Defense Management
Opportunities Exist to Improve Implementation of DOD's Long-Term Corrosion Strategy Gao ID: GAO-04-640 June 23, 2004Each year, the Department of Defense (DOD) spends an estimated $20 billion to repair the damage to military equipment and infrastructure caused by corrosion. Furthermore, corrosion profoundly impacts military readiness as well as the safety of military personnel. In the Bob Stump National Defense Authorization Act for Fiscal Year 2003, Congress directed that DOD develop a long-term corrosion strategy, including specific requirements, and that GAO assess it. DOD submitted its strategy in December 2003. This report assesses the potential of the corrosion strategy (in terms of three elements--resources, performance metrics, and policy guidance) to effectively prevent and mitigate corrosion and its effects on military equipment and infrastructure.
While DOD's new long-term corrosion strategy generally addresses the requirements in the congressional mandate, it falls short of representing a comprehensive plan needed to implement successfully the strategy and manage DOD's extensive corrosion problems in the future. An effective, results-oriented strategy identifies resources required to achieve its goals and outcome-based performance metrics that can measure progress toward achieving those goals. Without addressing certain key elements, the strategy is unlikely to serve as an effective tool in preventing and mitigating corrosion and its effects on military equipment and infrastructure. These shortcomings could lead to the loss of billions of dollars in avoidable maintenance costs and the degradation of safety and readiness. GAO's review of three key elements showed the following. Funding and personnel resources--The strategy does not identify the level of funding and personnel resources needed to implement the corrosion reduction plan in the near- or long-term. Officials in DOD's corrosion office said that resource needs are still being determined and firm estimates should be available in December 2004. However, preliminary projections made by the corrosion task force indicated that the DOD-wide corrosion reduction program would require about $1.9 billion for fiscal years 2004 through 2009. DOD and the services, however, have not included any funds for fiscal year 2004 and less than 10 percent of the task force's fiscal year 2005 estimates. While the strategy calls for a mechanism that ensures sustained, long-term funding, DOD has been using a year-by-year funding approach. Performance measures and milestones--While the strategy includes some performance measures and milestones, they are not the resultsoriented metrics needed to successfully monitor the program's progress. In addition, DOD does not plan to complete a critically needed, corrosion cost baseline study until 2011 because of limited funding. Without results-oriented metrics and a baseline, DOD will not be in a sound position to establish cost-effective resource priorities or monitor progress toward corrosion reduction. Policy guidance--While the strategy strengthens DOD's policy guidance on corrosion prevention and mitigation, improvements can be made. The new guidance establishes a review process for corrosion prevention plans for major weapon systems programs, such as the Joint Strike Fighter. However, the guidance does not extend the review to non-major weapons systems and infrastructure programs, which are under the purview of the military services. The guidance also does not require the Chairman, Joint Chiefs of Staff's Focused Logistics Functional Capabilities Review to consider corrosion prevention planning when it reviews project requirements.
RecommendationsOur 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.
Director: Team: Phone:GAO-04-640, Defense Management: Opportunities Exist to Improve Implementation of DOD's Long-Term Corrosion Strategy
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Report to Congressional Committees:
United States General Accounting Office:
GAO:
June 2004:
Defense Management:
Opportunities Exist to Improve Implementation of DOD's Long-Term
Corrosion Strategy:
GAO-04-640:
GAO Highlights:
Highlights of GAO-04-640, a report to congressional committees
Why GAO Did This Study:
Each year, the Department of Defense (DOD) spends an estimated $20
billion to repair the damage to military equipment and infrastructure
caused by corrosion. Furthermore, corrosion profoundly impacts
military readiness as well as the safety of military personnel.
In the Bob Stump National Defense Authorization Act for Fiscal Year
2003, Congress directed that DOD develop a long-term corrosion
strategy, including specific requirements, and that GAO assess it. DOD
submitted its strategy in December 2003. This report assesses the
potential of the corrosion strategy (in terms of three elements”
resources, performance metrics, and policy guidance) to effectively
prevent and mitigate corrosion and its effects on military equipment
and infrastructure.
What GAO Found:
While DOD's new long-term corrosion strategy generally addresses the
requirements in the congressional mandate, it falls short of
representing a comprehensive plan needed to implement successfully the
strategy and manage DOD‘s extensive corrosion problems in the future.
An effective, results-oriented strategy identifies resources required
to achieve its goals and outcome-based performance metrics that can
measure progress toward achieving those goals. Without addressing
certain key elements, the strategy is unlikely to serve as an effective
tool in preventing and mitigating corrosion and its effects on military
equipment and infrastructure. These shortcomings could lead to the loss
of billions of dollars in avoidable maintenance costs and the
degradation of safety and readiness. GAO‘s review of three key elements
showed the following:
* Funding and personnel resources”The strategy does not identify the
level of funding and personnel resources needed to implement the
corrosion reduction plan in the near- or long-term. Officials in DOD's
corrosion office said that resource needs are still being determined
and firm estimates should be available in December 2004. However,
preliminary projections made by the corrosion task force indicated that
the DOD-wide corrosion reduction program would require about $1.9
billion for fiscal years 2004 through 2009. DOD and the services,
however, have not included any funds for fiscal year 2004 and less than
10 percent of the task force's fiscal year 2005 estimates. While the
strategy calls for a mechanism that ensures sustained, long-term
funding, DOD has been using a year-by-year funding approach.
* Performance measures and milestones”While the strategy includes some
performance measures and milestones, they are not the results-oriented
metrics needed to successfully monitor the program's progress. In
addition, DOD does not plan to complete a critically needed, corrosion
cost baseline study until 2011 because of limited funding. Without
results-oriented metrics and a baseline, DOD will not be in a sound
position to establish cost-effective resource priorities or monitor
progress toward corrosion reduction.
* Policy guidance”While the strategy strengthens DOD's policy guidance
on corrosion prevention and mitigation, improvements can be made. The
new guidance establishes a review process for corrosion prevention
plans for major weapon systems programs, such as the Joint Strike
Fighter. However, the guidance does not extend the review to non-major
weapons systems and infrastructure programs, which are under the
purview of the military services. The guidance also does not require
the Chairman, Joint Chiefs of Staff‘s Focused Logistics Functional
Capabilities Review to consider corrosion prevention planning when it
reviews project requirements.
