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GAO-11-568R: 

United States Government Accountability Office: 
Washington, DC 20548: 

June 30, 2011: 

The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate: 

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

Subject: Defense Logistics: DOD Input Needed on Implementing Depot 
Maintenance Study Recommendations: 

This report responds to section 322 of the Duncan Hunter National 
Defense Authorization Act for Fiscal Year 2009.[Footnote 1] Section 
322 required the Secretary of Defense to contract for a study on the 
capability and efficiency of the depots of the Department of Defense 
(DOD) to provide the logistics capabilities and capacity necessary for 
national defense. DOD placed a task order under an existing contract 
with LMI, Inc. (LMI) to complete the study, which was to address a 
range of issues specified in section 322. As required by section 322, 
the task order specified that the contractor submit an interim report 
on its study to the Senate and House Committees on Armed Services not 
later than 1 year after the commencement of the study and a final 
report not later than 22 months after the date on which the Secretary 
of Defense enters into the contract. LMI submitted its interim report, 
containing background information and summary data on the DOD depot 
maintenance enterprise, to the Committees on Armed Services in 
December 2009. The final report, containing conclusions and 
recommendations, was provided to the Committees on Armed Services in 
February 2011. 

Section 322 also directed GAO to provide an assessment of the 
feasibility of the recommendations and whether the findings were 
supported by the data and information examined and to submit a report 
to the Committees on Armed Services of the Senate and House of 
Representatives within 90 days of the date on which the contractor 
submitted its final report. In response, our objectives were to 
determine the extent to which (1) LMI's reports addressed the five 
issues and 33 subissues specified in the law, (2) the findings in 
LMI's final report were supported by the data and information 
examined, and (3) the recommendations in LMI's final report were 
feasible. 

Scope and Methodology: 

To conduct this work, we reviewed LMI's interim and final reports and 
assessed whether the LMI study addressed the issues and subissues 
specified in section 322. We reviewed documentation that the LMI study 
team collected and interviewed members of the study team to determine 
their processes for completing the study. From prior GAO work, we 
identified generally accepted research standards that define a sound 
and complete study, determined which of these standards were relevant 
to LMI's study, and compared characteristics of LMI's study to those 
standards. We also interviewed officials from the Office of the 
Secretary of Defense, the military departments, a nongeneralizable 
sample of 8 of the 17 service depots and their respective commands, 
and a defense industry group to obtain their perspectives on the 
recommendations in LMI's final report. Further details on our scope 
and methodology are provided in enclosure I, starting at page 10. 

We conducted this performance audit from January 2011 to June 2011 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. 

On May 16, 2011, we briefed the Committees on Armed Services of the 
Senate and House of Representatives on our findings. This is our final 
report and incorporates comments from DOD and LMI. Our evaluation of 
the LMI study is discussed in detail in the attached briefing slides 
(see enclosure I). 

Summary and Recommendation for Executive Action: 

LMI's reports addressed 26 of the 33 subissues specified in section 
322, and partially addressed the other 7 subissues. For example, on 
the issue of the adequacy of reports submitted to Congress on each 
military department's maintenance workload, the reports addressed all 
4 subissues, including how accurately depot budget lines reflect depot-
level workloads, the accuracy and usefulness of current depot 
maintenance reporting requirements, and whether current budgetary 
guidelines provide sufficient flexibility during the year of execution 
to make best-value decisions. For each of the other issues, the LMI 
reports addressed some subissues and partially addressed one or more 
subissues. For example, the LMI report addressed 5 of the 8 subissues 
on current and future maintenance environments, but partially 
addressed the other 3: performance-based logistics, supply chain 
management, and private-sector depot-level capability and capacity. 

LMI's study was generally consistent with research standards that 
define a sound and complete study with regard to design, execution, 
and presentation. For example, the study's scope was consistent with 
the available guidance, the study team verified and validated the 
study data, and assumptions were identified in internal documents and 
the interim and final reports. However, we also found some areas of 
concern. These concerns included limited documentation on the 
maintenance workload and servicemember deployment statistical models 
used as the basis for some findings, the absence of information in the 
reports on the limitations present in some of the data used in the 
study, and unclear report organization. For example, we and officials 
from the military departments noted that subrecommendations were 
difficult to identify. 

Implementation of all five recommendations presented in LMI's report 
is feasible according to subject matter experts in the depot 
maintenance community whom we interviewed. The recommendations are (1) 
revise the statutory framework for depot maintenance, (2) link 
acquisition and sustainment policies, (3) strengthen the core 
determination process, (4) improve depot maintenance reporting, and 
(5) establish an independent commission or series of facilitated 
forums to review the major alternatives for improving organic depot 
maintenance management and execution. Although feasible, the 
interviewees told us that they believe the fifth recommendation is 
unnecessary because issues highlighted in the study could be addressed 
by existing DOD bodies. Section 322 also specified that the final 
report shall include comments provided by the Secretary of Defense and 
secretaries of the military departments on the findings and 
recommendations of the study, but DOD's official response did not 
specifically address any findings or recommendations. DOD officials 
indicated that the department did not provide more specific comments 
because DOD did not provide the study--LMI did. Our review of LMI's 
internal documents determined that DOD and military department 
officials did provide input and feedback on aspects of the study 
throughout its design, execution, and report preparation. Without 
DOD's views about LMI's findings and recommendations, Congress does 
not have all of the information it needs to help establish a way 
forward toward more effective and efficient depot-level maintenance. 

Therefore, we recommend that the Secretary of Defense direct the Under 
Secretary of Defense for Acquisition, Technology, and Logistics to 
report to Congress with DOD's views on LMI's recommendations, any 
statutory and policy changes needed to implement the recommendations, 
actions and timelines for accomplishing ongoing and planned actions to 
implement the recommendations, and estimated costs and benefits of 
implementing the recommendations. 

Agency Comments, Third-Party Views, and Our Evaluation: 

In commenting on a draft of this report, DOD partially concurred with 
our recommendation. DOD stated that it is reviewing the findings and 
recommendations in the LMI study and believes that it is premature to 
provide the results of this effort until its analysis is complete. DOD 
added that a report to Congress on the Department's efforts is neither 
necessary nor required. As noted earlier, section 322 specified that 
LMI's final report was to include comments from DOD on the study's 
findings and recommendations, but DOD did not specifically address the 
findings and recommendations in its official response. Therefore, we 
continue to believe that such comments would provide important context 
to help Congress determine the appropriate course of action when 
considering LMI's recommendations. 

In commenting on a draft of this report, LMI concurred with our 
acknowledgment that the study covered a broad set of depot maintenance 
issues well, using a sound research approach that produced reasonable 
recommendations. LMI also commented on our finding that 7 of the 33 
subissues specified in section 322 were partially addressed by its 
study. LMI noted that these 7 subissues were not covered in the 
study's reports to the same volume as the others, but stated that this 
was because the LMI study team determined that they were not critical 
elements of the study's findings and recommendations. LMI stated that 
these subissues were fully explored as part of the study. However, our 
criterion for evaluating whether LMI addressed all 33 subissues was 
the extent to which each of the subissues was covered in LMI's interim 
and final reports. Therefore, we believe our finding that LMI's 
reports did not fully address these 7 subissues as outlined in section 
322 remains valid. 

DOD's and LMI's written comments are reprinted in enclosures II and 
III, respectively. Both DOD and LMI also provided technical comments 
that we incorporated into this report where applicable. 

