately recorded. Also, 
DOD's second report did not provide detailed or complete explanations 
for all of the identified workload shortfalls or mitigation plans. As 
we previously recommended, clear reasons for why the military services 
do not have the workload to meet core maintenance requirements and 
their explanations for how they plan to mitigate the shortfalls would 
provide key information for Congress about how the military services' 
actions will correct the shortfalls: 

Recommendation for Executive Action: 

To help ensure that DOD's future submissions of the Biennial Core 
Report will be more accurate and complete, we recommend that the 
Secretary of Defense direct the Assistant Secretary of Defense for 
Logistics and Materiel Readiness to assess the review processes and 
implement needed improvements. 

Agency Comments: 

We provided a draft of this report to DOD for comment. In its written 
comments, reproduced in appendix IV, DOD concurred with our 
recommendation and stated that the department will assess the review 
process and implement any required improvements. 

We are sending copies of this report to the appropriate congressional 
committees; the Secretary of Defense; the Assistant Secretary of 
Defense for Logistics and Materiel Readiness; the Secretaries of the 
Army, Navy, and Air Force and the Commandant of the Marine Corps; and 
other interested parties. In addition, the report is available at no 
charge on the GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-5257 or merrittz@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix V. 

Signed by: 

Zina D. Merritt: 
Director: 
Defense Capabilities and Management: 

List of Committees: 

The Honorable Carl Levin: 
Chairman: 
The Honorable James Inhofe: 
Ranking Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Richard J. Durbin: 
Chairman: 
The Honorable Thad Cochran: 
Ranking Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
United States Senate: 

The Honorable Howard P. "Buck" McKeon: 
Chairman: 
The Honorable Adam Smith: 
Ranking Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Rodney Frelinghuysen: 
Chairman: 
The Honorable Pete Visclosky: 
Ranking Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives: 

[End of section] 

Appendix I: Scope and Methodology: 

To assess the extent to which the Department of Defense's (DOD) 2014 
Biennial Core Report complies with Section 2464 of Title 10 of the 
United States Code, we analyzed the text of DOD's Biennial Core Report 
and obtained supporting information on DOD's core determination 
process to determine the core maintenance capability for fiscal year 
2015. Two analysts independently reviewed DOD's report to determine 
the extent to which it included each element required by the statute. 
All initial disagreements between analysts were discussed and resolved 
through consensus. When the report explicitly included all parts of 
the required element, we determined that DOD "complied" with the 
element. When the report did not explicitly include any part of the 
element, we determined that DOD "did not comply" with the element. If 
the report included some aspects of an element, but not all, then we 
determined that DOD "partially complied" with the element. We 
confirmed that the military services were each providing the same type 
of information. In those cases where we had determined that the report 
did not include some aspects of a required element, we discussed our 
preliminary analyses with the Office of the Secretary of Defense (OSD) 
and military service officials to seek additional information. 

To assess the level of completeness of the information, we obtained 
and analyzed fiscal year 2015 data--including, core capability 
requirements and sustaining workload, expressed in direct labor hours 
and cost--and other information, such as workload shortfall 
explanations, that OSD required the military service headquarters to 
provide in support of the report. We compared the military services' 
submissions to the reporting template in DOD Instruction 4151.20, 
[Footnote 18] in order to determine the extent to which the services 
had submitted the information required by DOD's instruction and 
identify any inconsistencies or errors. We performed a number of steps 
to compare and reconcile the data provided by the military services to 
the data that OSD included in the final Biennial Core report. These 
steps included (1) ensuring that each military service consistently 
reported the direct labor hours identified as the total adjusted 
requirements and the workload needed to maintain depot maintenance 
core capability requirements; (2) reconciling, for accuracy, the 
information in the report against each service's submission; (3) 
comparing and contrasting the 2014 report against DOD's 2012 Biennial 
Core report to determine if there were noticeable changes in the data 
for specific categories; and (4) evaluating each service's submission 
to verify that each work breakdown structure category and associated 
subcategory levels were computed correctly and contained data for 
those requirements and the corresponding workload the services have. 
In addition, we conducted data-reliability assessments for the data 
that were provided by the military services to OSD to support their 
respective responses for the Biennial Core Report. We found data 
errors in the initial submissions from the Army, Navy, and Marine 
Corps. We interviewed OSD and military service officials about these 
data errors and were provided updated data submissions, in which we 
did not find any data errors. From these analyses, and given the 
updated military service data submissions, we concluded that the data 
were sufficiently reliable for the purposes of this report. The team 
also met with OSD and military service officials responsible for 
overseeing the data collection and preparing the data submissions, to 
obtain clarification and understanding of the content of the 
submissions. We assessed the accuracy and completeness of the 
information in DOD's 2014 Biennial Core Report with criteria outlined 
in Standards for Internal Control in the Federal Government and DOD 
Instruction 4151.20.[Footnote 19] 