What GAO Recommends:
To provide better assurances that the long-term corrosion strategy is
implemented as envisioned by Congress, GAO is recommending that the
Secretary of Defense address certain shortcomings in funding,
performance measures, and policy.
In written comments, DOD agreed with all of these recommendations.
However, GAO emphasized the need to complete the baseline study well
before 2011, institutionalize corrosion project funding, and extend
the review of corrosion prevention plans.
www.gao.gov/cgi-bin/getrpt?GAO-04-640.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact William M. Solis at (202)
512-8365 or solisw@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Corrosion Strategy Shortcomings May Hinder Successful Implementation:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Table:
Table 1: Estimated Funding Needs for Corrosion Prevention Projects for
Fiscal Years 2004 through 2009 by Military Services:
United States General Accounting Office:
Washington, DC 20548:
June 23, 2004:
Congressional Committees:
Corrosion and its deteriorating impacts are so extensive that military
equipment and military infrastructure are severely affected. The
financial burdens are also substantial--estimates show that the
Department of Defense (DOD) spends as much as $20 billion a year in
direct costs alone to repair the damage caused by corrosion. Corrosion
has equally profound impacts on the safety and readiness of the
military services. For example, as we recently reported, the Navy
suspended carrier operations in March 2002 when one F-14 aircraft
crashed because its landing gear collapsed because of corrosion. Our
report also indicated that corrosion-related problems had degraded the
readiness of all of the Army's approximately 2,450 force modernization
helicopters.[Footnote 1]
Congress, in the fiscal year 2003 defense authorization act,[Footnote
2] directed the Secretary of Defense to develop and implement a long-
term strategy to reduce corrosion and the effects of corrosion on the
DOD's military equipment and infrastructure.[Footnote 3] The mandate
required that the strategy include, among other things, policy
guidance, performance measures and milestones, and an assessment of the
necessary personnel and funding to accomplish the long-term strategy.
The mandate also required that DOD include an assessment of these
elements for four specific initiatives. The mandate directed us to
monitor the implementation of the long-term strategy and submit our
report to Congress no later than 18 months after the date of the
enactment of the act.
In July 2003, following the enactment of this legislation, we issued a
report on corrosion costs and readiness issues. In that report, we
recommended, and DOD concurred with those recommendations, that in
crafting an effective strategy, DOD should include a number of key
elements, including clearly defined goals, outcome-oriented
objectives, performance measures, and the level of resources needed to
accomplish the goals and objectives.
DOD submitted its long-term corrosion strategy[Footnote 4] to Congress
in December 2003. As agreed with your offices, because so little time
has passed since the strategy was submitted, our assessment focused on
the potential of the overall corrosion strategy in terms of three
elements--funding and personnel resources, performance measures and
milestones, and policy guidance--to effectively prevent and mitigate
corrosion and its effects on military equipment and infrastructure in
the long term. We also assessed these three elements as they relate to
the four initiatives specifically identified in the congressional
mandate.
In conducting our review, we monitored the activities of the DOD
corrosion task force set up to develop the long-term strategy and
reviewed briefings and studies associated with its preparation. We met
with DOD and military service officials to obtain their views,
documentation, and studies on the strengths and weaknesses of the new
strategy. We also analyzed the adequacy of the strategy's key elements
by comparing them with criteria established in the Government
Performance and Results Act of 1993[Footnote 5] and related internal
controls guidance and studies. We conducted our review between November
2003 and April 2004 in accordance with generally accepted government
auditing standards and determined that the data used in the report are
sufficiently reliable for meeting our purposes. A detailed description
of our scope and methodology is provided in appendix I.
Results in Brief:
While DOD's new long-term corrosion strategy generally addresses the
requirements identified in the mandate (e.g., policy guidance,
performance measures and milestones, and an assessment of the necessary
funding and personnel), it falls short of representing the
comprehensive plan that is necessary to implement successfully the
strategy and manage DOD's extensive corrosion problems in the future.
As we described in our July 2003 report recommendation, a results-
oriented comprehensive plan identifies the level of resources needed to
achieve the strategy's goals and provides outcome-based performance
metrics to measure progress toward achieving the goals. Without fully
addressing these key elements, the strategy is unlikely to serve as an
effective management tool in preventing and mitigating corrosion and
its effects on military equipment and infrastructure. In addition,
without an effective strategy, DOD may lose or delay the opportunity to
save billions of dollars in avoidable maintenance costs for military
equipment and infrastructure by not investing in corrosion-reduction
efforts now. Our review of three key elements showed the following:
* Funding and personnel resources--While DOD's corrosion strategy
generally addresses the issue of funding, the strategy does not
identify the specific level of funding and personnel resources that are
needed to implement the long-term strategy, including the four
initiatives specified in the mandate. In developing the strategy, DOD
was to provide an assessment of the funding and personnel necessary to
accomplish the long-term strategy, including the four initiatives.
According to officials in DOD's corrosion office, an estimate of the
funding and personnel resources needed was not included because the
requirements are still being determined, although they said they expect
to have these estimates by December 2004. While DOD did not identify
funding and personnel needs in the strategy, the corrosion task force
charged with preparing the strategy developed a preliminary estimate of
funding needs, amounting to a total of about $1.9 billion for
fiscal years 2004 through 2009. However, DOD and the services have not
included any funding estimates for fiscal year 2004 and only
$27 million for fiscal year 2005 projects, about 9 percent of the task
force's projected needs. While the strategy calls for a funding
mechanism that will ensure sustained, long-term funding, DOD has thus
far used, and plans to continue using, a year-by-year approach. In
terms of personnel needs, the strategy identified the establishment of
a DOD Corrosion Policy and Oversight Office that would be headed by a
director and be supported by a task force of corrosion professionals
from government and industry.