We are sending copies of this report to the appropriate congressional 
committees. We are also sending copies to the Secretary of Defense; 
the Under Secretary of Defense for Acquisition, Technology, and 
Logistics; the Secretaries of the Army, the Navy, and the Air Force; 
the Commandant of the Marine Corps; and the Chief Executive Officer of 
LMI, Inc. This report also is available at no charge on the GAO Web 
site at [hyperlink, http://www.gao.gov]. 

Should you or your staff have any questions concerning this report, 
please contact me at (202) 512-8246 or edwardsj@gao.gov. Contact 
points for our Offices of Congressional Relations and Public Affairs 
may be found on the last page of this report. Key contributors to this 
report are provided in enclosure IV. 

Signed by: 

Jack E. Edwards:
Director, Defense Capabilities and Management: 

Enclosures - 4: 

[End of section] 

Enclosure I: Briefing to Congressional Committees: 

Defense Logistics: DOD Input Needed on Implementing Depot
Maintenance Study Recommendations: 

Briefing for Congressional Committees: 

June, 2011: 

Contents: 
* Introduction; 
* Mandate and Objectives; 
* Scope and Methodology; 
* Summary of Findings; 
* Objective 1: Extent Study Addressed Specified Issues; 
* Objective 2: Study Design, Execution, and Presentation; 
* Objective 3: Feasibility of Recommendations; 
* Conclusions; 
* Recommendation for Executive Action; 
* Agency Comments, Third-Party Views, and Our Evaluation; 
* GAO Contact and Staff Acknowledgments; 
* Related GAO Products. 

Figure 1: Mechanics at Anniston Army Depot Line Up a Turret with its 
Hull: 

[Refer to PDF for image: photograph] 

Source: U.S. Army. 

[End of figure] 

Introduction: 

DOD's depot workload has increased to support overseas operations: 

The Department of Defense's (DOD) depot maintenance enterprise employs 
approximately 77,000 personnel with an annual operating budget of over 
$30 billion. Some of the most in-depth and complex maintenance work is 
carried out at 17 DOD depots that have an estimated facility value of 
over $48 billion. Additional depot-level work is carried out by 
private-sector contractors that may work in public-private 
partnerships with depots or in the contractors' own facilities. 

Obligations for depot-level maintenance (organic[Footnote 2] and 
commercial) have increased in recent years to support overseas 
operations in Iraq and Afghanistan, growing from $22.5 billion in 
fiscal year 2001 to $32.3 billion in fiscal year 2009.[Footnote 3] A 
large portion of this increase has been supported by Overseas 
Contingency Operations funding. 

The House Committee on Armed Services noted that when wartime 
operations in Iraq and Afghanistan cease and supplemental funding for 
depot maintenance is reduced, DOD depots may face challenges similar 
to those in the post—Cold War environment where public- and private-
sector facilities competed for limited available workload.[Footnote 4] 

Fiscal year 2009 National Defense Authorization Act directed DOD to 
contract for a study on depot capability and efficiency: 

Section 322 of the Duncan Hunter National Defense Authorization Act 
for Fiscal Year 2009:[Footnote 5] 

* Required the Secretary of Defense to contract for a study on the 
capability and efficiency of its depots to provide the logistics 
capabilities and capacity necessary for national defense. DOD placed a 
task order for the study using an existing contract with LMI, Inc 
(LMI). 

* Included five issues, with 33 associated subissues, to be addressed 
in the overall study and the final report. 

* Stated that the study's final report should include recommendations 
addressing issues, including: 
- what would be required to maintain, in a post-reset[Footnote 6] 
environment, an efficient and enduring DOD depot capability, including 
appropriate changes to applicable law, and; 
- the methodology of determining core logistics requirements, 
including an assessment of-risk. 

As outlined in the legislation, LMI prepared both an interim and final 
report. 

* The interim report contains background information and summary data 
on the DOD depot maintenance enterprise. It is not an earlier draft of 
the final report. 

LMI submitted its final report, Future Capability of DOD Maintenance 
Depots, to the Committees on Armed Services of the Senate and House of 
Representatives on February 15, 2011. The final report contains 
conclusions and recommendations. 

Mandate and Objectives: 

Section 322 of the 2009 National Defense Authorization Act: 

* Directed us to submit a report to the Committees on Armed Services 
of the Senate and House of Representatives not later than 90 days 
after the date on which the final report was submitted. 

* Mandated that our report contain an assessment of the feasibility of 
the recommendations in the study, and whether the findings were 
supported by the data and information examined. 

We therefore determined the extent to which: 

1. LMI's reports addressed the five issues and 33 subissues specified 
in the law, 

2. the findings in LMI's final report were supported by the data and 
information examined, and, 

3. the recommendations in LMI's final report were feasible. 

Scope and Methodology: 

For all three objectives, we reviewed the legislation and reports on 
depots and maintenance issued by us and others; and discussed our 
preliminary observations with stakeholders that included DOD, the 
military services, and others such as an association representing 
private-sector organizations that perform depot-level maintenance. 

To determine the extent to which the LMI study addressed the 
legislation-specified issues and subissues, we: 

* Reviewed LMI's interim and final reports and assessed the extent to 
which the reports address the five issues and their 33 subissues. 

* To increase the validity of our assessments, had the initial 
assessment of each issue by one analyst independently reviewed by 
another analyst. 

* Had the entire engagement team collectively review and approve this 
decision. 

To determine the extent to which the report's findings were supported 
by the data and information LMI examined, we: 

* Used relevant generally accepted research standards based on prior 
GAO work[Footnote 7] and evaluated the study against these criteria. 

* Had two team members independently review and rate the evidence as 
to what, if any, limitations were present for the methods used to 
conduct and report the study. 

* Discussed each assessment and collectively reached agreement on the 
extent to which LMI's study met the standards. 

To determine the extent to which the recommendations in LMI's final 
report were feasible, we took the following steps: 

* Reviewed the recommendations and subrecommendations outlined in the 
LMI final report. 

* Interviewed subject matter experts who were officials from the 
Office of the Under Secretary of Defense for Acquisition, Technology, 
and Logistics (Maintenance Policy and Programs); Army, Marine Corps, 
Navy, and Air Force headquarters' offices; a nongeneralizable sample 
of 8 of the 17 service depots and their respective commands; and a 
defense industry group in order to obtain their informed opinions of 
the feasibility of the recommendations. 

* Selected the eight depot locations based on the following criteria: 
- At least one depot for each service.
- Maintenance support for a variety of equipment types.
- Exposure to issues discussed in the LMI reports.
- High workload.
- Previous consolidation or workforce changes. 

* Analyzed the officials' responses (e.g., key examples of progress in 
implementing parts of the recommendations) collected from our 
interviews to determine the feasibility of each recommendation. 

We conducted this performance audit from January 2011 to June 2011 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. 

Summary of Findings: 

Objective 1: LMI's reports addressed 26 of the 33 subissues specified 
in section 322, and partially addressed the other 7 subissues. For 
example, within the issue of the adequacy of reports submitted to 
Congress on each military department's maintenance workload, the 
reports addressed all 4 subissues, including how accurately depot 
budget lines reflect depot-level workloads, the accuracy of certain 
depot maintenance calculations, the usefulness of current depot 
maintenance reporting requirements, and whether current budgetary 
guidelines provide sufficient flexibility during the year of execution 
to make best-value decisions. For each of the other issues, the LMI 
reports addressed some subissues and partially addressed one or more 
subissues. For example, the LMI report addressed 5 of the 8 subissues 
on current and future maintenance environments, but partially 
addressed the other 3: performance-based logistics, supply chain 
management, and private-sector depot-level capability and capacity. 