We conducted this performance audit from June 2014 to September 2014 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Category Levels from DOD's Depot Maintenance Core 
Capability Worksheet: 

Work Breakdown Structure Category: 

1. Aircraft.
1.1 Airframes.
1.1.1 Rotary.
1.1.2 Vertical/Short Take-Off and Landing.
1.1.3 Cargo/Tanker.
1.1.4 Fighter/Attack.
1.1.5 Bomber.
1.1.6 Aircraft - Other.
1.2 Aircraft Components.
1.2.1 Dynamic Components.
1.2.2 Hydraulic/Pneumatic.
1.2.3 Instruments.
1.2.4 Landing Gear.
1.2.5 Aviation Ordnance.
1.2.6 Avionics/Electronics.
1.2.7 Auxiliary Power Units.
1.2.8 Other.
1.3 Aircraft Engines. 

2. Ground Vehicles.
2.1 Combat Vehicles.
2.2 Amphibious Vehicles.
2.3 Tactical (wheeled) Vehicles.
2.4 Construction Equipment. 

3. Sea Ships.
3.1 Aircraft Carriers.
3.2 Submarines.
3.3 Surface Combatants/Others. 

4. Communication/Electronic Equipment.
4.1 Radar.
4.2 Radio.
4.3 Wire.
4.4 Electronic Warfare.
4.5 Navigational Aids.
4.6 Electro-Optics/Night Vision.
4.7 Crypto.
4.8 Computers.
4.9 Other. 

5. Support Equipment.
5.1 Ground Support Equipment.
5.2 Generators.
5.3 Test, Measurement, and Diagnostic Equipment.
5.4 Calibration.
5.5 Other. 

6. Ordnance, Weapons, & Missiles.
6.1 Nuclear Weapons.
6.2 Chemical Weapons.
6.3 Biological Weapons.
6.4 Conventional Weapons.
6.5 Explosives.
6.6 Small Arms/Personal Weapons.
6.7 Strategic Missiles.
6.8 Tactical Missiles. 

7. Software.
7.1 Weapon System.
7.2 Support Equipment. 

8. Fabrication/Manufacturing. 

9. Fleet/Field Support. 

10. Special Interest Items. 

11. Other. 

Source: Department of Defense. GAO-14-777. 

[End of table] 

[End of section] 

Appendix III: Revised Core Maintenance Capability by Military Service: 

Section 2464 of Title 10 of the United States Code requires the 
Department of Defense (DOD) to, among other things, submit to Congress 
a biennial report on its "core depot-level maintenance and repair 
capability," no later than April 1 of each even-numbered year. The 
statute requires DOD to identify the following three items for each 
military service for the subsequent fiscal year: (1) core capability 
requirements, (2) planned workload--this refers to the workload 
required to sustain only the core capability requirements--and (3) 
explanations and mitigation plans for any shortfalls between core 
capability requirements and planned workload. The statute directs that 
the core capability requirements information and planned workload 
information be organized by work breakdown structure--which is a group 
of categories of equipment and technologies--and expressed in direct 
labor hours. 

DOD submitted its 2014 Biennial Core Report to Congress on June 6, 
2014, and we found that the report contains multiple data errors. 
Figures 1 and 2 show excerpts from DOD's report of the core capability 
requirements and workload information and a side-by-side comparison of 
the data DOD included in the report and the revised data DOD provided 
to us as of July 10, 2014. 

Figure 1: Army and Navy Data as Reported in the Department of 
Defense's (DOD) 2014 Biennial Core Report dated June 6, 2014 and 
Revised by DOD as of July 10, 2014: 

[Refer to PDF for image: illustrated table] 

Army: 

Aircraft: 
Core capability requirement: 3,338,606; 
Public-sector depot maintenance sustaining workload[A]: 4,912,616; 
Estimated cost of sustaining workload[B]: 
Data reported by DOD on June 6, 2014: $788,829,050; 
Updated data provided by DOD as of July 10, 2014: $788,820,050. 

Ground vehicles: 
Core capability requirement: 4,374,751; 
Public-sector depot maintenance sustaining workload[A]: 6,242,239; 
Estimated cost of sustaining workload[B]: $1,559,796,744. 