* Performance measures and milestones--While DOD's corrosion strategy
identifies some performance measures and milestones for the four
initiatives, the metrics are not the results-oriented performance
measures needed to implement the strategy successfully. In addition,
DOD does not plan to complete a baseline study that is of critical
importance in measuring progress toward achieving the strategy's goals
and objectives until 2011 because of limited funding. The strategy
contains performance metrics that measure program activities, rather
than outcome-based performance metrics. For example, DOD plans to
measure progress by counting the number of major acquisition programs
that have developed corrosion prevention plans rather than by
determining the amount of savings realized within a specific time frame
from corrosion reduction projects involving Navy aircraft carriers.
Without a baseline and outcome-based performance metrics, DOD will be
unable to establish cost-effective resource priorities and measure--and
report on--its progress toward reducing corrosion and its impacts.
* Policy guidance--DOD strengthened its policy guidance on corrosion
prevention and mitigation in the long-term strategy, but improvements
can be made. The new guidance, contained in a policy
memorandum[Footnote 6] appended to the strategy, establishes a review
process for corrosion-related issues for major weapon systems programs,
such as the Joint Strike Fighter. According to DOD corrosion officials,
the guidance does not extend the review process to non-major weapons
systems and infrastructure programs, which are under the responsibility
of the individual military services, in order that the services can
retain flexibility in managing their own programs. Furthermore, DOD's
new corrosion strategy does not include the need for the Chairman,
Joint Chiefs of Staff's Focused Logistics Functional Capabilities
Review Board to consider corrosion prevention planning when it reviews
project requirements. One of the board's responsibilities is to help
ensure that an assessment of the sustainability of weapon systems is
incorporated into Chairman, Joint Chiefs of Staff requirements. While
the strategy provides general policy guidance, it does not specifically
provide guidance for the four initiatives.
To strengthen DOD's corrosion strategy, we are recommending that DOD
provide Congress with the long-term funding and personnel resources
needed for corrosion prevention and mitigation projects. We are also
recommending that DOD complete a departmentwide baseline corrosion
study and improve the strategy's corrosion reduction policy guidance.
In commenting on a draft of this report, DOD agreed with all of the
recommendations.
Background:
DOD acquires, operates, and maintains a vast array of physical assets,
ranging from aircraft, ships, and land vehicles to buildings, ports,
and other facilities. Corrosion is an extensive problem that affects
these assets and has an impact on military funding requirements,
readiness, and safety. It is estimated that the direct costs to DOD of
corrosion on military equipment and infrastructure is between
$10 billion and $20 billion annually.[Footnote 7]
In our prior work, we reported in July 2003 that, although the full
impact of corrosion could not be quantified because of the limited
amount of reliable data that DOD and the military services had
available, corrosion has a substantial impact in terms of cost,
readiness, and safety on military equipment and facilities. Moreover,
we found that DOD and the military services did not have an effective
management approach to mitigate and prevent corrosion. As a result, we
recommended, and DOD concurred, that it should develop a departmentwide
strategic plan with clearly defined goals, measurable outcome-oriented
objectives, and performance measures.
In recognizing the extent of DOD's corrosion problem, Congress enacted
legislation as part of the Bob Stump National Defense Authorization Act
for Fiscal Year 2003 that directed the Secretary of Defense to
designate an officer or organization to be responsible for the
prevention and mitigation of corrosion of military equipment and
infrastructure. The legislation also required the Secretary to develop
a long-term strategy to reduce corrosion and the effects of corrosion
on military equipment and infrastructure, and submit the report to
Congress no later than 12 months after the date of the enactment of the
Act.
The mandate required that the strategy include, among other things,
policy guidance, performance measures and milestones, and an assessment
of the necessary personnel and funding to accomplish the long-term
strategy. The mandate also required that DOD include an assessment of
these elements for four specific initiatives. These initiatives are:
(1) expansion of the emphasis on corrosion prevention and mitigation
within DOD to include coverage of infrastructure; (2) application
uniformly throughout DOD of requirements and criteria for the testing
and certification of new corrosion-prevention technologies for
equipment and infrastructure with similar characteristics, similar
missions, or similar operating environments; (3) implementation of
programs, including supporting databases, to ensure that a focused and
coordinated approach is taken throughout DOD to collect, review,
validate, and distribute information on proven methods and products
that are relevant to the prevention of corrosion of military equipment
and infrastructure; and (4) establishment of a coordinated research and
development program for the prevention and mitigation of corrosion for
new and existing military equipment and infrastructure that includes a
plan to transition new corrosion prevention technologies into
operational systems.
To prepare a strategy, DOD established a corrosion policy and oversight
task force. The task force is located in the Office of the Under
Secretary of Defense for Acquisitions, Technology, and Logistics and
reports to the Principal Deputy Under Secretary for Acquisitions,
Technology, and Logistics. The task force consists of seven working
groups responsible for addressing seven corrosion focus areas:
(1) policy and requirements; (2) impact, metrics, and sustainment;
(3) science and technology, (4) communication and outreach;
(5) training and doctrine; (6) facilities; and (7) specifications or
standards and product qualification. According to DOD officials, these
seven areas were identified to address the congressional concerns that
led to the mandate and the issues discussed in our 2003 report. These
officials said that because the key elements of the mandate (funding
and personnel, performance measures and milestones, and policy
guidance) are comprehensive, they each apply one way or another to the
seven focus areas in the strategy.
Corrosion Strategy Shortcomings May Hinder Successful Implementation:
While the long-term corrosion strategy generally addresses the
mandate's requirements, several shortcomings are likely to hamper the
successful implementation of DOD's long-term corrosion strategy. The
strategy (1) does not identify the level of funding and personnel
resources needed to tackle corrosion problems; (2) does not provide
outcome-oriented performance measures and a baseline study to measure
progress; and (3) strengthens existing policy guidance, but some
improvements can be made. In addition, we recommended in our July 2003
corrosion report, and DOD concurred with our recommendation, that a
long-term strategy should include elements compatible with the
Government Performance and Results Act of 1993. Among these elements
were the level of resources needed to accomplish the strategy's goals
and objectives and performance measures, such as the expected return on
investment and realized net savings of prevention projects that show
progress toward achieving the strategy's objectives.
