Depot Maintenance
Actions Needed to Identify and Establish Core Capability at Military Depots Gao ID: GAO-09-83 May 14, 2009The Department of Defense (DOD) is required, by law, to maintain a core logistics capability that is government owned and government operated to meet contingency and other emergency requirements. Military depots play a key role in maintaining this "core capability," although in recent years DOD has significantly increased its use of contractors. At the subcommittee's request, GAO examined the extent to which (1) DOD has accurately assessed whether it has the required core capabilities in military depots and (2) DOD is preparing to support future core requirements for new and modified systems. GAO reviewed DOD's biennial process for determining core capability requirements and the associated workloads for fielded systems. GAO also reviewed whether DOD had identified and established core capability in a timely manner for new and modified systems.
DOD, through its biennial core process, has not comprehensively and accurately assessed whether it has the required core capability to support fielded systems in military depots. Although DOD internally reported that its maintenance workload of 92.7 million hours in 2007 was "well over" the minimum of 70.5 million hours needed to fulfill core requirements at military depots and that the services were complying with their core capability requirements, this assessment did not show capability shortfalls identified by the services in their core computations. GAO's analysis of the services' 2007 core capabilities data determined that the Army, Navy, and Marine Corps had shortfalls for some equipment categories or technologies. For example, the Army identified core shortfalls of 1.4 million hours for 10 equipment categories. Several factors contributed to the deficiencies in the core process. Current guidance does not address how DOD is to consolidate the services' results into a meaningful department wide assessment. Also, there were errors and inconsistencies in the services' core calculations, making the full extent of the shortfalls unclear, and DOD also did not have effective internal controls in place to identify and resolve these errors and deficiencies. Further, DOD's core process does not have an effective mechanism for ensuring that corrective actions are taken to resolve shortfalls for fielded systems. As a result of shortcomings in the core process, DOD does not know the extent to which the military depots will have the capability to repair weapon systems to support future military operations. Finally, since DOD is not required to provide Congress information on its core process, the results of the process are not readily and routinely visible for purposes of congressional oversight. DOD is not adequately preparing military depots to support future core requirements through its acquisition process. Specifically, for the new and modified systems included in our review, the department had neither identified nor established core capabilities for certain systems in a timely manner. DOD acquisition guidance requires that an analysis of core requirements for new and modified systems be conducted early in the acquisition phase (no later than Milestone B or no later than Milestone C if there is no Milestone B). However, GAO found that program offices managing 20 of 52 systems we reviewed did not identify core requirements by Milestone C. DOD is also not establishing core capabilities for new and modified systems in a timely manner--that is, within 4 years of the system's achieving its initial operational capability, as required under DOD guidance. Shortcomings in the acquisition process include (1) acquisition guidance provides little or no information on how to identify and plan for the establishment of core capability, (2) program acquisition strategies do not fully address core requirements, and (3) some program offices are not procuring technical data necessary to establish a core capability. As a result, DOD has little assurance that the department is preparing military depots to meet future national defense contingencies.
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-09-83, Depot Maintenance: Actions Needed to Identify and Establish Core Capability at Military Depots
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Report to the Subcommittee on Readiness, Committee on Armed Services,
House of Representatives:
United States Government Accountability Office:
GAO:
May 2009:
Depot Maintenance:
Actions Needed to Identify and Establish Core Capability at Military
Depots:
GAO-09-83:
GAO Highlights:
Highlights of GAO-09-83, a report to the Subcommittee on Readiness,
Committee on Armed Services, House of Representatives.
Why GAO Did This Study:
The Department of Defense (DOD) is required, by law, to maintain a core
logistics capability that is government owned and government operated
to meet contingency and other emergency requirements. Military depots
play a key role in maintaining this ’core capability,“ although in
recent years DOD has significantly increased its use of contractors. At
the subcommittee‘s request, GAO examined the extent to which (1) DOD
has accurately assessed whether it has the required core capabilities
in military depots and (2) DOD is preparing to support future core
requirements for new and modified systems. GAO reviewed DOD‘s biennial
process for determining core capability requirements and the associated
workloads for fielded systems. GAO also reviewed whether DOD had
identified and established core capability in a timely manner for new
and modified systems.
