The Department of Defense (DOD) estimates that corrosion costs the department over $23 billion each year. Corrosionthe unintended destruction or deterioration of a material due to interaction with the environmentaffects military readiness. According to a 2009 study, corrosion was responsible for taking up to 16 percent of military assets, most notably aircraft, out of action. Corrosion also creates safety hazards. GAO reported in 2007 that the Army attributed over 50 aircraft accidents and 12 fatalities to corrosion since 1985. Corrosion takes such varied forms as rusting; pitting; calcium or other mineral buildup; degradation from exposure to ultraviolet light; and mold, mildew, and other organic decay. It negatively affects all military assets, including equipment and infrastructure. In 2003, DOD created the Office of Corrosion Policy and Oversight (Corrosion Office), which is responsible for the prevention and mitigation of corrosion. Since 2008, the Director of the Corrosion Office reports directly to the Under Secretary of Defense for Acquisition, Technology and Logistics.
Corrosion, if left unchecked, can degrade the readiness and safety of equipment and facilities and can result in substantial, sometimes avoidable, costs. The Defense Science Board Task Force estimated in a 2004 report that 30 percent of corrosion costs could be avoided through proper investment in prevention and mitigation of corrosion during design, manufacture, and sustainment. Using fiscal year 2006 data, DOD's Corrosion Office estimated that approximately a quarter of the $80 billion in annual expenses to maintain its ships, aircraft, strategic missiles, and ground combat and tactical vehicles is spent for corrosion-related concerns. DOD also spends about $10 billion annually to maintain about 577,000 buildings and structures, with about $1.9 billion of that amount spent for corrosion-related concerns. According to DOD, increased corrosion prevention and control efforts are needed to adequately address the wide-ranging and expensive effects of corrosion on equipment and infrastructure. However, DOD did not fund about one-third of acceptable corrosion projects for fiscal years 2005 through 2010. Also, military departments have not validated the cost-effectiveness of many of the previously funded corrosion projects.
To target funding toward corrosion prevention and control, DOD established a separate program element and line item within its budget. Among other things, the Corrosion Office uses much of that budget to fund projects designed to develop and test new technologies. To receive Corrosion Office funding, the military departments submit project proposals that are evaluated by a panel of experts assembled by the Director of the Corrosion Office. The Corrosion Office currently funds up to $500,000 per project, and the military departments pledge complementary funding for each project they propose. The level of military department funding and the estimated return on investment are two of the criteria used to evaluate the projects' proposals. For fiscal years 2005 through 2010, the Corrosion Office judged 271 corrosion prevention and control projects to be acceptable for funding. However, DOD funded $129 million (63 percent) of the $206 million that was needed to fund those 271 projects.
During the 6 years that the Corrosion Office has been funding corrosion projects, the average estimated return on investment for those projects has been 50:1. DOD is currently asking the military departments to validate the actual return on investment for the projects funded in fiscal year 2005 compared to the original estimates. To date, validations have been completed for 10 of the 28 corrosion projects funded in that fiscal year. Nine of the 10 projects were facilities projects with a validated return on investment of 11:1. Weapons projects have been estimated to have higher returns on investment (67:1 average), but these estimates have not been validated by the military departments. Also, none of those estimates have been independently validated.
If the corrosion prevention and control projects accepted from fiscal years 2005 through 2010 had been fully funded, DOD potentially could have avoided $3.6 billion in corrosion-related costsassuming those projects achieved the same level of cost-effectiveness as was estimated for all accepted projects in those years. In April 2010, GAO reported that the corrosion requirements for the fiscal year 2011 budget identified $12 million for projects, leaving an unfunded requirement of about $35 million. If fully funded, that $35 million could result in a potential cost avoidance of $418 million. Similarly, by underfunding all of its estimated corrosion prevention and control requirements, DOD may be missing an opportunity for additional cost avoidance totaling $1.4 billion.
However, these calculations are highly contingent on the accuracy of estimated return on investment data provided by the Corrosion Office, much of which have not been validated by the military departments or an independent entity. GAO has recommended that the Corrosion Office ensure that return on investment estimates for funded corrosion prevention and control projects are validated. If the Corrosion Office wishes to convince DOD and congressional decision makers that more fully funding its corrosion prevention programs could provide such a significant return on investment, the Corrosion Office needs to complete the validation of return on investment estimates in order to demonstrate the costs and benefits of its corrosion prevention and control projects.
GAO is required by law to report annually on DOD's corrosion prevention and control budget submission and on the corrosion report that accompanies defense budget materials. GAO has also done other work on corrosion issues. This analysis is based on GAO's previously published work in that area from 2003 through 2010.
For additional information about this area, contact Jack E. Edwards at (202) 512-8246 or email@example.com.