Strategy Does Not Identify Specific Funding and Personnel Resources:
While DOD's corrosion strategy generally addresses the issue of
funding, it does not include any estimates of the specific dollar
amounts that are needed for its near-or long-term implementation.
According to the strategy, the newly formed Corrosion Policy and
Oversight task force will develop inputs to the Future Years Defense
Program based on corrosion requirements and projects. DOD corrosion
officials told us, however, that funding estimates were not included in
the strategy because DOD and the military services are still in the
process of determining the requirements. The officials said they expect
to have firm estimates by December 2004.
In a separate study during the preparation of the strategy, however,
DOD's corrosion task force developed a preliminary schedule of funding
requirements for corrosion reduction efforts. These estimates projected
that DOD and the military services would need a total of about
$1.9 billion in departmentwide corrosion prevention and mitigation
resources for fiscal years 2004 through 2009. DOD corrosion officials
said that the task force's figures represent an initial attempt to
estimate DOD's and the military service's funding needs. Table 1 shows
the task force's estimated funding requirements for corrosion
prevention and mitigation efforts for both military equipment and
infrastructure for the period from fiscal year 2004 through fiscal year
2009.
Table 1: Estimated Funding Needs for Corrosion Prevention Projects for
Fiscal Years 2004 through 2009 by Military Services:
Equipment: Army;
Fiscal year: 2004: $10.0;
Fiscal year: 2005: $81.9;
Fiscal year: 2006: $82.8;
Fiscal year: 2007: $83.8;
Fiscal year: 2008: $112.8;
Fiscal year: 2009: $155.8;
Total by service: $527.1.
Equipment: Navy/Marines;
Fiscal year: 2004: $30.0;
Fiscal year: 2005: $58.8;
Fiscal year: 2006: $47.5;
Fiscal year: 2007: $46.8;
Fiscal year: 2008: $43.4;
Fiscal year: 2009: $39.8;
Total by service: $266.3.
Equipment: Air Force;
Fiscal year: 2004: $15.4;
Fiscal year: 2005: $3.7;
Fiscal year: 2006: $24.5;
Fiscal year: 2007: $31.2;
Fiscal year: 2008: $35.7;
Fiscal year: 2009: $38.6;
Total by service: $149.1.
Facilities: All services;
Fiscal year: 2004: $19.0;
Fiscal year: 2005: $168.0;
Fiscal year: 2006: $177.0;
Fiscal year: 2007: $189.0;
Fiscal year: 2008: $195.0;
Fiscal year: 2009: $183.0;
Total by service: $931.0.
Total;
Fiscal year: 2004: $74.4;
Fiscal year: 2005: $312.4;
Fiscal year: 2006: $331.8;
Fiscal year: 2007: $350.8;
Fiscal year: 2008: $386.9;
Fiscal year: 2009: $417.2;
Total by service: $1,873.5.
Source: Corrosion Policy and Oversight Task Force.
[End of table]
The task force's estimates indicated that the services would need about
$74.4 million in fiscal year 2004 for corrosion prevention and
mitigation projects, but this funding has not been allocated or
obligated. The task force identified 93 projects that had high
potential returns on investment and were ready to be undertaken
immediately. These projects included, for example, the installation of
sensors to monitor fuel tanks and pipes for corrosion and the use of
corrosion-inhibiting lubricants for avionics equipment on military
aircraft. Corrosion officials told us that the $74.4 million was not
included in DOD's fiscal year 2004 budget request because the task
force developed the estimate too late to be incorporated in the budget
request. Corrosion officials said they hoped to obtain funding that
would become available during fiscal year 2004, but, as of April 2004,
DOD and the services had not allocated or obligated these funds.
The task force also estimated that the services would need about
$312 million for equipment and infrastructure corrosion projects in
fiscal year 2005. However, DOD's Comptroller officials told us that the
services included only $27 million, less than 10 percent of the
projected amount for departmentwide corrosion prevention and mitigation
projects in their fiscal year 2005 budget request. To fund these
projects, DOD Comptroller officials approved a budget change of
$27 million from a special project designed to counter threats to the
Civil Reserve Fleet and other aircraft to the services' operation and
maintenance accounts ($9 million each for Army and Air Force,
$7 million for the Navy, and $2 million for the Marine Corps). DOD
corrosion officials told us that they are using these service accounts
because DOD does not have an account that is dedicated to
departmentwide corrosion reduction. These officials also said that,
after the funds are appropriated, they plan to issue a letter of
instruction to the services requiring them to obtain approval from
DOD's corrosion office for the use of these funds. Of the $27 million,
DOD corrosion officials said they expect to use $24 million for
corrosion projects (e.g., for rinse facilities for the services'
helicopters and other aircraft and temporary shelters for military
equipment and vehicles), $2.5 million to begin a corrosion impact
baseline study; and $500,000 for the corrosion task force's operating
expenses. DOD corrosion officials told us that, while the $27 million
falls far short of the amount needed to fully implement the strategy,
it represents the first time that DOD expects to use funds for
corrosion reduction on a departmentwide basis, and it demonstrates
DOD's commitment to augment the funding resources that have previously
been under the purview of the military services.
DOD Comptroller officials told us that, in future fiscal years,
corrosion reduction efforts would likely continue to be funded on a
year-to-year basis by program offsets, such as those used for 2005.
They said they eventually expect that departmentwide funding will no
longer be needed as the military services assume a greater role in
funding their own corrosion reduction projects. Comptroller officials
said that the services have the knowledge and expertise to manage their
own corrosion control projects and, therefore, are in a much better
position to identify and allocate funding for these efforts. However,
DOD corrosion officials said that the services are not in a position of
knowing which corrosion projects have the best potential to provide
departmentwide benefits and, furthermore, that these projects are not
well coordinated within and among the military services.
DOD's corrosion officials said that the corrosion reduction strategy
may continue to be underfunded because of the lack of an effective long
term funding mechanism that would better ensure that corrosion
reduction projects have sustained funding over a period of years. At
the present time, the corrosion prevention program is being supported
piecemeal through budget change proposals or offsets. Corrosion
officials told us that with a long-term funding mechanism dedicated to
departmentwide corrosion prevention and mitigation, the program might
be able to secure a commitment for funding these projects for
future years. Such a mechanism could also fund projects that crosscut
the services and that have the greatest potential for cost savings.
Corrosion officials said that they prefer to have a long-term funding
mechanism, such as a program element, but the DOD Comptroller does not
think that this is necessary at this time.
As we reported in July 2003, the corrosion mitigation program may
continue to be underfunded because DOD and the military services
continue to give corrosion prevention a lower priority than other
requirements.[Footnote 8] According to DOD corrosion officials,
corrosion reduction projects must compete with other operation and
maintenance programs. Because DOD and the military services give higher
priority to projects that show immediate results, they have limited
funding for corrosion reduction efforts whose benefits may not be
apparent for many years. Corrosion officials told us that one of the
biggest challenges to getting needed funding is to change DOD and
military service personnel attitudes--from thinking that money spent on
corrosion prevention detracts from other projects to realizing that it
saves money in the long run.
According to DOD corrosion officials, if DOD and the services do not
request more funding for corrosion prevention projects, DOD may lose or
delay the opportunity to realize savings amounting to billions of
dollars in avoidable maintenance costs for military equipment and
facilities now and in the future. According to corrosion officials, the
average potential return on investment for a corrosion prevention
project is about 10 to 1, with some projects showing a return as high
as 80 to 1, and with the savings realized about 5 years after funding
begins. DOD corrosion officials said that this means, for example, that
if DOD invests $500 million in a corrosion project today, it could
realize a potential savings of about $4.5 billion 5 years from now.
In terms of personnel resources, the strategy generally provided an
assessment of the personnel necessary to manage the corrosion program
effectively in DOD and the services, but the strategy did not identify
the level of personnel resources needed to implement the strategy. The
strategy noted the establishment of an Office of Corrosion Policy and
Oversight that is responsible for developing and implementing the
corrosion strategy and specified that the office would have a director.
DOD corrosion officials told us the office also includes a deputy
director and engineer and that these positions are temporary. The
strategy also indicated that a corrosion prevention and control working
group, consisting primarily of corrosion professionals from DOD, would
provide support for the corrosion office. DOD corrosion officials said
these individuals are not permanently assigned to the office but serve
on a part-time basis. These officials added that, because the strategy
was recently established, DOD and the military services have had little
time to determine the number of personnel needed to implement it. These
officials told us that the requirements would likely be minimal and
they expect to have a firmer estimate by December 2004.
The strategy does not identify the specific amount of funding or
personnel needed to move ahead with the four initiatives specified in
the congressional mandate. While the strategy includes descriptions of
military equipment and facilities projects that address in varying ways
these four areas, it states that these projects require an assessment
of funding and other resources needed to support them. DOD corrosion
officials told us that they plan to systematically evaluate each
project and that this assessment will include determining the resources
needed to implement the effort.
Lack of Outcome-Based Performance Measures and Baseline Study Hamper
Tracking Progress and Setting Priorities:
While DOD's corrosion strategy includes performance measures and
milestones, they are not the outcome-oriented metrics that are needed
to successfully monitor the department's progress in mitigating
corrosion and its impacts. Instead, the strategy contains output-
oriented metrics that measure the number of program activities. For
example, DOD plans to measure progress toward achieving the strategy's
goals by counting the number of major acquisition programs that have
developed corrosion prevention plans, tracking the number of injury-
related incidents related to corroding equipment or facilities, and
recording the number of maintenance personnel enrolled in corrosion-
mitigation training modules. By contrast, an outcome-oriented
performance metric would allow DOD to determine how much corrosion-
prevention projects have reduced the amount of maintenance costs for
Navy aircraft carriers, decreased the failure rates for the Army's 155
millimeter medium-towed howitzer, or decreased Air Force Base fuel
pipeline ruptures--all within a certain timeframe.
In addition, the development of meaningful performance metrics will be
hampered until a baseline study of the costs and the extent of
corrosion problems departmentwide is completed. In our July 2003
report, we indicated that the lack of reliable data made it difficult
to adequately assess the overall impact of the corrosion problem. A
baseline study would identify the cost of corrosion on military
equipment and facilities across the services as well as corrosion's
impact on military personnel safety and operational readiness. Such a
study would document where corrosion problems exist, identify their
causes, and prioritize them according to their relative severity.
However, while the long-term strategy acknowledges the critical
importance of developing a baseline of corrosion costs, including those
related to safety and readiness, DOD does not plan to complete such a
baseline until 2011. DOD corrosion officials told us they plan to
allocate $2.5 million of the $27 million provided for fiscal year 2005
corrosion-related projects to begin such a study. DOD corrosion
officials told us that the task force estimated that it would take an
additional $1.25 million for each of the next 6 fiscal years (2006
through 2011) to complete the study, for a total cost of $10 million.
They said that it would take that long primarily because of the limited
funding available for the strategy, which has forced them to stretch
out funding for the baseline over a period of several years. The
officials also said that the study would take some time to complete
because of data reliability issues, the lack of consistency in
corrosion data within and among the military services, and the
incompatibility of information systems that contain the data.
Without a corrosion baseline, DOD will not be able to develop adequate
performance metrics to measure--or report on--its initial progress
toward reducing corrosion and its impacts. Furthermore, DOD will not
have an overall picture of the extent of corrosion problems, making it
difficult to effectively identify areas that are most severely impacted
by corrosion and that require high-priority attention and resources.
While DOD's corrosion strategy includes some performance measures and
milestones for the four initiatives, the metrics are not the results-
oriented performance measures needed to successfully implement the
strategy.