What GAO Found:
DOD, through its biennial core process, has not comprehensively and
accurately assessed whether it has the required core capability to
support fielded systems in military depots. Although DOD internally
reported that its maintenance workload of 92.7 million hours in 2007
was ’well over“ the minimum of 70.5 million hours needed to fulfill
core requirements at military depots and that the services were
complying with their core capability requirements, this assessment did
not show capability shortfalls identified by the services in their core
computations. GAO‘s analysis of the services‘ 2007 core capabilities
data determined that the Army, Navy, and Marine Corps had shortfalls
for some equipment categories or technologies. For example, the Army
identified core shortfalls of 1.4 million hours for 10 equipment
categories. Several factors contributed to the deficiencies in the core
process. Current guidance does not address how DOD is to consolidate
the services‘ results into a meaningful department wide assessment.
Also, there were errors and inconsistencies in the services‘ core
calculations, making the full extent of the shortfalls unclear, and DOD
also did not have effective internal controls in place to identify and
resolve these errors and deficiencies. Further, DOD‘s core process does
not have an effective mechanism for ensuring that corrective actions
are taken to resolve shortfalls for fielded systems. As a result of
shortcomings in the core process, DOD does not know the extent to which
the military depots will have the capability to repair weapon systems
to support future military operations. Finally, since DOD is not
required to provide Congress information on its core process, the
results of the process are not readily and routinely visible for
purposes of congressional oversight.
DOD is not adequately preparing military depots to support future core
requirements through its acquisition process. Specifically, for the new
and modified systems included in our review, the department had neither
identified nor established core capabilities for certain systems in a
timely manner. DOD acquisition guidance requires that an analysis of
core requirements for new and modified systems be conducted early in
the acquisition phase (no later than Milestone B or no later than
Milestone C if there is no Milestone B). However, GAO found that
program offices managing 20 of 52 systems we reviewed did not identify
core requirements by Milestone C. DOD is also not establishing core
capabilities for new and modified systems in a timely manner--that is,
within 4 years of the system‘s achieving its initial operational
capability, as required under DOD guidance. Shortcomings in the
acquisition process include (1) acquisition guidance provides little or
no information on how to identify and plan for the establishment of
core capability, (2) program acquisition strategies do not fully
address core requirements, and (3) some program offices are not
procuring technical data necessary to establish a core capability. As a
result, DOD has little assurance that the department is preparing
military depots to meet future national defense contingencies.
What GAO Recommends:
GAO is making eight recommendations to DOD to improve its core biennial
process to provide more comprehensive and accurate assessments, and to
improve the timely identification and establishment of core
capabilities for new and modified systems. DOD generally agreed with
GAO‘s recommendations. DOD partially concurred with a recommendation to
enhance reporting to Congress, and GAO replaced this recommendation
with a matter for congressional consideration.
