Depot Maintenance: Action Needed to Avoid Exceeding Ceiling on Contract Workloads
NSIAD-00-193
Published: Aug 24, 2000. Publicly Released: Aug 24, 2000.
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Highlights
Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) congressional reports on depot maintenance workloads, focusing on: (1) DOD's compliance with the 50-50 requirement in 10 U.S.C. 2466 for fiscal years 1998 and 1999; (2) GAO's views on DOD's progress in improving the quality of the workload data for the previous fiscal years; and (3) the reasonableness of DOD's estimates of expenditures for fiscal years 2000 through 2004.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To improve the reporting of depot maintenance workload data to accurately reflect the allocation of work between the public and private sectors and comply with the requirement that not more than 50 percent of the depot maintenance work be performed by the private sector, the Secretary of Defense should require that the military services, in preparing the future year estimates of depot maintenance workloads that will be submitted each April, accurately reflect, to the extent practical, the projected maintenance costs and public-private sector allocations for new and upgraded systems. |
Closed – Implemented
OSD's revised guidance, dated November 2001, specifically referenced GAO in requiring the military services to incorporate future repair costs of new and upgraded weapon systems in the 50-50 future-years reports. Each military service's supplementary guidance was also revised to make this requirement more explicit and directive.
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| Department of Defense | To improve the reporting of depot maintenance workload data to accurately reflect the allocation of work between the public and private sectors and comply with the requirement that not more than 50 percent of the depot maintenance work be performed by the private sector, the Secretary of Defense should require the Secretary of the Air Force to implement a long-term strategy to manage its weapon system support programs to comply with the funding requirement that not more than 50 percent of the depot maintenance program be used for work performed by the private sector. |
Closed – Implemented
In August 2002, the Air Force published long-range strategic and master plans for depot maintenance. Subsequently, the Air Force issued several policy memorandums and revised regulations designed to implement provisions of these plans to better integrate source-of-repair decisions on new systems with 50-50 requirements. For example, in March 2003, the Air Force issued updated guidance concerning the depot workload approval process due to concerns about the depot maintenance workload distribution compliance for fiscal year 2003. These policy memorandums and regulatory changes illustrate that the Air Force has implemented GAO's recommendation for a long-term strategy to manage its weapon system support to comply with the 50-50 requirement.
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| Department of Defense | To improve the reporting of depot maintenance workload data to accurately reflect the allocation of work between the public and private sectors and comply with the requirement that not more than 50 percent of the depot maintenance work be performed by the private sector, the Secretary of Defense should require the Secretary of the Navy to issue comprehensive supplementary instructions tailoring the Office of the Secretary of Defense's guidance to the Navy's operating environment to improve workload reporting and to implement adequate management controls and documentation requirements. |
Closed – Implemented
The Navy issued revised 50-50 reporting guidance in November 2001. This guidance improved upon the initial set of instructions issued a year previously. The new guidance referenced OSD requirements, highlighted problem areas identified by GAO, and contained Navy-specific supplementary guidance for reporting problem areas and tailored to the Navy's operating environment. GAO's review of the Navy's reports issued in 2002, determined that the improved guidance resulted in better reporting. GAO also determined that the Navy somewhat improved its overall management of the 50-50 process, although GAO noted continuing deficiencies in controls and data validation.
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| Department of Defense | To improve the reporting of depot maintenance workload data to accurately reflect the allocation of work between the public and private sectors and comply with the requirement that not more than 50 percent of the depot maintenance work be performed by the private sector, the Secretary of Defense should direct that reporting services provide improved guidance and increased management attention to improve workload reporting in the areas of government furnished material, warranties, and software maintenance, as well as in identifying depot maintenance work accomplished in non-traditional activities and identifying reportable obligations for depot maintenance on contracts where such amounts are not readily identifiable. |
Closed – Implemented
The OSD 50-50 reporting guidance issued to the military departments on October 27, 2000, cited this recommendation and directed that the military departments improve guidance and management attention on the specific maintenance categories identified in the recommendation. GAO's subsequent review of the 50-50 reports, issued in 2001, indicated enhanced management awareness and actions in these areas and generally improved reporting. OSD continued to clarify and expand its guidance in the new data call issued in November 2001. GAO's 2002 audit showed increased attention to these and other problem areas noted.
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Topics
Defense procurementEquipment maintenanceFuture budget projectionsMaintenance services contractsPrivatizationReporting requirementsDepot maintenanceU.S. Air ForceU.S. ArmyPrivate sector