Strategy Strengthens DOD's Corrosion Mitigation Policy Guidance but
Could Be Improved:
As part of the long-term corrosion strategy, DOD strengthened its
policy guidance for corrosion prevention and control activities, but
there are opportunities to build on these improvements. The new
guidance explicitly calls for the consideration of corrosion prevention
and control planning during the earliest stages of the acquisition
process for military weapon systems and military infrastructure
programs; earlier guidance did not single out the need for such
planning. DOD also included the need to consider corrosion prevention
and control in an existing guidebook [Footnote 9] for weapons systems
program managers.
While the strategy contains a policy memorandum[Footnote 10] that sets
up a review process for corrosion-related issues for major weapon
systems programs (e.g., Joint Strike Fighter), it does not extend this
review to non-major weapon systems (e.g., Torpedo Defense System
Program) and infrastructure programs. The guidance directs the
corrosion prevention and control working group to regularly review the
adequacy of corrosion prevention plans of all weapon system programs
subject to Defense Acquisition Board review. If they identify an issue,
the product group will bring it to the attention of the board.
Furthermore, the policy memorandum states that the Acting
Undersecretary of Defense for Acquisitions, Technology, and Logistics
will personally evaluate the corrosion plans for programs subject to
board review. According to DOD corrosion officials, the guidance did
not extend this review to the non-major weapons programs, which are
under the responsibility of individual military services. The corrosion
officials said this was done so that the services could retain
flexibility in managing their own programs. Military service officials
told us that they have not established a corrosion prevention plan
review process for their programs because the policy memorandum is
relatively new, and they prefer to wait to see how the process works
before they establish a similar review process. However, these service
officials and DOD officials said that they recognize that all programs,
both major and non-major weapon systems and infrastructure, experience
significant corrosion impacts and that all of their corrosion
prevention plans would benefit from a review process.
In addition, DOD's new corrosion strategy does not include any
corrosion planning or review requirements for the Chairman, Joint
Chiefs of Staff's Focused Logistics Capabilities Board. However, Joint
Chiefs of Staff officials said they will include corrosion prevention
planning in the board's sustainability assessments of military weapon
systems. DOD corrosion officials told us that this effort by the Joint
Chiefs of Staff would support the strategy and enhance DOD's overall
corrosion reduction programs.
While the strategy provides general policy guidance, it does not
specifically provide policy guidance for the four initiatives.
Conclusions:
By focusing attention on the extensive and costly problem of corrosion
and its debilitating impact on military equipment and facilities, DOD's
new long-term corrosion strategy is a step in the right direction.
However, because the strategy falls short of providing the basic
elements of an effective management plan, DOD's ability to implement it
successfully remains at risk. Because of the strategy's limited
assessment of funding and personnel needs, lack of a baseline study,
and weak performance measures, it is not certain that DOD's corrosion
prevention and mitigation efforts will be adequately funded, monitored,
or thoroughly evaluated. Without a sufficient assessment of the funding
and personnel resources required to reduce the effects of corrosion,
Congress does not have the information it needs to make informed,
corrosion-related funding decisions in the future. In addition, if DOD
and the services do not adequately fund corrosion prevention efforts in
the near term, they will lose or delay the opportunity to
realize billions of dollars in avoidable maintenance costs over the
long term. They will also face increasing degradation in the safety and
readiness of military equipment and personnel. Furthermore, without
establishing a departmentwide corrosion baseline, DOD cannot reliably
estimate its overall resource needs, determine which ones have the
highest priority, and track and measure its progress toward meeting
these needs. Moreover, without good results-oriented performance
metrics, DOD cannot adequately measure its progress in reducing the
impact of corrosion. Finally, without expanding its policy guidance to
require a review of all corrosion prevention planning, DOD will not be
able to ensure that all new programs and activities--including non-
major weapon systems and infrastructure--are thoroughly evaluated. As a
result, some acquisition and construction programs could slip by
without effective planning to prevent and control corrosion. In
addition, DOD will miss an opportunity to strengthen its efforts to
reduce the impact of corrosion on all new acquisitions and facilities
in the future. Without fully addressing the strategy's weaknesses, the
effects of corrosion will continue to exact a tremendous toll on the
financial and operational condition of the military.
Recommendations for Executive Action:
To provide better assurances that the Department of Defense's long-term
corrosion strategy is successfully implemented as envisioned by
Congress, we are making five recommendations. We are recommending that
the Secretary of Defense instruct the Undersecretary of Defense for
Acquisition, Technology and Logistics, in consultation with the DOD
Comptroller, take the following actions:
* Establish a date to complete the corrosion baseline study well before
its original estimated completion date of 2011 in order that cost-
effective resource priorities and results-oriented performance
measures can be established to monitor progress in reducing corrosion
and its impacts on equipment and infrastructure;
* Establish a funding mechanism to implement the corrosion strategy
that would be consistent with the strategy's long-term focus; and:
* Submit to Congress, as part of the fiscal year 2006 budget
submission, a report identifying the long-term funding and personnel
resources needed to implement the strategy, a status report of
corrosion reduction projects funded in fiscal year 2005, and the status
of a baseline study.
In addition, we recommend that the Secretaries of the military services
establish policy guidance that would include the review of the
corrosion prevention and control plans of non-major weapons systems and
infrastructure programs.
Finally, we recommend that the Chairman, Joint Chiefs of Staff direct
the Focused Logistics Capabilities Board to include corrosion
prevention issues in its sustainability assessments of military weapon
systems.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, the Director of Defense
Procurement and Acquisitions Policy concurred with all five of our
recommendations. The comments are included in appendix II of
this report.
In concurring with our recommendation to complete a corrosion baseline
study as soon as possible, DOD noted that, as part of the long-term
strategic plan, it would continue its efforts to evaluate corrosion
costs. However, DOD did not indicate when it would complete the
overall, departmentwide baseline study of corrosion costs that we
believe is essential for establishing cost-effective resource
priorities and tracking progress towards reducing corrosion and its
impacts on equipment and infrastructure. We continue to believe that
this baseline study should be completed as soon as possible. Therefore,
we have modified our recommendation to be more specific and stated that
DOD should establish a date to complete the corrosion baseline study
well before its original estimated completion date of 2011.