View [hyperlink, http://www.gao.gov/products/GAO-09-83] or key
components. For more information, contact William M. Solis at (202) 512-
8365 or solisw@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
DOD Has Not Comprehensively and Accurately Assessed Whether It Has the
Required Core Capability to Support Fielded Systems:
DOD Has Neither Identified nor Established Core Capabilities in a
Timely Manner to Prepare Military Depots to Support Future Core
Requirements for Some New and Modified Systems:
Conclusions:
Recommendations for Executive Action:
Matter for Congressional Consideration:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Reported 2007 Core Requirements and Planned Workloads in
Direct Labor Hours:
Table 2: Equipment/Technology Categories with Identified Shortfalls in
Direct Labor Hours for 2007:
Table 3: Shortfalls in Core Capability Identified by the Air Force in
Direct Labor Hours for 2007:
Table 4: The Army's Core Capability Shortfalls in Direct Labor Hours
Identified in 2005 and 2007:
Table 5: Extent to Which Systems in Our Review with Identified Core
Requirements Have Maintenance and Repair Capabilities Established In
Military Depots:
Table 6: Explanations for Why 43 Systems Were Excluded from Our Review:
Figure:
Figure 1: Number of Systems Identified Where Program Offices Prepared
Core Logistics Analysis in Each Phase of the Acquisition Process:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
May 14, 2009:
The Honorable Solomon P. Ortiz:
Chairman:
The Honorable J. Randy Forbes:
Ranking Member:
Subcommittee on Readiness:
Committee on Armed Services:
House of Representatives:
The Department of Defense (DOD) maintains a multitude of complex weapon
systems including aircraft, ships, ground-based systems, missiles,
communications equipment, and other types of electronic equipment that
require regular and emergency maintenance to keep pace with national
security goals. This mix of weapon systems and their maintenance needs
is continually changing as new weapon systems replace older ones and
systems in the field are modified with newer and better technologies to
meet changing threats. To sustain all these systems, at the depot
level,[Footnote 1] the military uses a combination of private sector
contractors and military depots. Depots play a key role in maintaining
military systems and equipment in peacetime and during surge conditions
like those created by the ongoing conflicts in Iraq and Afghanistan.
However, in recent years DOD has significantly increased its use of
contractors to support military systems and equipment.
Recognizing the important role of military depots in supporting U.S.
forces and the risk of over-reliance on private contractors for vital
military needs, Congress in 1984 enacted legislation whereby certain
core logistics activities identified by the Secretary of Defense were
first exempted from being contracted out.[Footnote 2] The statute was
later codified at Section 2464 of Title 10, U.S. Code, and has been
amended several times since that date. The core logistics capability
statute[Footnote 3] states, in part:
"It is essential for the national defense that the Department of
Defense maintain a core logistics capability that is Government-owned
and Government-operated (including Government personnel and Government-
owned and Government-operated equipment and facilities) to ensure a
ready and controlled source of technical competence and resources
necessary to ensure effective and timely response to a mobilization,
national defense contingency situations, and other emergency
requirements."
Under the core statute, the Secretary of Defense is charged with
identifying the core logistics capabilities described in the statute,
as well as the workload required to maintain those capabilities. These
"core logistics capabilities" identified by the Secretary of Defense
must include those capabilities that are necessary to maintain and
repair the weapon systems and other military equipment[Footnote 4] that
are identified by the Secretary of Defense, in consultation with the
Chairman of the Joint Chiefs of Staff (JCS), as necessary to enable the
armed forces to fulfill the strategic and contingency plans prepared by
the Chairman, JCS.[Footnote 5] The statute also states that the
Secretary of Defense shall require the performance of core logistics
workloads necessary to maintain these identified core logistics
capabilities at government-owned, government-operated DOD facilities
(military depots) and assign these facilities sufficient workload to
ensure cost efficiency and technical competence in peacetime, while
preserving surge capacity and reconstitution capabilities necessary to
support fully the strategic and contingency plans referenced in the
statute. The statute further stipulates that core workloads needed to
maintain a logistics capability identified by the Secretary of Defense
may not be contracted to the private sector unless the Secretary of
Defense has executed a waiver. According to DOD officials, they have no
record of a waiver being requested.
DOD implements this statutory requirement to retain core capabilities
and workloads through a two-pronged process that includes the biennial
core capability determination process (for fielded systems) and the
acquisition process (for new systems and systems undergoing
modification). In the case of fielded systems, DOD has issued guidance
that outlines a biennial core determination process and provides a
computational methodology to identify essential DOD depot maintenance
core capability requirements for each DOD component, as well as the
workloads needed to sustain those capabilities.[Footnote 6] The core
determination process expresses core capability requirements and
planned workload in direct labor hours. DOD guidance also requires the
Deputy Under Secretary of Defense for Logistics and Materiel Readiness
to collect, review, and evaluate service submissions as applicable, and
compute the composite core capability requirements and associated
workloads for DOD. The results of the process are summarized in an
internal report that shows overall DOD core requirements and associated
workloads and are then submitted for approval to the Under Secretary of
Defense for Acquisition, Technology, and Logistics. For new systems and
systems undergoing modification, the identification of core
requirements is to occur during the acquisition process, and DOD has
established a time frame for performing a core analysis that is linked
with major acquisition milestones. Furthermore, DOD guidance requires
that for systems that are identified as necessary to fulfill core
requirements, DOD has the capability to maintain and repair these
systems at a military depot within 4 years of a system's initial
operational capability.
The House Armed Services Committee's Readiness Subcommittee requested
that we review whether DOD is identifying and establishing required
core capability for systems that are currently fielded as well as for
new and modified systems. In response to this request, we examined the
extent to which (1) DOD has accurately assessed whether it has the
required core capabilities in military depots to support fielded
systems and (2) DOD is preparing to support future core requirements
for new and modified systems in military depots.
To assess the core determination process for fielded systems, we
focused on the 2007 core process, which began in 2005. We reviewed the
military services' implementation of the core determination methodology
and compared the results of their process with the summary report
compiled by Office of the Secretary of Defense (OSD). We also discussed
the core determination process and our data analyses with OSD and
service officials. In reviewing the identification of core capability
for new and modified systems, we selected 52 program offices that had
completed a core analysis. We surveyed these program offices on how and
when they determined core capability requirements for their respective
weapon systems. Further, to determine whether core capability had been
established for new and modified systems as required under DOD
guidance, we identified systems that had completed the acquisition
process and were in operation between 1998 and 2003. We initially
selected 73 systems for this part of our review and ultimately focused
on 30 of these systems. For these systems we reviewed various program
documents, including source-of-repair decisions and maintenance plans,
and interviewed program officials about the characteristics of the
systems and maintenance sustainment. We assessed the reliability of the
data from the services' databases that we used to conduct our studies
and determined that the DOD data were sufficiently reliable for the
purposes of our analysis and findings. While the results of these
reviews cannot be generalized to all weapon systems in the acquisition
process, deficiencies in the way core capability is identified or
established for these systems indicate the existence of more widespread
problems. Further, we did not look at the larger question of whether
DOD fulfilled the warfighter's requirements as part of our review. We
conducted this performance audit from June 2007 through March 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives. A more detailed description
of our scope and methodology is included in appendix I.
Results in Brief:
DOD, through its core process, has not comprehensively and accurately
assessed whether it has the required core capability to support fielded
systems in military depots. Although DOD internally reported that it
had the overall required core capability to support its 2007 core
requirements, three of the four military services identified core
capability shortfalls within their respective service in specific
categories of equipment and technology. Core capability shortfalls, as
measured in direct labor hours, exist when planned workload is not
sufficient to meet core requirements. When shortfalls occur, DOD may
not have the necessary capability to repair weapon systems, which could
affect the readiness of troops that rely on these weapon systems that
support future military operations. DOD's internal report on the
results of the 2007 core process stated that the department's planned
maintenance workload of 92.7 million hours was "well over" the minimum
of 70.5 million hours needed to fulfill core requirements at military
depots and that the services were complying with their core capability
requirements.
While DOD's assessment showed that depots had more than enough core
capability workload in the aggregate to meet core requirements, it did
not discuss the specific capability shortfalls that had been identified
within three of the four services in their respective core
computations. OSD officials initially told us they were aware only of
the Marine Corps' shortfalls, but not the Army's and Navy's. However,
when we brought the results of our analysis to their attention, they
acknowledged that these two services also had identified shortfalls.