Objective 2: LMI's study was generally consistent with research 
standards that define a sound and complete study with regard to 
design, execution, and presentation. For example, the study's scope 
was consistent with the available guidance, the study team verified 
and validated the study data, and assumptions were identified in 
internal documents and the interim and final reports. However, we also 
found some areas of concern. These concerns included limited 
documentation on the maintenance workload and servicemember deployment 
statistical models used as the basis for some findings, the absence of 
information in the reports on the limitations present in some of the 
data used in the study, and unclear report organization. For example, 
we and officials from the military departments noted that 
subrecommendations were difficult to identify. 

Objective 3: Implementation of all five recommendations presented in 
LMI's report is feasible according to subject matter experts in the 
depot maintenance community whom we interviewed. The recommendations 
are (1) revise the statutory framework for depot maintenance, (2) link
acquisition and sustainment policies, (3) strengthen the core 
determination process, (4) improve depot maintenance reporting, and 
(5) establish an independent commission or series of facilitated 
forums to review the major alternatives for improving organic depot 
maintenance management and execution. Although feasible, the 
interviewees told us that they believe the fifth recommendation is 
unnecessary because issues highlighted in the study could be addressed 
by existing DOD bodies. Section 322 also specified that the final 
report shall include comments provided by the Secretary of Defense and 
secretaries of the military departments on the findings and 
recommendations of the study, but DOD's official response did not 
specifically address any findings or recommendations. DOD officials 
indicated that the department did not provide more specific comments 
because DOD did not provide the study—LMI-did. Our review of LMI's 
internal documents determined that DOD and military department 
officials did provide input and feedback on aspects of the study 
throughout its design, execution, and report presentation. Without 
DOD's views about LMI's findings and recommendations, Congress does 
not have all of the information it needs to help establish a way 
forward toward more effective and efficient depot-level maintenance. 

Recommendation for Executive Action: We are making a recommendation 
that DOD report to Congress with its views on LMI's recommendations, 
any statutory and policy changes needed to implement the 
recommendations, actions and timelines for accomplishing ongoing and 
planned actions to implement the recommendations, and estimated costs 
and benefits of implementing the recommendations. 

Objective 1: Extent Study Addressed Specified Issues: 
 
Overview - Study either addressed or partially addressed all 33 
specified subissues: 
 
The LMI study addressed 26 of the 33 subissues specified in section 
322, and partially addressed the remaining 7.[Footnote 8] The five 
major issues were as follows:  

* Specific contents, including quantitative analyses; direct input 
from DOD; identification of each type of maintenance activity; and 
examination of relevant laws, guidance, and GAO reports. 
- Four of the six subissues for this issue were addressed.  

* Life-cycle sustainment strategies and implementation plans. 
- Seven of the eight subissues for this issue were addressed.  

* Current and future maintenance environments. 
- Five of the eight subissues for this issue were addressed.  

* The visibility of each military department's maintenance workload in 
reports submitted to Congress. 
- All four subissues for this issue were addressed.  

* Specified contents for the final report, including recommendations 
to ensure an efficient and enduring DOD depot capability. 
- Six of the seven subissues for this issue were addressed.  

Four of six content subissues were addressed, and two were partially 
addressed: 

Quantitative analysis of post-reset DOD depot capability-—Addressed: 
Study presented the results of a quantitative analysis to make 
projections of the future need for depot maintenance and the 
utilization of workload capacity. 

Input from Secretary of Defense and military departments-—Addressed: 
Officials from the Office of the Secretary of Defense and the services—
as well as our review of LMI workpapers confirmed that they provided 
input to the LMI study team. However, the DOD letter included in LMI's 
final report did not identify any concerns or whether DOD concurred 
with LMI's recommendations. 

Input from regular and reserve components of the armed forces—-
Partially addressed: The LMI study team met with officials from 
regular components of the military, including select depots, but input 
from the reserve components was limited to one Army National Guard 
unit. 

• Identify and address each type of activity carried out at various 
maintenance facilities—Partially addressed: The study identified and 
addressed maintenance activities at facilities such as the major 
organic depots,[Footnote 9] but did not identify or address activities 
at other facilities specified in the law (such as regional sustainment-
level maintenance sites). 

• Examine relevant DOD and military department guidance, including 
budget guidance—-Addressed: The study presented applicable DOD 
guidance in a table and discussed department guidance specific to 
budgeting. 

• Examine applicable laws, as well as the relevant body of GAO work—-
Addressed: The study discussed laws(e.g. 10 U.S.C. § 2464: core 
logistics capabilities), recommended changes to statutes, and included 
a comprehensive appendix with summaries of relevant GAO reports. 

Seven of eight life-cycle sustainment strategy subissues were 
addressed, and one was partially addressed: 

Role of each type of maintenance activity-—Partially addressed: 
Discussed organic depot, forward-deployed, and commercial activities, 
but did not link the role of each type of maintenance activity to DOD 
strategies and implementation plans. 

Business operations-—Addressed: Discussed links between depots' 
business strategies and DOD's strategic planning and management of 
business operations. 

Workload projection-—Addressed: Discussed possible future workload 
changes and their causes, and evaluated the services' workload 
projections. 

Outcome-based performance management objectives—-Addressed: Discussed 
systems that use outcome-based metrics, and recommended improvements. 

Adequacy of information technology systems-—Addressed: Discussed how 
the depots are relying on planned modernization of technology to apply 
best practices. 

Workforce, including skills required and development-—Addressed: 
Discussed workforces for both the organic and commercial sectors of 
depot-level maintenance. 

Budget and fiscal planning policies-—Addressed: Discussed budget 
visibility and planning processes, and the ineffectiveness of existing 
budget exhibits to provide visibility. 

Capital investment strategies—Addressed: Discussed how revised use of 
core[Footnote 10] calculations could inform capital investment 
strategies. 

Five of eight subissues discussing maintenance environments were 
addressed, and three were partially addressed: 

Performance-based logistics-—Partially addressed: Discussed this 
maintenance strategy in the context of current private-sector support 
of depot-level maintenance, but did no discuss its impact on the 
future depot maintenance environment. 

Supply chain management-—Partially addressed: Discussed problems with 
DOD's approach to integrating supply chains with maintenance depots, 
but did not discuss how supply chain management should fit into the 
future depot maintenance environment. 

Condition-based maintenance[Footnote 11]—-Addressed: Discussed 
implementation of condition-based maintenance, noting that 
implementation is ongoing and uneven across the services. 

Reliability-based maintenance[Footnote 11]-—Addressed: Discussed DOD 
policies for this subissue, noted the services' inconsistent 
implementation, and provided examples. 

Consolidation and centralization-—Addressed: Discussed the different 
levels of maintenance, forward-based depot capacity, and recommended 
depot consolidation. 

Public-private partnerships—-Addressed: Discussed the services' plans 
to increase facility use by partnering with industry, and noted that 
implementation is inconsistent among the services. 

Private-sector depot-level capability and capacity—-Partially 
addressed: Discussed future capability of commercial depot-level 
maintenance (e.g., workforce and globalization issues), but did not 
cover private-sector capacity because data associated with this topic 
were proprietary. 

Impact of proprietary technical documentation-—Addressed: Discussed 
the present context for obtaining technical data rights. and 
highlighted areas for improvement. 

All four subissues discussing the adequate visibility of the 
maintenance workload were addressed: 

Whether depot budget lines in current budget displays accurately 
reflect depot-level workloads—-Addressed: Discussed budget exhibits in 
the context of needed improvements in their clarity and usefulness for 
DOD officials and Congress, and recommended improvements to budget 
reporting. 

