Depot Maintenance

Opportunities to Privatize Repair of Military Engines Gao ID: NSIAD-96-33 March 5, 1996

In recent years, Congress has expressed continuing interest in the Pentagon's management of its $15 billion depot maintenance program. One area of particular interest has been the allocation of depot maintenance workload between the public and private sectors, including various privatization initiatives. This report addresses the depot maintenance workload mix for an essential military commodity--gas turbine engines. GAO discusses (1) the rationale supporting the continued need for DOD to be able to repair engines at its own maintenance depots, (2) opportunities to privatize additional engine workloads, and (3) the impact that excess capacity within DOD's depot system has on the cost-effectiveness of decisions to privatize additional workloads.

GAO found that: (1) DOD maintains its engine repair capability in the public depot system to comply with statutory requirements and to reduce the costs and readiness risks associated with private-sector repairs; (2) most companies have the capacity to absorb additional military workloads, but doing so would increase per-unit repair costs; (3) the decision to realign Kelly Air Force Base and to close the San Antonio Air Logistics Center allows DOD to reduce excess engine capacity, improve the cost-effectiveness of its remaining engine repair facilities, and privatize additional commercial counterpart engine work; and (4) the decision to keep the depot open by privatizing its workload will limit or preclude any reduction in excess depot capacity and associated overhead costs.

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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