The officials noted, however, that shortfalls in specific equipment/
technology categories could be offset if one service had sufficient
depot repair capability to support the core requirements for another
service. However, since OSD officials were unaware that some services
had shortfalls at the time they assessed core capability, it is unknown
whether OSD could have made this offset determination. Our analysis of
the services' 2007 core capabilities data showed that the Army, Navy,
and Marine Corps had identified shortfalls for several equipment/
technology categories. Of these three services, the Army identified the
greatest core shortfalls--a total of 1.4 million direct labor hours
spread across 10 equipment/technology categories. We identified several
factors that contributed to deficiencies in the core process. Current
guidance does not address how DOD is to consolidate the service's
results into a meaningful departmentwide assessment. Also, there were
errors and inconsistencies in the services' core calculations, making
the full extent of the shortfalls unclear. For example, we found
problems in the way one or more of the services excluded certain JCS
scenario-tasked systems from their core calculations, excluded software
maintenance, and factored in private sector maintenance workloads. DOD
did not have effective internal controls to prevent these errors and
inconsistencies. In addition, the Air Force used a methodology for
calculating core capability shortfalls that differed from the
methodology used by the other services.
Although DOD core guidance provides instructions for determining core
requirements and associated workload, it does not specify how to
calculate shortfalls based on the worksheets developed by each service.
Further, DOD's core process lacked an effective mechanism for ensuring
that corrective actions were taken to resolve core capability
shortfalls for fielded systems. Some shortfalls in specific equipment/
technology categories persisted between 2005 and 2007. DOD subsequently
issued guidance that requires the services to develop mitigation plans
to address core capability shortfalls for 2009. However, this guidance
falls short of establishing an effective mechanism to ensure that
shortfalls are corrected. As a result of shortcomings in the core
process, DOD does not know the extent to which the military depots have
the required capability to provide an effective and timely response to
national defense contingencies and other emergency requirements.
Finally, because DOD is not required to provide Congress information on
its core process, the results of the core process are not readily and
routinely visible for purposes of congressional oversight.
With regard to new and modified systems, DOD is not adequately
preparing military depots to support future core requirements through
its acquisition process. More specifically, for many of the new and
modified systems included in our review, the department had neither
performed a core capability analysis nor established capabilities to
maintain and repair those systems in a timely manner. DOD acquisition
guidance requires that a core logistics analysis for new and modified
systems be conducted no later than Milestone B (the second major
decision point in the acquisition process), or no later than Milestone
C if there is no Milestone B for that system. However, for the systems
we reviewed, this analysis did not normally happen until later in the
acquisition cycle. Specifically we found that program offices managing
20 of the 52 systems we reviewed did not identify core requirements by
Milestone C. For example, a core analysis for the Army's Stryker Family
of Vehicles and the Air Force's Mobile Approach Control System were not
completed until after Milestone C, by which time the systems were
already in the production and deployment or operations and support
phases.
According to DOD officials, if core capability requirements for new and
modified systems have not been identified early in the acquisition
process, it is unlikely that core capability can be established at
military depots within 4 years of initial operational capability, as
required by DOD guidance. We found that DOD was not establishing
identified core capabilities for new and modified systems in a timely
manner--that is, within the 4-year time period. As one example, the
Navy's Air Launched Expendable-50 system, which provides an electronic
countermeasure method against anti-aircraft missile threats, reached
initial operational capability in 2002 and has been maintained by a
contractor because the Navy has not made the funds available to
establish the required depot capability by 2006. DOD has not adequately
addressed core requirements for new and modified systems because of
three shortcomings in the acquisition process. First, acquisition
guidance provides little to no information on how to identify and plan
for the establishment of core capability. Recognizing the importance of
early decision making to the establishment of core capability, since
2006 the Air Force has required program offices to conduct an initial
core assessment prior to the core analysis that is required by DOD
guidance. The intent of this requirement is to allow for an early
evaluation of the system's sustainment concept. This initial core
assessment appears to be a promising practice to support the timely
establishment of core capability. Second, program offices' acquisition
strategies do not fully address core requirements. Our review of
acquisition strategies for 11 major acquisition programs determined
that this key acquisition documentation only provided a statement of
the need to address core capability but did not provide a plan for how
to establish it. Third, some program offices did not procure technical
data necessary for the establishment of core capability. We have
identified the technical data issue in the past, and Section 802(a) of
the National Defense Authorization Act for Fiscal Year 2007 required
that DOD give greater consideration to long-term technical data needs,
but it is too soon to know what impact this will have on acquiring the
required data to establish core capability. As a result of the
deficiencies in the acquisition process regarding core capability, DOD
has little assurance that the services are preparing to provide
maintenance capabilities in their military depots to meet future
maintenance requirements for new and modified systems.