Sea ships: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Communication/electronic equipment: 
Core capability requirement: 2,659,769; 
Public-sector depot maintenance sustaining workload[A]: 3,306,333; 
Estimated cost of sustaining workload[B]: $1,180,275,981. 

Support equipment: 
Core capability requirement: 909,676; 
Public-sector depot maintenance sustaining workload[A]: 1,159,020; 
Estimated cost of sustaining workload[B]: $113,254,047. 

Ordnance, weapons, and missiles: 
Core capability requirement: 1,255,925; 
Public-sector depot maintenance sustaining workload[A]: 1,314,243; 
Estimated cost of sustaining workload[B]: $136,683,386. 

Software: 
Core capability requirement: 384,102; 
Public-sector depot maintenance sustaining workload[A]: 397,642; 
Estimated cost of sustaining workload[B]: $74,899,890. 

Fabrication/manufacturing: 
Core capability requirement: 32,831; 
Public-sector depot maintenance sustaining workload[A]: 36,909; 
Estimated cost of sustaining workload[B]: $350,634. 

Fleet/field support: 
Core capability requirement: 317,464; 
Public-sector depot maintenance sustaining workload[A]: 320,809; 
Estimated cost of sustaining workload[B]: $13,420,497. 

Special Interest Items: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Other: 
Core capability requirement: 56,630; 
Public-sector depot maintenance sustaining workload[A]: 750,281; 
Estimated cost of sustaining workload[B]: $1,261,176. 

Navy: 

Aircraft: 
Core capability requirement: 
Data reported by DOD on June 6, 2014: 2,676,988; 
Updated data provided by DOD as of July 10, 2014: 2,679,100; 
Public-sector depot maintenance sustaining workload[A]: 
Data reported by DOD on June 6, 2014: 4,090,600; 
Updated data provided by DOD as of July 10, 2014: 4,092,712; 
Estimated cost of sustaining workload[B]: 
Data reported by DOD on June 6, 2014: $811,779,570; 
Updated data provided by DOD as of July 10, 2014: $811,781,928. 

Ground vehicles: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Sea ships: 
Core capability requirement: 21,431,566; 
Public-sector depot maintenance sustaining workload[A]: 32,253,888; 
Estimated cost of sustaining workload[B]: $2,168,560,114. 

Communication/electronic equipment: 
Core capability requirement: 
Data reported by DOD on June 6, 2014: 93,236; 
Updated data provided by DOD as of July 10, 2014: 688,657; 
Public-sector depot maintenance sustaining workload[A]: 
Data reported by DOD on June 6, 2014: 133,136; 
Updated data provided by DOD as of July 10, 2014: 917,165; 
Estimated cost of sustaining workload[B]: 
Data reported by DOD on June 6, 2014: $8,738,755; 
Updated data provided by DOD as of July 10, 2014: $96,221,489. 

Support equipment: 
Core capability requirement: 81,316; 
Public-sector depot maintenance sustaining workload[A]: 
Data reported by DOD on June 6, 2014: 128,815; 
Updated data provided by DOD as of July 10, 2014: 126,815; 
Estimated cost of sustaining workload[B]: $25,166,437. 

Ordnance, weapons, and missiles: 
Core capability requirement: 
Data reported by DOD on June 6, 2014: 0; 
Updated data provided by DOD as of July 10, 2014: 937,288; 
Public-sector depot maintenance sustaining workload[A]: 
Data reported by DOD on June 6, 2014: 0; 
Updated data provided by DOD as of July 10, 2014: 1,289,326; 
Estimated cost of sustaining workload[B]: 
Data reported by DOD on June 6, 2014: $0; 
Updated data provided by DOD as of July 10, 2014: $152,552,661. 

Software: 
Core capability requirement: 12,901; 
Public-sector depot maintenance sustaining workload[A]: 33,082; 
Estimated cost of sustaining workload[B]: $6,565,123. 

Fabrication/manufacturing: 
Core capability requirement: 
Data reported by DOD on June 6, 2014: 262,453; 
Updated data provided by DOD as of July 10, 2014: 420,853; 
Public-sector depot maintenance sustaining workload[A]: 
Data reported by DOD on June 6, 2014: 277,862; 
Updated data provided by DOD as of July 10, 2014: 480,412; 
Estimated cost of sustaining workload[B]: 
Data reported by DOD on June 6, 2014: $55,141,714; 
Updated data provided by DOD as of July 10, 2014: $82,041,714. 

Fleet/field support: 
Core capability requirement: 372,571; 
Public-sector depot maintenance sustaining workload[A]: 500,062; 
Estimated cost of sustaining workload[B]: $99,237,304. 