In concurring with our recommendation to establish a funding mechanism
to implement the corrosion strategy that would be consistent with the
strategy's long-term focus, DOD stated that the corrosion office would
submit funding requests through the Planning, Programming, Budgeting,
and Execution process. In addition, DOD noted that funding requests for
corrosion prevention would compete for funds with other DOD programs
based on need priorities and fiscal constraints. Although DOD did not
provide specific details, we would expect that funding requests for
corrosion would be made during the budget submission process and be
included in DOD's submission to Congress rather than be made through
budget change proposals or offsets after funds are obligated. We would
also expect that corrosion prevention funding estimates would be
included in the Future Years Defense Program. Unless DOD adopts these
types of approaches, corrosion prevention funding will continue to
receive a lower priority than other DOD efforts, and as a result, DOD
will lose the opportunity to save billions of dollars in avoidable
maintenance costs and to improve the safety and readiness of military
equipment and infrastructure.
In concurring with our recommendation that the Secretaries of the
military services establish policy guidance calling for reviews of
corrosion prevention and control plans of non-major weapons systems and
infrastructure programs, DOD indicated that it would encourage the
Secretaries to implement such reviews. DOD also stated that non-major
programs are reviewed subject to the requirements of different
acquisition authorities within the military services. We do not believe
that DOD's comments are fully responsive to our recommendation. We
continue to believe that non-major weapons systems experience corrosion
problems similar to those experienced by major weapons systems and that
they would benefit from the same kind of corrosion prevention plan
review. Our recommendation also applies to infrastructure programs that
are primarily managed by the military services. We recognize that the
authority to manage the activities of non-major weapons systems and
infrastructure programs lies, for the most part, with the military
services and that is why our recommendation is directed to the
Secretaries of the services. As a result, we would expect the
Secretaries to implement the recommendation by establishing policy
guidance appropriate to their respective services.
We are sending copies of this report to the Secretary of Defense; the
Director, Office of Management and Budget; and other interested
congressional committees. We will also make copies available to others
upon request. In addition, the report will be available at no charge on
the GAO Web site at http://gao.gov.
Please contact me on (202) 512-8365 if you or your staff have any
questions concerning this report. Key contributors to this report were
Lawson Gist, Jr., Allen Westheimer, Hector Wong, Nancy Benco, and
Katherine Lenane.
Signed by:
William M. Solis, Director,
Defense Capabilities and Management:
List of Congressional Committees:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Ted Stevens:
Chairman:
The Honorable Daniel K. Inouye:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Duncan Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable Jerry Lewis:
Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To assess each of the three key areas of the report, we held numerous
discussions with officials of DOD's Corrosion Policy and Oversight task
force and reviewed relevant DOD documents, including the final strategy
report to Congress. Furthermore, to determine the adequacy of each key
area, we applied internal control tools and results-oriented
performance standards that are necessary components for successful
management activities in departments and, by extension, individual
programs.
To assess whether the DOD's corrosion strategy identified and obtained
resources to prevent and mitigate corrosion on equipment and
infrastructure, we reviewed funding requirements and cost estimates for
DOD and the military services and spoke to DOD officials about unfunded
corrosion prevention project requirements, the identification of
funding resources, and future-year funding requirements. We also
reviewed the unfunded service requirements list and the fiscal year
2004 corrosion prevention projects list. We interviewed DOD Comptroller
officials and discussed the fiscal year 2005 budget request and the
prospect for future years funding. We also discussed our review of
DOD's Program Budget Directive document to understand why the task
force did not have its own budgeted account.
To determine whether the strategy's performance measures and baseline
data were adequate to prevent and mitigate corrosion DOD-wide, we
interviewed the leader of the task force working group for Metrics,
Impacts, and Sustainment about the development of the strategy's
performance measures, barriers to gathering cost data across the
military services, and plans to develop a corrosion cost baseline. We
analyzed the costs used to prepare existing cost impact studies,
particularly studies the metrics working groups plan to use to help
establish the baseline. We observed meetings and internal discussions
of the working group for Metrics, Impacts, and Sustainment at four
separate corrosion forums sponsored by the task force. We also reviewed
corrosion prevention documents related to the development of
performance metrics and the baseline study.
To assess the adequacy of the strategy's policy guidance for preventing
and mitigating corrosion, we met with the Office of the Deputy
Undersecretary of Defense for Defense Systems, the Joint Chiefs of
Staff for Logistics, and members of the task force's working group for
Policy and Requirements. To determine how the corrosion policy affected
military infrastructure, we interviewed officials in the Office of the
Deputy Under Secretary of Defense for Installations and Environment,
and members of the task force's working group for Facilities. We also
attended the TriService Corrosion Conference, the Army Corrosion
Conference, and all four Corrosion Forums sponsored by the corrosion
task force to better understand the role of policy and its impact on
military equipment and infrastructure. We also reviewed relevant policy
documents, memos, instructions, and regulations.
To assess the reliability of the estimated funding needs for corrosion
prevention projects for fiscal years 2004 through 2009 by the military
services we (1) interviewed officials knowledgeable about the data and
(2) assessed related funding requirements studies and reports. We
determined that the data were sufficiently reliable for the purposes of
this report. We conducted our review between November 2003 and April
2004 in accordance with generally accepted government auditing
standards.
[End of section]
Appendix II: Comments from the Department of Defense:
Note: Page numbers in the draft report may differ from those in this
report.
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
3000 DEFENSE PENTAGON
WASHINGTON, DC 20301-3000:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
JUN 16 2004:
Mr. William M. Solis:
Defense Capabilities and Management
U.S. General Accounting Office
Washington, D.C. 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-04-640 "DEFENSE MANAGEMENT: Opportunities Exist to Improve
Implementation of DoD's Long-Term Corrosion Strategy," dated May 12,
2004 (GAO Code 350433).
The Department continues to consider corrosion to be an important issue
associated with cost, readiness, and safety of its weapons systems and
facilities. As a result, DoD has in the past and will continue
combating corrosion and corrodibility in its many forms and focus on
means to prevent and mitigate corrosion within the overall mission and
obligations. We are pleased that GAO observed the Department's recent
strategic planning activities related to corrosion and believe it is
beneficial to both organizations in helping to place corrosion within
our national security context.
