Army Depots

Pursuant to a congressional request, GAO reviewed the Army's efforts to build highly mechanized distribution centers at three depots, focusing on: (1) the present work load at one depot compared to the Army's early projections; (2) the actual cost of that center; (3) the status of work at the three depots; and (4) the Army's rationale for completing one center, given the potential excess capacity at the other two centers.

GAO found that: (1) the projected work-load increases the Army used to justify constructing the new distribution centers did not materialize; (2) although the Army estimated that the total work load would increase by 26 percent to 53 percent over a 4-year period, it had remained at the 1985 level; (3) the actual work load at each depot was lower than the Army projected; (4) Army officials did not formally analyze the reasons for the discrepancy between projected and actual work loads, but partially attributed the discrepancy to budget cuts and more modern systems; (5) from 1985 through 1989, the number of stocked items at the three depots steadily increased, and most items were largely inactive; (6) depot productivity continued to increase despite a decline in work hours; (7) the estimated cost of three distribution centers has increased 35 percent since 1984, from about $488 million to about $658 million; (8) the Army terminated a construction contract for one center, since the other two centers had the capacity to handle the work load; and (9) the Army completed construction at two depots and one was partially operational, but the software needed to achieve full automation at two centers was in the testing stage.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone: