Depot Maintenance

GAO analyzed the military departments' estimates of their funding used for depot maintenance work to be done by the public and private sectors during fiscal years 1999-2005. By law, the funding for work done by the private sector in a given year may not exceed 50 percent of the total. GAO found that future estimates provide a rough idea of the split between the amount of funding used for public and private sector depot maintenance workloads. However, the data has significant limitations because of errors, the inherent nature of budget estimates, and potential management actions that were not considered. As a result, actual data will likely differ significantly from the estimates. Given available information, the likely changes reflect a greater use of the private sector. This is particularly the case with the Air Force, where management actions or additional waivers will be needed to meet the 50-percent statutory cap.

GAO noted that: (1) the estimated funding to be used for depot maintenance work performed by the private sector increases annually during fiscal years 1999-2005; (2) the Army's and the Navy's estimates showed a slow increase in private sector maintenance work over this period, but the estimated private sector share remained below 50 percent; (3) the Air Force did not report on its depot maintenance estimates for the period; (4) preliminary data showed the Air Force's expenditures for depot maintenance workloads could exceed the 50-percent threshold between 2000 and 2003 unless actions are taken that would place additional work in the public sector; (5) Air Force officials have recognized that they may not be able to manage the workload within the statutory limit during fiscal year (FY) 2000; (6) the Air Force notified the Speaker of the House of Representatives and the President of the Senate that, as required by statute, the Secretary of the Air Force has approved a waiver of the 50-percent ceiling for FY 2000; (7) the reported data provides a rough estimate of future workload allocation, but it also has several limitations that affect its usefulness as a predictor of actual workload allocations; (8) portions of the data contained errors and inconsistencies; (9) some of the errors and inconsistencies may be resolved with the Department's report on actual data for FY 1999; (10) estimated data may vary significantly from actual experience because the data are developed from budget estimates and future years' defense requirements change over time; (11) Air Force actual depot maintenance workload funding allocations for 1999 were not available, however, other records indicated the potential for variance between planned and actual funding; (12) pilot programs to reengineer weapon system support activities are under way in each of the services and are shifting responsibility for more depot maintenance to the private sector; and (13) the data estimates do not yet fully reflect the future consequences of these actions.