Defense Logistics

For years, the Air Force has relied on contractors for logistics support for planes that are similar to commercially available aircraft. Examples of aircraft using this kind of support include the C-9 aeromedical evacuation aircraft and the KC-10 tanker/airlift aircraft. Some high-cost, classified systems that are produced in small quantities, such as the U2 reconnaissance aircraft, also use this type of support arrangement. These arrangements can yield cost savings because it is possible to share common parts support and other costs, such as maintenance facilities and personnel, with other public and private sector users. The Air Force is required to report to Congress on all Air Force programs that are now using or plan to use a program the Air Force calls Total System Performance Responsibility or similar contractor support programs. GAO discusses the extent to which the Air Force's February 2000 report (1) identified programs or systems using or planning to use contractor support arrangements, (2) supported the Air Force's view that the contractor support provides equal or superior warfighting capabilities, (3) identified the impact of such support arrangements on the government's logistics depots and core government logistics management skills, and (4) identified process and criteria followed in determining whether government employees or the private sector can do logistics management more cost-effectively.

GAO noted that: (1) although the Air Force was required to identify all of its programs that are using or planning to use such support arrangements, the definitions used resulted in the identification of eight programs or systems as using or planning to use such support arrangements; (2) given the lack of definitions for Total System Performance Responsibility and similar programs in section 344 of the National Defense Authorization Act for Fiscal Year 2000, GAO does not question the legal propriety of the definitions the Air Force used in its report; (3) however, a more complete picture of the Air Force's use of multifunction, long-term contractor support would include many other systems and subsystems; (4) the Air Force could have included at least 75 systems that are using or planning to use such support arrangements; (5) although the Air Force was required to report on how these contractor support arrangements are expected to support readiness and warfighting capability, it provided a limited analysis for its conclusion; (6) while the report generally links the use of such support arrangements to equal or better weapon system availability and readiness, the impact of such support arrangements on readiness is uncertain because other factors that affect these areas were not addressed; (7) while the report was expected to address the impact of these contractor support arrangements on the government's logistics depots and on core government logistics management skills, the report provided only cursory comments on the process the Air Force used to make workload allocation decisions for depot maintenance; (8) it did not discuss the impact of contractor support on government depot maintenance capabilities or address other logistics management skills that may need to be maintained in-house; (9) thus, the report did not provide a clear picture of the impact of contractor support on core government logistics management skills, including that required for the military depots; (10) in responding to the requirement to identify the processes and criteria followed in determining whether government employees or the private sector can perform logistics management functions more cost-effectively, the report states that a business case analysis or a cost comparison is performed to determine the best value solution; and (11) however, GAO's work shows that this process is not always followed.