Accuracy of core and 50/50[Footnote 12] calculations-—Addressed: 
Highlighted concerns about core and 50/50 calculations, concluded that 
current core calculations are ineffective and destabilize future 
workload capability, and recommended steps to address these concerns. 

Usefulness of current depot maintenance reporting requirements for 
oversight—-Addressed: Presented information on problems with reporting 
(e.g., reports do not relate to outcomes), concluded that senior DOD 
and service leaders and-Congress do not get timely warning of eroding 
capability or workload, and recommended improving depot maintenance 
reporting. 

Whether current budgetary guidelines provide financial flexibility 
during the execution year to permit military departments to make best-
value decisions between maintenance activities—-Addressed: Discussed 
the ability of the services to realign funding for depot-level 
maintenance, and noted that the LMI study team was unable to document 
any instances in which the existing guidelines precluded a service 
from making best-value decisions. 

Six of seven subissues specified for final report were addressed, and 
one was partially addressed: 

Description of the depot maintenance environment—-Addressed: Described 
the current workload, workforce, and funding of the depots, and 
modeled anticipated future changes. 

Recommendations on what would be required, in a post-reset environment 
to maintain an efficient and enduring DOD depot capability-—Addressed: 
Presented recommendations (such as improving core workload 
determinations, linking acquisitions and sustainment, and revising 
definition) to improve the depots' viability. 

Recommendations for changes to applicable law appropriate for a post-
reset depot maintenance environment-—Addressed: Recommended revising 
the statutory definition of depot maintenance, including a 
comprehensive definition of depot-level software maintenance. 

Recommendations on methodology for determining core logistics 
requirements-—Addressed: Recommended strengthening the core 
requirements determination process, improving how core is reported, 
and using best practices from the services to improve risk assessments. 

Business rules to keep DOD depots efficient and cost effective—-
Addressed: Recommended revising the core determination process to 
improve its utility as a business tool. 

Strategy to produce performance-driven outcomes and meet materiel 
readiness goals at DOD depots—-Partially addressed: Recommended 
linking depot maintenance products to operational performance, but did 
not specifically address total ownership cost and repair cycle time as 
specified.[Footnote 13] 

Comments from Secretary of Defense and military department secretaries 
on the study's findings and recommendations—-Addressed: LMI provided a 
draft copy of the final report to DOD, but DOD's official letter, 
included in LMI's final report, did not specifically address the 
report's findings and recommendations. 

Objective 2: Design, Execution, and Presentation: 

Overview - Final report findings were generally supported by data
and other information, but did not meet all the research standards: 

We determined that the final report findings were generally supported 
as a result of our evaluation of the study's design, execution, and 
presentation. 

* For example, the study's scope was consistent with guidance, and 
assumptions were well identified. In addition, the study team verified 
and validated the study data, the report's conclusions were sound and-
complete, and the report provided realistic options. 

However, we found some areas of concern.[Footnote 14] 

* Specifically, areas where we found concerns included not identifying 
data and model limitations in the report, a lack of documentation in 
the reports regarding modeling processes, unclear report organization, 
and insufficient support presented in the reports for some study 
conclusions, recommendations, and subrecommendations. 

To determine whether the findings in LMI's report were supported by 
the data and information examined, we evaluated how adequately the 
study met generally accepted research standards—on design, execution, 
and presentation—identified in our prior work.[Footnote 15] 

Study was generally well designed; and scope was consistent with 
guidance: 

LMI's study team used the language in section 322 to develop the 
study's scope. They informed the Senate and House Committees on Armed 
Services about the scope and approach of the study early on, and 
provided periodic updates regarding the study's design. 

The study team did not develop a formal study plan, but our review of 
the interim report and internal documents revealed that they 
developed, followed, and updated a comprehensive study approach, 
including an initial scoping document. The study team explained and 
documented deviations from the study approach. 

* The approach included using site visits, collecting and analyzing 
depot maintenance and servicemember-deployment data and other 
information, and interviewing depot maintenance experts. 

* LMI's study team members told us that they clarified the major issue 
areas after meeting with stakeholders. LMI's study team briefed key 
stakeholders, including staff for the Senate and House Committees on 
Armed Services and the DOD Maintenance Executive Steering Committee, 
of updates to the study approach and preliminary observations. 
[Footnote 16] 

* The study team originally planned to hold an industry forum and 
collect private-sector data to compare with DOD's data, but they did 
not to do so because they decided to focus on organic depot 
maintenance. In part, this change in scope and approach was due to 
LMI's inability to obtain certain types of information that industry 
officials considered proprietary. 

Study Design: The study identified assumptions that generally 
contributed to an objective and balanced research effort:  

The study identified assumptions about the future viability of organic 
depots and applied those assumptions consistently throughout the 
report. The final-report's findings, conclusions, and recommendations 
were developed using these assumptions.  

The study team assumed that:  

* A drawdown of operations in Iraq and Afghanistan and dramatic force 
structure cuts would lead to significant reductions in future depot 
maintenance requirements, particularly for the Army and Marine Corps.  

* DOD would face reduced funding support for depot maintenance, 
decreasing the amount of work performed in the organic depots.  

* Army and Marine Corps organic depot maintenance funding would follow 
similar patterns because these services engaged in the same ground 
operations.  

The study team used publicly available information to identify 
reasonable assumptions that are used throughout LM1's two reports to 
support the analyses.[Footnote 17] The assumptions in the study 
generally contributed to an objective and balanced research effort.  

The clarity of the findings, conclusions, and recommendations might, 
however, have been improved by identifying limitations to the study's 
assumptions in the reports. For example, because of decisions made 
about the scope of the study, the study team limited its 
considerations of historical data to the period from fiscal years 2001 
through 2009. As a result, the study team did not look at lessons 
learned and other information from DOD's downsizing actions, such as 
those in the 1990s. 
 
Study Execution: Methods were adequately executed and historical data 
were consistently used, but documentation was not readily available: 

The study methods were adequately executed, and the historical data 
were consistently used.  

* As originally. planned, LMI's study team visited at least one 
maintenance depot from each military service or depot type. In 
addition, they held meetings with a defense industry association and a 
private-sector facility conducting depot-level maintenance.  

* The information provided in the interim report showed some evidence 
that the study team analyzed DOD's life-cycle sustainment and 
maintenance strategies consistent with the study methods. However, 
LMI's internal documents lacked sufficient detail for us to assess 
actions the study team took to analyze these strategies.  

* The study's methods generally support accomplishing the objectives 
identified in the study's approach, but we could not determine whether 
the study's methods could produce the data and information necessary 
to address some of the objectives. 
- For example, one of the team's objectives was to examine the 
strategies to enable and monitor performance-driven outcomes in order 
to meet maintenance and readiness goals. The study team could not 
provide documents that clearly identified actions taken to acquire the 
necessary data and information for this objective.  

* The interim and final reports fully and completely identify the 
types of historical data presented and consistently used the 
historical data in the reports' analyses (e.g., data from fiscal years 
2001 through 2009).  

However, some documentation of methods used in the study was not 
readily available for our review and assessment.  

* Some documentation was limited to data worksheets and references to 
previous reports.  

* For example, to gain an understanding of how the study approach was 
executed we reviewed numerous internal documents, presentations,.and 
legislation, and conducted interviews with the study team,, instead of 
reviewing a single document describing the study methods, which was 
not available. 