The GAO report makes five "Recommendations for Executive Action," in
which the Department concurs (enclosed) and remains committed to
meeting the requirements of the Congress and, to the extent compatible
with its core mission, the positive recommendations of the subject GAO
report. The Department's primary point of contact for this report is
Daniel J. Dunmire, Director, Corrosion Policy and Oversight and can be
reached at 703-681-3464, or via e-mail at daniel.dunmire@osd.mil.
Enclosure As stated:
Signed by:
Deidre A. Lee:
Director, Defense Procurement and Acquisition Policy:
GAO DRAFT REPORT - DATED MAY 12, 2004 GAO CODE 350433/GAO-04-640:
"DEFENSE MANAGEMENT: Opportunities Exist to Improve Implementation of
DOD's Long-Term Corrosion Strategy":
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
To provide better assurances that the Department of Defense's long-term
corrosion strategy is successfully implemented as envisioned by
Congress, GAO recommended that the Secretary of Defense instruct the
Under Secretary of Defense for Acquisition, Technology, and Logistics,
in consultation with the DoD Comptroller, to take the following
actions:
RECOMMENDATION 1: Complete a corrosion baseline study as soon as
possible so that cost-effective resource priorities and results-
oriented performance measures can be established to monitor progress in
reducing corrosion and its impacts on equipment and infrastructure. (p.
20/GAO Draft Report):
DoD RESPONSE:
Concur: DoD will continue Cost of Corrosion (CoC) Studies as part of
its long term strategic plan. These CoC studies provide valuable
information that will help DoD managers pinpoint areas requiring
attention and enable them to make decisions on how to prioritize future
investments. Performance in terms of operational benefits and return-
on-investment will be measured and intangible benefits will be
quantified, when possible, and evaluated.
RECOMMENDATION 2: Establish a funding mechanism to implement the
corrosion strategy that would be consistent with the strategy's long-
term focus. (p. 20/GAO Draft Report):
DoD RESPONSE:
Concur: The Corrosion Prevention and Control (CPC) Policy and Oversight
Office will submit funding requests through the Planning, Programming,
Budgeting, and Execution (PPBE) process, and will compete with other
DoD programs for funds based on priority of need and fiscal
constraints.
RECOMMENDATION 3: Submit to Congress, as part of the fiscal year 2006
budget submission, a report identifying the long-term funding and
personnel resources needed to implement the strategy; the status report
of corrosion reduction projects funded in fiscal year 2005; and the
status of a baseline study. (p. 20/GAO Draft Report):
DoD RESPONSE:
Concur: As part of the FY06 budget submission, DoD will submit a report
identifying the long-term funding and personnel resources to implement
the strategy. A list of candidate corrosion reduction projects for FY05
will be included. The status of the baseline study discussed in the
answer to recommendation one will be included.
RECOMMENDATION 4: The GAO recommended that the Secretaries of the
Military Services establish policy guidance that would include the
review of the corrosion prevention and control plans of non-major
weapons systems and infrastructure programs. (p. 20/GAO Draft Report):
DoD RESPONSE:
Concur: Currently, DoD policy encourages but does not direct Service
Secretaries to implement appropriate reviews of corrosion prevention
and mitigation plans for lower acquisition level programs. However,
Corrosion Prevention Control (CPC) language that will require all
programs needing acquisition plans to have a CPC plan is being
considered for incorporation in the Defense Federal Acquisition
Regulation. All programs requiring acquisition plans are reviewed by
different acquisition authorities depending on the acquisition level of
a program. As a result, non-major programs are reviewed subject to the
requirements of acquisition authorities within the military services.
RECOMMENDATION 5: The GAO recommended that the Chairman, Joint Chiefs
of Staff, direct the Focused Logistics Capabilities Board to include
corrosion prevention issues in the sustainability assessments of
military weapon systems. (p. 20/GAO Draft Report):
DoD RESPONSE:
Concur: The Vice-Chairman of the Joint Chiefs of Staff is the vice
chair for the Defense Acquisition Board (DAB), and as such considers
the corrosion prevention issues associated with all programs requiring
DAB reviews. In addition, the Joint Chiefs of Staff Focused Logistics
Capabilities Board has agreed to consider corrosion planning when it
performs sustainability assessments of military weapon systems.
FOOTNOTES
[1] U.S. General Accounting Office, Defense Management: Opportunities
to Reduce Corrosion Costs and Increase Readiness, GAO-03-753
(Washington, D.C.: July 7, 2003).
[2] Bob Stump National Defense Authorization Act for Fiscal Year 2003,
Pub. L. 107-314, § 1067 (Dec. 2, 2002).
[3] The act defines corrosion as the deterioration of a material or its
properties due to a reaction of that material with its chemical
environment; it defines military equipment as all weapon systems,
weapon platforms, vehicles, munitions, and the components of such
items; and it defines infrastructure as all buildings, structures,
airfields, port facilities, surface and subterranean utility systems,
heating and cooling systems, fuel tanks, pavements, and bridges.
[4] Department of Defense, Report to Congress, Department of Defense,
Long-Term Strategy to Reduce Corrosion and the Effects of Corrosion on
the Military Equipment and Infrastructure of the Department of Defense
(Washington, D.C.: Dec. 2003).
[5] Pub. L. No. 103-62 (1993).
[6] Policy Memorandum dated November 12, 2003, from Acting Under
Secretary of Defense for Acquisition, Technology and Logistics to
Secretary of the Military Departments.
[7] GAO-03-753.
[8] GAO-03-753.
[9] Office of the Under Secretary of Defense for Acquisition,
Technology, and Logistics, Designing and Assessing Supportability in
DOD Weapons Systems Guidebook (Washington, D.C.: Oct. 24, 2003).
[10] Policy Memorandum dated November 12, 2003, from Acting Under
Secretary of Defense for Acquisition, Technology, and Logistics to
Secretary of the Military Departments.
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