Defense Depot Maintenance

In February 1998, the Defense Department (DOD) submitted a report to Congress on the distribution of depot maintenance workloads for fiscal year 1997. As required by law, GAO reviewed DOD's report on the percentage of depot maintenance funding provided to the public and private sector activities. GAO (1) assesses the completeness and consistency of workload distribution data reported by the military departments and defense agencies for fiscal year 1997 and (2) analyzes the procedures DOD used to define and quantify funding for depot maintenance workloads. GAO also provides preliminary information on the public and private sector workload distributions projected for fiscal years 1998 through 2003 and on the changes being considered by the Office of the Secretary of Defense and the military departments that could affect future reporting.

GAO noted that: (1) in February 1998, DOD reported that the military departments and defense agencies allocated a total of $10.3 billion in depot maintenance funds for FY 1997--$6.5 billion to public-sector facilities and $3.8 billion to private-sector contractors; (2) GAO's work shows that the military departments did not develop complete and consistent workload distribution information; (3) while recognizing the lack of clarity in the reporting requirements, if included the public-sector share of depot maintenance funding would have been $6.8 billion, and the private-sector share about $5.4 billion; (4) this condition exists for three reasons: (a) Office of the Secretary of Defense (OSD) guidance--while substantially improved over prior years--leaves room for varying interpretations of reporting requirements for several workload categories; (b) the military departments and defense agencies have not developed internal procedures and systems to facilitate timely and accurate reporting; and (c) the military departments, defense agencies and OSD have not resolved questions concerning whether funding for some depot-level workloads should be included in computing the public-private mix as required by 10 U.S.C. 2466; (5) without accurate data and consistent reporting between the two sectors, the data provides only a broad indication of the relative mix of funding provided to the public and private sectors; (6) thus, until the problems are corrected, future reports of public- and private-sector workload distribution will continue to be inaccurate; (7) although DOD is not required by statute to report estimates of future workload mix, it is essential that DOD maintain this data to support the oversight and management of depot maintenance activities and to monitor compliance with 10 U.S.C. 2466; (8) based on preliminary data developed by the military departments and defense agencies, total DOD-wide depot-level maintenance funding will increase from $13.4 billion in FY 1998 to $15.4 billion in FY 2003; and (9) while not yet resolved, the Air Force and Army are considering changes in future reporting criteria for several workload categories that could reduce the amount of reported depot-level funding in future years.

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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