Data verification and validation were conducted, but report did not 
identify data limitations: 

In accordance with International Organization for Standardization 9001 
guidance,[Footnote 18] LMI maintains a quality management system that 
requires quality and technical reviews of the study. 

* The study team verified and validated study data and documented 
verification and validation processes. 

* Although not required by LMI's review process, the LMI study team 
documented its efforts to validate data obtained from the military 
services and solicit comments on the draft report. The study team did 
not incorporate all of the military services' comments. 

* The study's quality reviewer told us that he met frequently with 
study team members to discuss their approach and to review data and 
information the study team had gathered. He also provided verbal and 
written comments to drafts of the interim and final reports, including 
information on the team's verification and validation of data. 

The study's quality reviewer and the study director recorded the 
completion of the quality review for the final report on February 11, 
2011, prior to report's issuance. 

We identified concerns regarding incomplete descriptions of data 
limitations and their impact. 

* For example, the study identified a limitation of Air Force and Navy 
aircraft and ship operating hours data for fiscal year 2009, noting 
that the data were incomplete at the time of the data submission. 
However, the study did-not describe the impact of this limitation or 
the team's methods for addressing the limitation. 

* In an interview, the study team told us that the military services' 
data are sometimes not comparable, but the team did not identify this 
limitation, or its methods for addressing this limitation in the 
report. When asked about this concern, LMI attributed the missing 
information to an internal decision to focus on strategic issues. 

Models were adequate for their intended purposes, but the study did 
not sufficiently explain the model limitations: 

The study's models were adequate and reasonable for their intended 
purposes-—to summarize simple predictive relationships among 
servicemember deployment levels, maintenance labor hours, and 
maintenance workforce.[Footnote 19] 

The study team properly assembled and used the models' historical data 
to support the study's planned approach, but internal documents and 
the reports provide little information about the reliability of the 
input data. 

* The usefulness of these models is limited by assumptions about 
deployment scenarios—-a limitation the study documentation did not 
mention. 

Report Presentation: Study addressed the objectives, but the final 
report did not sufficiently explain model processes and organization 
was unclear: 

The study addressed the objectives. We found the reports addressed 26 
of the 33 subissues and partially addressed the other 7 subissues (as 
stated in objective 1). 

However, concerns exist regarding descriptions of model processes and 
the clarity of the report's organization. 

* The final report's description of the models does not provide 
sufficient detail for a reader to independently replicate the 
analysis.[Footnote 20] 
- The report focuses on the models' results with little explanation or 
documentation of models' limitations or how different assumptions or 
the data may have affected results. 
- Members of the study team told us that they did not include detailed 
descriptions of the models to avoid confusing nontechnical readers. 
However, to avoid confusion, they might have alternatively presented 
the details of the models in an appendix or footnotes. 

* The final report includes an executive summary and topically 
organized chapters, but supporting evidence for the conclusions and 
recommendations is difficult to ascertain.
- For example, chapters 4, 5, and 6 of the final report present 
conclusions and recommendations under separate headings, but chapters 
2 and 3 present recommendations in the section titled "conclusions" 
but do not include a recommendations section.
- In addition, some data in the interim report were assembled from 
different sources than the data used in the corresponding sections of 
the final report. The different numbers could confuse or mislead 
report readers. Study team members explained that they developed the 
interim report data from different sources because the study team had 
not yet received requested data from the military services. 

Sound conclusions and realistic options provided; concerns with 
presented support for conclusions and recommendations exist: 

The conclusions presented in the final report were sound and complete 
in that they covered all the findings and addressed the 
vulnerabilities to DOD depot maintenance that were discussed in the 
final report.[Footnote 21] 

The final report's discussion of the recommendations presented 
realistic options. We found that members of the DOD depot maintenance 
community considered all five recommendations to be feasible (as we 
will discuss in objective 3). 

As noted earlier, the study was generally well executed, but we have 
concerns about the presentation of the support for some of the 
conclusions, recommendations, and subrecommendations in the final 
report. 

* For example, the report presented findings showing that out of the 
four military services, the Air Force and Navy's depot workloads were 
stable and did not.provide examples of how "nothing happened according 
to plan." Therefore, the conclusion that the depots' transitions from 
peacetime to wartime support during the last decade "consistently 
exhibited turbulence" may be overstated. 

* Also, the report does not establish a negative effect that warrants 
the subrecommendation to adopt a comprehensive definition of depot-
level software maintenance. 

* In addition, Army, Navy, and Air Force officials told us that the 
final report did not present specific steps for implementation, or the 
benefits and unintended consequences, of the recommendations. 

Objective 3: Feasibility of Recommendations:  

Overview - The DOD depot maintenance community stated that LMI's 
recommendations were feasible to implement:  

The DOD depot maintenance community considered all five 
recommendations in the LMI report to be feasible to implement. The 
five general recommendations for changes to depot management practices 
were: 

1. Revise the statutory framework of depot maintenance. 

2. Closely link acquisition and sustainment policies and outcomes with 
regard to depot maintenance. 

3. Strengthen the core determination process. 

4. Improve depot maintenance reporting. 

5. Establish an independent commission or sponsor a series of 
facilitated forums to review five major alternatives for improving 
organic depot maintenance management and execution. 

Even though members indicated that implementation is feasible during 
interviews with us, the  DOD depot maintenance community stated that 
establishing an independent commission to review depot maintenance is 
unnecessary. 

DOD's official response to the LMI study did not specifically address 
the findings and recommendations. 

* Section 322 specified that the study shall include comments.provided 
by the Secretary of  Defense and the secretaries of the military 
departments on the findings and recommendations of the study. 

* Officials within DOD stated that because the study_was prepared by 
LMI and not the department DOD did not provide more detailed official 
comments on the findings and recommendations contained in the study. 

* DOD and military department officials and staff, however, provided 
input and feedback on aspects of the study's design, execution, and 
presentation. 

Lack of specific comments could limit Congress' and DOD's ability to 
improve depot-level maintenance: 

Various officials within the DOD depot maintenance community provided 
us with examples of initiatives under way to address some of LMI's 
recommendations. 

LMI's study did not specifically address challenges or costs 
associated with implementing the recommendations. 

Because DOD did not provide specific comments on LMI's findings and 
recommendations, it is unclear as to strengths and weaknesses of LMI's 
recommendations, which recommendations DOD plans to implement, and 
what initiatives DOD has under way to improve depot maintenance. 

Without DOD's perspectives on LMI's recommendations, Congress may be 
limited in its ability to determine the actions needed to improve 
depot-level maintenance. 

Recommendation 1 - Revise the statutory framework of depot 
maintenance:  

The study recommended revising the statutory framework of depot 
maintenance and also included three subrecommendations: 

* Remove exclusions (e.g., modifications designed to "improve 
performance") from the statutory definition of depot maintenance. 

* Adopt a comprehensive definition of depot-level software maintenance. 

* Require better information (e.g., informing Congress prior to 
exiting Milestone B[Footnote 22] if a weapons system will not undergo 
depot maintenance) regarding weapons systems that do not undergo depot 
maintenance. 

According to members of the DOD depot maintenance community, revising 
the statutory definition of depot maintenance is feasible. Officials 
noted that the current definition is open to interpretation among the 
services and should be clarified. 

However, members of the community had mixed opinions regarding the 
feasibility of adopting the subrecommendation pertaining to a 
comprehensive definition of depot-level software maintenance. 

* Currently, officials noted that the services vary in terms of the 
types of software maintenance (e.g., rewriting code for a weapons 
system upgrade) that are performed at the depot level as well as their 
interpretation of what is considered to be software maintenance. 

