Defense Management

Selection of Depot Maintenance Standard System Not Based on Sufficient Analyses Gao ID: AIMD-95-110 July 13, 1995

This report evaluates the Defense Department's (DOD) justification for developing and deploying the Depot Maintenance Standard System. DOD is developing the system to help streamline depot maintenance operations and manage resources more effectively at its repair depots. DOD spend about $13 billion annually to manufacture, overhaul, and repair equipment, such as airplanes, ships, and tanks and repairable parts of this equipment, such as radios and engines. Congress raised concerned that although DOD has spent billions of dollars for information technology during the past several years, DOD has not produced significant quality improvement, costs savings, and productivity gains in service operations. Congress required DOD to conduct a study to determine the best prototype depot maintenance system and directed GAO to assess the soundness of the study's conclusions. DOD, however, has not completed such a study. As a result, this report determines whether DOD had (1) based its selection on the system on convincing analyses of costs and benefits as well as economic and technical risks and (2) selected a strategy that would dramatically improve depot maintenance operations.

GAO found that: (1) DOD has not based its DMSS decisions on sufficient cost and benefit analyses or detailed assessments of economic and technical risks; (2) DOD may not achieve the marginal improvements envisioned, since it has failed to obtain project milestone reviews or approvals for DMSS that would ensure that system development and implementation decisions are consistent with sound business practices; (3) DMSS will not dramatically improve DOD depot maintenance or produce significant cost savings, since DOD has not reengineered its business practices; and (4) DOD may have made future reengineering efforts more difficult by entrenching inefficient and ineffective work processes.

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.

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