Depot Maintenance

Pursuant to a congressional request, GAO reviewed the Air Force's 50-percent ceiling waiver for depot maintenance, focusing on the: (1) extent to which the Air Force's justification for the waiver was due to its planned use of temporary contracts to support transitioning workloads; and (2) potential for the ceiling to be exceeded in fiscal years 2000 and 2001.

GAO noted that: (1) although the Air Force's explanation for the waiver was based primarily on the need to use temporary contracts to support transitioning workloads from closing depots, these temporary contracts represent only a minor share of planned Air Force contract workload for fiscal year (FY) 2000, and they did not in and of themselves create the need for a waiver; (2) a significant factor leading to the waiver was previous Air Force actions that increased the private sector's share of depot maintenance work from 36 percent in 1991 to close to the 50-percent ceiling in 2000--leaving little room to respond to emergencies by using additional contract maintenance without exceeding the 50 percent ceiling; (3) Air Force estimates indicate that it will come close, but not exceed the 50-percent ceiling in either FY 2000 or FY 2001; (4) the Air Force assumes that it can keep within the 50-percent ceiling during FY 2000 by transitioning from the private sector to military depots contract workload valued at about $63 million while preventing the value of other contract work from increasing above estimates previously made for that work; (5) while efforts are underway to identify specific workloads that may be candidates for transitioning to one of the military depots, it is unclear if the Air Force will be successful in identifying appropriate workloads and making the transition in time to influence the workload balance during FY 2000; (6) it is also uncertain whether the Air Force will be successful in holding its remaining contract depot maintenance workloads below previously identified estimates; (7) if the Air Force is not successful in these efforts, it will exceed the ceiling in FY 2000; (8) likewise, for FY 2001, the Air Force estimates that the private sector will account for 48 percent of the depot maintenance workload; (9) this estimate assumes that yet-to-be-identified contract workloads that are valued at about $103 million can be transferred to military depots while remaining contract work is kept at or below previous estimates; and (10) it is uncertain, however, whether the Air Force will be successful in managing its depot maintenance programs within the 50-percent ceiling for FY 2001.