* Air Force and Marine Corps officials told us that representatives 
from across the services are working with the Office of the Secretary 
of Defense to craft a revised DOD-wide definition of software 
maintenance. 

Recommendation 2 - Link acquisitions and sustainment: 

The study recommended changes to more closely link acquisition and 
sustainment policies and outcomes with regard to depot maintenance and 
also included two subrecommendations: 

* Designate completion of a strategic core logistics analysis as a 
specific exit criterion for Milestone A review.[Footnote 23] 

* Make decisions concerning the core requirements determination 
process and source of repair earlier in the acquisition process. 
[Footnote 24] 

The members of the DOD depot maintenance community generally agreed 
that linking acquisition and sustainment policies is feasible. 
Officials from some services also described related steps that their 
service has taken toward implementing the recommendation. 

* Air Force officials told us that they have already implemented these 
changes. 

* Navy officials told us that the Navy and the Marine Corps have a 
process in place to ensure that logistics and sustainment issues are 
considered early in the acquisition/engineering process. 

With regard to one of the subrecommendations, members of the community 
generally agreed that core logistics analysis should be done earlier 
in the acquisition process, although opinions varied as to whether 
Milestone A was the appropriate stage for analysis. Examples of 
feedback from service officials follow: 

* Army and Navy officials stated that there is insufficient 
information available regarding systems design at Milestone A to 
complete a core logistics analysis. 

* Army officials told us that they believe it is more appropriate to 
conduct core logistics analysis at Milestone B because at that stage a 
program manager is assigned and a baseline for the weapon system has 
been established. 

Recommendation 3 - Strengthen the core determination process: 

The study recommended strengthening the core determination process and 
also included three subrecommendations: 

* Structure a revised core determination process to be visible and 
readily understood.[Footnote 25] 

* Align core and 50/50 in a single statute. 

* Require all contracts that include sustainment as part of the 
statement of work to provide an annual estimate of the amount of 
funding expended on depot-level maintenance. 

According to members of the DOD depot maintenance community, 
strengthening the core determination process is feasible. 

However, some officials expressed reservations or mixed views about 
the feasibility of implementing two of the subrecommendations. For 
example: 

* Various service officials noted that aligning the core and 50/50 
policies into a single statute would be challenging because core 
analysis measures workload in direct labor hours while the 50/50 
report measures the balance of public- and private-sector funds made 
available for depot maintenance. 

* As to the feasibility of requiring all contracts to identify 
sustainment costs as part of the statement of work, Army officials 
stated this change may not be cost-effective. Specifically, the 
officials stated that this subrecommendation could make contract 
negotiations difficult because the Army still uses a lot of sole-
source contracting. Marine Corps officials also told us that this 
recommendation would be more useful if contractors were required to 
report where the depot work was conducted. 

Recommendation 4 - Improve depot maintenance reporting: 

The study recommended revising depot maintenance reporting and also 
included four subrecommendations: 

* Provide a more complete accounting of all products and services 
being purchased from the depot provider — including procurement, 
modernization, and sustainment elements. 

* Make available a more complete presentation of the contributions 
(e.g., work done on major product lines influencing the materiel 
availability elements) of all providers of depot maintenance. 

* Catalog, verify, validate, and accredit requirements determination 
methods and presentation of risk for each of the major depot product 
lines being resourced. 

* Present depot requirements in an operational context, linking inputs 
to the ability to achieve the outputs by which the services meet 
combatant commander needs. 

According to members of the DOD depot maintenance community, improving 
depot maintenance reporting is feasible. 

* Army and Navy officials asserted that their respective services each 
have an effective depot maintenance reporting process, and the Navy 
stated that this DOD-wide recommendation applies more to the other 
services. 

* Marine Corps officials stated that they were in the process of 
creating a maintenance planning tool to catalog, verify, and validate 
their requirements. 

Recommendation 5 - Establish an independent commission: 

The study recommended the establishment of an independent commission 
or sponsorship of a series of facilitated forums to review the 
following five major alternatives for improving organic depot 
maintenance management and execution: 

* Enhanced status quo (each service would continue to maintain its own 
depots, and a "corporate board" built on the existing Maintenance 
Executive Steering Committee would address issues such as workload 
imbalances and capacity underutilization). 

* Commodity executive agents (a single manager would be designated to 
be responsible for the management of specified commodities across the 
DOD enterprise). 

* Commercial management (contractors would assume responsibility for 
DOD's depots). 

* Public corporation (Congress would establish an entity to oversee, 
operate, and staff DOD's depots). 

* Defense agency or command (the current depot structure would be 
consolidated into a single agency or command). 

Most members of the DOD depot maintenance community told us that the 
recommendation is feasible, and some noted that prior depot 
maintenance studies contained comparable recommendations.25 

However, members of the community stated that the recommendation 
should not be implemented. 

* Air Force officials stated that the issues related to depot 
maintenance are process driven, and were not related to the 
organization's structure. Army officials also told us that they do not 
see the benefit of establishing a consolidated agency or command 
focused on depot maintenance. 

* Army officials told us that DOD has the ability to facilitate a 
series of forums through the Maintenance Executive Steering Committee. 
They said that such forums would allow the services to share best 
practices and DOD to adopt the practices that were applicable across 
the services. 

* Marine Corps and Navy officials also told us that the issues 
highlighted in the LMI final report could be more appropriately 
addressed by existing DOD bodies, such as the Maintenance Executive 
Steering Committee. 

Conclusions: 

The LMI study provides a good basis for moving forward to enhance the 
capability and efficiency of DOD's depots and provide the future 
logistics capabilities and capacity necessary for national defense. 

* The wide range of topics covered in the study reflect key depot-
level maintenance concerns, as outlined in legislation mandating the 
LMI study. 

* While LMI's reports did have some limitations with regard to 
information presentation, our review showed that the rigor of the 
study's design and execution typically adhered to generally accepted 
research standards. 

Because DOD did not provide specific comments on LMI's findings and
recommendations, it is difficult to ascertain which, if any, 
recommendations DOD plans to implement. By not providing these 
comments, DOD missed an opportunity to document its related ongoing 
and planned initiatives and to comment on the strengths and weaknesses 
of LMI s recommendations. 

Without these important perspectives and added information, DOD and 
military service leaders and Congress may not be optimally positioned 
to decide which—if any—of LMI's recommendations to implement, 
determine timetables for implementation, and take other actions that 
could improve the future effectiveness and efficiency of DOD's depot-
level maintenance. 

Recommendation for Executive Action: 

To enhance the capability and efficiency of DOD's depots and provide 
the future logistics capabilities and capacity necessary for national 
defense, we recommend that the Secretary of Defense direct the Under 
Secretary of Defense for Acquisition, Technology, and Logistics to 
provide a report to Congress—within 90 days of publication of our 
report—regarding DOD's and the military services' views on LMI's 
findings and recommendations. Among other things, the report should: 

* describe DOD's views on LMI's recommendations, 

* specify any statutory and policy changes needed to implement the 
recommendations, 

* identify actions and timelines for accomplishing ongoing and planned 
actions to implement the recommendations, and, 

* estimate the various costs and benefits associated with implementing 
the recommendations. 