Special Interest Items: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Other: 
Core capability requirement: 1,467,088; 
Public-sector depot maintenance sustaining workload[A]: 3,753,944; 
Estimated cost of sustaining workload[B]: $744,970,187. 

Source: GAO analysis of DOD data. GAO-14-777. 

[A] We summarize DOD's description of this information as planned 
workload. 

[B] We summarize DOD's description of this information as estimated 
cost of planned workload. 

[End of figure] 

Figure 2: Marine Corps and Air Force Data as Reported in the 
Department of Defense's (DOD) 2014 Biennial Core Report dated June 6, 
2014 and Revised by DOD as of July 10, 2014: 

[Refer to PDF for image: illustrated table] 

Marine Corps: 

Aircraft: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Ground vehicles: 
Core capability requirement: 1,896,000; 
Public-sector depot maintenance sustaining workload[A]: 2,233,140; 
Estimated cost of sustaining workload[B]: $258,857,749. 

Sea ships: 
Core capability requirement: 
Data reported by DOD on June 6, 2014: 25,190; 
Updated data provided by DOD as of July 10, 2014: 0; 
Public-sector depot maintenance sustaining workload[A]: 
Data reported by DOD on June 6, 2014: 25,190; 
Updated data provided by DOD as of July 10, 2014: 0; 
Estimated cost of sustaining workload[B]: 
Data reported by DOD on June 6, 2014: $5,848,397; 
Updated data provided by DOD as of July 10, 2014: $0. 

Communication/electronic equipment: 
Core capability requirement: 219,290; 
Public-sector depot maintenance sustaining workload[A]: 74,755; 
Estimated cost of sustaining workload[B]: $56,724,819. 

Support equipment: 
Core capability requirement: 211,987; 
Public-sector depot maintenance sustaining workload[A]: 353,454; 
Estimated cost of sustaining workload[B]: $27,123,872. 

Ordnance, weapons, and missiles: 
Core capability requirement: 234,218; 
Public-sector depot maintenance sustaining workload[A]: 296,397; 
Estimated cost of sustaining workload[B]: $31,307,099. 

Software: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Fabrication/manufacturing: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Fleet/field support: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Special Interest Items: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Other: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Air Force: 

Aircraft: 
Core capability requirement: 12,962,465; 
Public-sector depot maintenance sustaining workload[A]: 18,001,918; 
Estimated cost of sustaining workload[B]: $4,372,369,893. 

Ground vehicles: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Sea ships: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Communication/electronic equipment: 
Core capability requirement: 515,637; 
Public-sector depot maintenance sustaining workload[A]: 127,574; 
Estimated cost of sustaining workload[B]: $98,074,305. 

Support equipment: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Ordnance, weapons, and missiles: 
Core capability requirement: 988,545; 
Public-sector depot maintenance sustaining workload[A]: 1,061,912; 
Estimated cost of sustaining workload[B]: $159,726,054. 

Software: 
Core capability requirement: 3,446,710; 
Public-sector depot maintenance sustaining workload[A]: 4,190,066; 
Estimated cost of sustaining workload[B]: $450,587,669. 

Fabrication/manufacturing: 
Core capability requirement: 271,523; 
Public-sector depot maintenance sustaining workload[A]: 348,825; 
Estimated cost of sustaining workload[B]: $50,372,257. 

Fleet/field support: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Special Interest Items: 
Core capability requirement: 0; 
Public-sector depot maintenance sustaining workload[A]: 0; 
Estimated cost of sustaining workload[B]: $0. 

Other: 
Core capability requirement: 192,006; 
Public-sector depot maintenance sustaining workload[A]: 212,566; 
Estimated cost of sustaining workload[B]: $34,527,057. 

Source: GAO analysis of DOD data. GAO-14-777. 

[A] We summarize DOD's description of this information as planned 
workload. 

[B] We summarize DOD's description of this information as estimated 
cost of planned workload. 

[End of figure] 

[End of section] 

Appendix IV: Comments from the Department of Defense: 

Assistant Secretary of Defense:	
Logistics and Materiel Readiness:
3500 Defense Pentagon: 
Washington, DC 20301-3500: 

September 3, 2014: 

Ms. Zina Merritt: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Ms. Merritt: 

This is the Department of Defense (DoD) response to the GAO Draft 
Report GAO-14777, "Depot Maintenance: Accurate and Complete Data 
Needed to Meet DOD's Core Capability Reporting Requirements," dated 
August 5, 2014 (GAO Code 351935). 

The Department acknowledges receipt of the draft report and concurs 
with the recommendation. The Department will assess the review process 
and implement any required improvements. 