Agency Comments, Third-Party Views, and Our Evaluation: 

In written comments on a draft of this report, DOD partially concurred 
with our recommendation. DOD stated that it is reviewing the findings 
and recommendations in the LMI study and believes that it is premature 
to provide the results of this effort until its analysis is complete. 
DOD added that a report to Congress on the Department's efforts is 
neither necessary nor required. As noted earlier, section 322 
specified that LMI's final report was to include comments from DOD on 
the study's findings and recommendations, but DOD did not specifically 
address the findings and recommendations in its official response. 
Therefore, we continue to believe that such comments would provide 
important context to help Congress determine the appropriate course of 
action when considering LMI's recommendations. 

In written comments on a draft of this report, LMI concurred with our 
acknowledgment that the study covered a broad set of depot maintenance 
issues well, using a sound research approach that produced reasonable 
recommendations. LMI also commented on our finding that 7 of the 33 
subissues specified in section 322 were partially addressed by its 
study. LMI noted that these 7 subissues were not covered in the 
study's reports to the same volume as the others, but stated that this 
was because the LMI study team determined that they were not critical 
elements of the study's findings and recommendations. LMI stated that 
these subissues were fully explored as part of the study. However, our 
criterion for evaluating whether LMI addressed all 33 subissues was 
the extent to which each of the subissues were covered in LMI's 
interim and final reports. Therefore, we believe our finding that 
LMI's reports did not fully address these 7 subissues as outlined in 
section 322 remains valid. 

Related GAO Products: 

Depot Maintenance: Navy Has Revised Its Estimated Workforce Cost for 
Basing an Aircraft Carrier at Mayport, Florida. [hyperlink, 
http://www.gao.gov/products/GAO-11-257R]. Washington, D.C.: March 3, 
2011. 

Depot Maintenance: Air Force Is Assessing Engine Maintenance Options 
for Work Currently Performed at Kelly Aviation Center. [hyperlink, 
http://www.gao.gov/products/GAO-11-274R]. Washington, D.C.: February 
11, 2011. 

Depot Maintenance: Improved Strategic Planning Needed to Ensure That 
Navy Depots Can Meet Future Maintenance Requirements. [hyperlink, 
http://www.gao.gov/products/GA0-10-585]. Washington, D.C.: June 11, 
2010. 

Depot Maintenance: Improved Strategic Planning Needed to Ensure That 
Air Force Depots Can Meet Future Maintenance Requirements. [hyperlink, 
http://www.gao.gov/products/GA0-10-526]. Washington, D.C.: May 14, 
2010. 

Depot Maintenance: Improved Strategic Planning Needed to Ensure That 
Army and Marine Corps Depots Can Meet Future Maintenance Requirements. 
[hyperlink, http://www.gao.gov/products/GAO-09-865]. Washington, D.C.: 
September 17, 2009. 

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. 

Depot Maintenance: DOD's Report to Congress on Its Public-Private 
Partnerships at Its Centers of Industrial and Technical Excellence 
(CITEs) Is Not Complete and Additional Information Would
Be Useful. [hyperlink, http://www.gao.gov/products/GAO-08-902R]. 
Washington, D.C.: July 1, 2008. 

Depot Maintenance: Issues and Options for Reporting on Military 
Depots. [hyperlink, http://www.gao.gov/products/GAO-08-761R]. 
Washington, D.C.: May 15, 2008. 

[End of briefing slides] 

Enclosure II: Comments from the Department of Defense: 

Office Of The Assistant Secretary Of Defense: 
Logistics And Materiel Readiness: 
3500 Defense Pentagon: 
Washington, DC 20301-3500: 

June 17, 2011: 

Mr. Jack E. Edwards: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. Edwards: 

This is the Department of Defense (DoD) response to the GAO Draft 
Report, GAO-11-568R, "Defense Logistics: DoD Input Needed on 
Implementing Depot Maintenance Study Recommendations," dated May 16, 
2011 (GAO Code 351555). 

The Department partially concurs with the GAO recommendation and 
appreciates the opportunity to comment on the GAO Draft Report 
(enclosed). 

My point of contact in this matter is Mr. Hal Amerau. He can be 
reached at (703) 697-1903. 

Sincerely, 

Signed by: 

Illegible, for: 

Alan F. Estevez: 
Principal Deputy: 

Enclosure: As stated. 

[End of letter] 

GAO Draft Report Dated May 16, 2011: 
GAO-11-568R (GAO Code 351555): 

"Defense Logistics: DOD Input Needed On Implementing Depot Maintenance 
Study Recommendations" 

Department Of Defense Comments To The GAO Recommendations: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to provide a report to Congress—within 90 days of 
publication of our report—regarding DoD's and the military services' 
views on LMI's findings and recommendations. Among other things, the 
report should: 

* Describe DoD's views on LMI's recommendations; 

* Specify any statutory and policy changes needed to implement the 
recommendations; 

* Identify actions and timelines for accomplishing ongoing and planned 
actions to implement the recommendations; and; 

* Estimate the various costs and benefits associated with implementing 
the recommendations (See page 35/GAO Draft Report.) 

DOD Response: Partially concur. The Department is actively reviewing 
the LMI findings and recommendations detailed in its independent study 
of the capabilities and efficiencies of the maintenance depots of the 
Department of Defense (DoD). The LMI study raises a number of issues 
that could have significant financial, organizational, legislative, 
and readiness implications. The Department intends to take the results 
of the study into account as it moves forward in this complex and 
important area. The Department is carefully analyzing each of the 
recommendations to determine their impact on DoD capabilities and to 
determine the DoD's way forward. It is premature to provide the 
results of the Department's efforts until its analyses is completed. 
The Department does not concur that a report to Congress on the 
Department's efforts is necessary or required. 

[End of enclosure] 

Enclosure III: Comments from LMI, Inc. 

LMI: 
2000 Corporate Ridge: 
McLean, VA 22102-7805: 
T: 703-971-9800: 
F: 703-917-7597: 
[hyperlink, http://www.lmi.org] 

June 15, 2011: 

Dr. Jack E. Edwards: 
Director, Defense Capabilities and Management: 
Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Dr. Edwards: 

This is LMI's response to the Government Accountability Office's draft 
report GAO 11-568R, Defense Logistics: DoD Input Needed on 
Implementing Depot Maintenance Study Recommendations. We appreciate 
the opportunity to comment on your review of our interim and final 
Duncan Hunter National Defense Authorization Act Section 322 reports 
on future DoD depot capabilities. Our reports were written to 
facilitate critical executive and legislative efforts to chart a fresh 
course toward more adaptive, responsive, and effective depot 
maintenance. 

With regard to your review, we concur with your acknowledgment that 
the study covered a broad set of depot maintenance issues well, using 
a sound research approach that produced reasonable recommendations. 
GAO found that our reports address the 33 sub-issues specified in 
Section 322 and the study was generally consistent with research 
standards that define a sound and complete study with regard to 
design, execution, and presentation. GAO noted that, according to 
subject matter experts in the depot maintenance community, the 
implementation of all five recommendations presented in LMI's final 
report is feasible. 

We would like to comment briefly on one point associated with your 
findings. According to GAO 11-568R, LMI's reports fully address 26 of 
the 33 required sub-issues and partially address the other
7 sub-issues. It is our view that, through the application of a 
variety of valid research techniques, we did, in fact, fully consider 
all 33 sub-issues during our study process. The sub-issues GAO 
identified as partially addressed are not covered in the reports to 
the same volume as the other issues because they were not critical 
elements of our findings and recommendations; but, be assured, they 
were fully explored as part of the study. We believe the content of 
our reports fully comports with the direction of the House and Senate 
Committees on Armed Services. The required content of the reports, 
particularly the final report, is clearly stipulated as seven areas (A—
G) in subsection (e) of the legislation. 

Our Section 322 study highlights critical factors that will shape the 
future of the defense depots. We believe the pragmatism of our 
recommendations will be proven as DoD moves to address fundamental 
changes necessary for the future management and execution of its depot 
maintenance programs. 

We are pleased to have produced the first comprehensive look at depot 
maintenance in a decade. 

Sincerely, 

Signed by: 

Jeffery P. Bennett: 
Senior Vice President, Logistics Management: 

[End of enclosure] 

Enclosure IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Jack E. Edwards, (202) 512-8246 or edwardsj@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Kimberly Seay, Assistant 
Director; Richard Hung; Foster Kerrison; Ron La Due Lake; Jaclyn 
Nelson; Jeff Tessin; Erik Wilkins-McKee; Michael Willems; and Delia 
Zee made key contributions to this report. 

[End of enclosure] 

Footnotes: 

[1] Pub. L. No. 110-417 (2008). 

[2] DOD defines organic depot activities as government-owned and 
government-operated activities that perform depot-level maintenance 
that are assigned to or part of a military service. 

[3] Obligations funding data are in constant fiscal year 2009 dollars. 

[4] H.R. Rep. No. 110-652, at 333 (2008).  

[5] Pub. L No. 110-417, § 322. 

[6] Reset refers to actions taken to repair, enhance, or replace 
military equipment used in support of operations under way, and 
associated sustainment. 

[7] GA0 identified frequently occurring, generally accepted research 
standards that are relevant for studies and define a sound and 
complete study as part of a 2006 review. The standards drew from 
several sources, including prior GAO work and external organizations 
such as the RAND Corporation. See GAO, Defense Transportation: Study 
Limitations Raise Questions about the Adequacy and Completeness of the 
Mobility Capabilities Study and Report, [hyperlink, 
http://www.gao.gov/products/GAO-06-936] (Washington, D.C.: Sept 20, 
2006); and Defense Management DOD Needs to Monitor and Assess 
Corrective Actions Resulting from Its Corrosion Study of the F-35 
Joint Strike Fighter, [hyperlink, 
http://www.gao.gov/products/GAO-11-171R] (Washington, D.C.: Dec. 16, 
2010). 

[8] We considered subissues to be addressed if the LMI reports 
discussed all topics specified within each subissue or included 
recommendations that were specified in the legislation, and partially 
addressed if the reports discussed some but not all of the specified 
topics. 

[9] Major organic depot maintenance activities are defined as those 
with more than 400 DOD civilian and U.S. uniformed military employees 
engaged in depot-level maintenance operations. 

[10] Core refers to a depot maintenance capability that is government-
owned and government-operated (including government personnel and 
government-owned and government-operated equipment and facilities) to 
ensure a ready and controlled source of technical competence and 
resources necessary for effective and 13 timely response to a 
mobilization, national defense contingencies, or other emergency 
requirements (10 U.S.C. § 2464). 

[11] Condition-based maintenance includes proactive maintenance tasks 
to predict or prevent equipment failures. It is different from 
reliability-based maintenance which collects and analyzes data on the 
function and performance of specific equipment in order to determine 
the maintenance approach needed to keep the equipment functioning 
effectively and prevent future failures. 

[12] Section 2466(a) of Title 10 of the United States Code states that 
subject to certain exceptions, not more than 50 percent of funds made 
available in a fiscal year to a military department or defense agency 
for depot-level maintenance and repair may be used to contract for the 
performance by nonfederal government personnel of such workload for the 
military department or agency. 

[13] Total ownership cost includes the costs to develop, procure, 
operate, maintain, and dispose of a weapon system. Repair cycle time 
is the average number of days that is required to repair a weapon 
system or a major component.  

[14] For the current review, we evaluated whether the evidence for 
each relevant subquestion had limited or no concerns, the evidence had 
concerns, or we could not determine the extent of limitations or 
concerns. Concerns may raise questions about the adequacy or 
completeness of the study. 

[15] Each of the three general standards has a number of subquestions 
(see [hyperlink, http://www.gao.gov/products/GA0-06-938] and 
[hyperlink, http://www.gao.gov/products/GAO-11-171R]). However, not 
all of these are applicable to every study. For example, some elements 
apply to scenarios, threats, modeling, and assumptions and may be 
relevant to studies that make future projections or estimates. 
Similarly, some elements apply to the verification and validation of 
data and may be relevant to studies that rely on quantitative analyses 
as a basis for findings. 

[16] The Maintenance Executive Steering Committee consists of senior 
maintenance and logistics representatives throughout DOD and is 
intended to serve as a mechanism for the coordinated review of DOD 
maintenance policies, systems, programs, and activities.  

[17] The LMI study team made these assumptions based on publicly 
available information such as the Sustainable Defense Task Force 
report, Debts, Deficits, and Defense: A Way Forward (June 11, 2010); 
and the Washington Headquarters Services, Directorate for information 
Operations and Report document. Active Duty Military Personnel 
Strengths by Regional Area and by Country (Sept. 30. 2009). 

[18] The International Organization for Standardization (ISO) is a 
nongovernmental organization that develops standards for use in the 
public and private sectors. ISO 9001 provides guidance on establishing 
a quality management system that provides confidence in an 
organization's ability to provide products that fulfill customer needs 
and expectations. 

[19] The study team could have improved the accuracy of its models by 
presenting a range of predictions (based on the observed prediction 
error). Larger samples and a wider range of variables also might have 
improved the accuracy of the models predictions. 

[20] Providing sufficient detail in a report so that a reader may 
independently replicate the analysis is a common criterion for 
documenting statistical or scientific research.  

[21] The final report presented two vulnerabilities that could affect 
the future viability of the organic depots: (1) a significant 
reduction in future depot maintenance requirements, and (2) reductions 
in near-term depot maintenance work and core sustaining depot 
maintenance workloads.  

[22] Milestone B marks the completion of the Technology Development 
phase and the beginning of the Engineering and Manufacturing 
Development phase of the acquisition process.  

[23] In order to reach Milestone A, the point at which a program 
enters the technology development phase, among other things an 
analysis of alternatives is conducted and a technology development 
strategy is created. We have previously recommended that DOD require 
an initial core assessment early in the acquisition process. DOD 
concurred with our recommendation and stated that it would revise 
applicable guidance to provide more specificity on how to identify and 
establish core capability during the acquisition process. See GAO, 
Depot Maintenance: Actions Needed to Identify and Establish Core 
Capability at Military Depots, GAO-09-83 (Washington, D.C.: May 14, 
2009). 

[24] We previously recommended that DOD improve core depot maintenance 
policies including revising depot maintenance core policy to include a 
forward look to incorporate future systems and equipment repair needs 
when developing core capability requirements and a direct link to the 
source-of-repair process. DOD implemented a revised core policy that 
addressed our recommendation. See GAO, Defense Logistics: Actions 
Needed to Overcome Capability Gaps in the Public Depot System, 
[hyperlink, http://www.gao.gov/products/GA0-02-105] (Washington, D.C.: 
Oct. 12, 2001). 

[25] We previously recommended that DOD improve its ability to assess 
core logistics capabilities with respect to fielded systems and 
correct any identified shortfalls. DOD concurred with our 
recommendations and planned to revise guidance on the core 
determination process. See [hyperlink, 
http://www.gao.gov/products/GAO-09-83]. 

[26] For prior studies identified by LMI, see Appendix B of LMI, Inc., 
Future Capability of DOD Maintenance Depots, LG901 M2 (McLean, Va.: 
February 2011). 

[End of section] 

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