Sincerely, 

Signed by: 
Paul D. Peters: 
Principal Deputy: 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Zina Merritt, (202) 512-5257 or merrittz@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Carleen Bennett, Assistant 
Director; Tracy Barnes; Lindsey Cross; Chaneé Gaskin; Shvetal Khanna; 
Joanne Landesman; Michael Silver; Amie Steele; and Michael Willems 
made key contributions to this report. 

[End of section] 

Related GAO Products: 

Depot Maintenance: Additional Information Needed to Meet DOD's Core 
Capability Reporting Requirements. [hyperlink, 
http://www.gao.gov/products/GAO-13-194]. Washington, D.C.: February 
11, 2013. 

Defense Logistics: DOD Input Needed on Implementing Depot Maintenance 
Study Recommendations. [hyperlink, 
http://www.gao.gov/products/GAO-11-568R]. Washington, D.C.: June 30, 
2011. 

Depot Maintenance: Actions Needed to Identify and Establish Core 
Capability at Military Depots. [hyperlink, 
http://www.gao.gov/products/GAO-09-83]. Washington, D.C.: May 14, 2009. 

[End of section] 

Footnotes: 

[1] There are two levels of DOD maintenance: field level and depot 
level. Field level maintenance includes organizational and 
intermediate maintenance and requires fewer skills, but it occurs more 
frequently. Depot level maintenance occurs less frequently but 
requires greater skills. Maintenance ranges in complexity from daily 
system inspection, to rapid removal and replacement of components, to 
the complete overhaul or rebuild of a weapon system. 

[2] Depot maintenance is an action performed on materiel or software 
in the conduct of inspection, repair, overhaul, or the modification or 
rebuild of end-items, assemblies, subassemblies, and parts, that, 
among other things, requires extensive industrial facilities, 
specialized tools and equipment, or uniquely experienced and trained 
personnel that are not available in lower-echelon-level maintenance 
activities. Depot maintenance is a function and, as such, is 
independent of any location or funding source and may be performed in 
the public or private sectors. 

[3] Pub. L. No. 98-525 § 307 (1984). This section was originally 
codified at 10 U.S.C. § 2304 (note). 

[4] While the statute does not define workload in this context, DOD 
defines workload as an amount of depot maintenance work related to 
specific weapon systems, equipment, components, or programs and to 
specific services, facilities, and commodities. Department of Defense 
Instruction 4151.20, Depot Maintenance Core Capabilities Determination 
Process (Jan. 5, 2007). 

[5] DOD Instruction 4151.20. 

[6] In this report, we refer to what DOD calls "sustaining workload" 
as "planned workload to support core capabilities." 

[7] Pub. L. No.112-81, § 327 (2011). 

[8] While the statute does not define direct labor hours in this 
context, DOD defines a direct labor hour as one hour of effort 
directly attributed to a category of work. DOD Instruction 4151.20. 

[9] We have used this summary of the three elements in our prior work. 
For example, see GAO, Depot Maintenance: Additional Information Needed 
to Meet DOD's Core Capability Reporting Requirements, [hyperlink, 
http://www.gao.gov/products/GAO-13-194] (Washington, D.C.: Feb. 11, 
2013). 

[10] [hyperlink, http://www.gao.gov/products/GAO-13-194]. 

[11] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[12] DODI 4151.20, Depot Maintenance Core Capabilities Determination 
Process (Jan. 5, 2007). 

[13] A contingency is a situation requiring military operations in 
response to natural disasters, terrorists, subversives, or as 
otherwise directed by appropriate authority to protect U.S. interests. 

[14] A resource, in this context, refers to the personnel, materiel, 
and other assets or capabilities available to provide depot 
maintenance. 

[15] Defense Federal Acquisition Regulation Supplement (DFARS) section 
252.227-7103 defines technical data as "recorded information, 
regardless of the form or method of the recording, of a scientific or 
technical nature (including computer software documentation)…[but not 
including] computer software or data incidental to contract 
administration, such as financial and/or management information." 
Technical data for weapon systems includes drawings, specifications, 
standards, and other details necessary to ensure adequacy of item 
performance, as well as manuals that contain instructions for 
installation, operation, maintenance, and other actions needed to 
support weapon systems. 

[16] [hyperlink, http://www.gao.gov/products/GAO-13-194]. 

[17] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[18] DOD Instruction 4151.20, Depot Maintenance Core Capabilities 
Determination Process (Jan. 5, 2007). 

[19] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999) and Department of Defense 
Instruction 4151.20, Deport Maintenance Core Capabilities 
Determination Process (Jan. 5, 2007). 

[End of section] 

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