We are recommending that DOD modify its core determination process to
provide more comprehensive and accurate biennial assessments of core
capability for fielded systems and to correct identified shortfalls. We
are also making several recommendations to improve the timely
identification and establishment of core logistics capabilities for new
and modified systems. In its written comments on a draft of this
report, DOD generally concurred with our recommendations. DOD partially
concurred with a recommendation in our draft report that it provide
Congress visibility on the results of the core determination process.
The department stated that it plans to make the results of the core
determination process available on a DOD Web site. However, DOD was
opposed to generating reports to Congress which it has not requested.
As we state in the report, Congress does not have readily available and
routine visibility of the status of DOD's core capability, including
core requirements, associated workloads, and shortfalls, if any exist.
Therefore, we have replaced this recommendation with a matter for
congressional consideration.
Background:
Concept of Core Logistics Capability:
To ensure core capability is maintained, Congress enacted Section 2464
of Title 10, which requires, in part, that the Secretary of Defense
maintain a core logistics capability that is government owned,
government operated, and that uses government personnel, equipment, and
facilities. The authority and responsibility of the Secretary of
Defense under Section 2464 has been delegated to the Under Secretary of
Defense for Acquisition, Technology, and Logistics.[Footnote 7]
Statutory guidance and DOD's implementing guidance are aimed at
ensuring that repair capabilities will be available to meet the
military needs of the nation should an emergency or contingency arise
(i.e., surge situations). The concept of core capability helps guide
government policy on which activities DOD should perform at a military
depot and which activities the private sector could or should perform.
DOD's two-pronged approach in its implementation of the core statute
includes (1) the biennial core determination process for capturing and
reporting core capability requirements and associated planned workloads
for fielded systems and (2) the acquisition process for identifying and
establishing core capability for new systems and those undergoing
modifications. The following summarizes these processes.
Core Determination Process for Fielded Systems:
DOD's 2007 biennial core determination process began with a December
2005 tasking letter from the Deputy Under Secretary of Defense for
Logistics and Materiel Readiness to the services. The letter included
guidance on the process and required the services to provide proposed
depot maintenance core capability requirements and sustaining workloads
for fiscal year 2007. The 2005 guidance in the tasking letter generally
mirrored subsequent guidance issued in January 2007.[Footnote 8]
The DOD core determination process is comprised of a series of
mathematical computations and adjustments that are used to derive
required core capability requirements and the associated planned
workloads expected to be available to sustain those capabilities.
[Footnote 9] The computations involved in this methodology are
performed from the perspective of the service that owns the depot
maintenance assets and are divided into two parts. Part 1 identifies
the core capability requirements for DOD weapon systems. The services
identify applicable weapon systems based on the JCS contingency
scenarios. The JCS scenarios represent plans for responding to
conflicts that may occur in the future. All systems required to execute
the JCS scenarios are to be included in the core determination process
regardless of whether depot maintenance is actually performed in the
public or private sectors. The services exclude some systems for
several allowable reasons (i.e., special access programs) that are
documented citing the authority for each exclusion from the core
process.
After the applicable weapon systems are identified, the services
compute annual peacetime depot maintenance capability requirements in
direct labor hours to represent the amount of time it regularly takes
to perform required maintenance, and a number of adjustments to these
computations are then applied. Contingency requirements and resource
adjustments are made to account for applicable surge factors during the
different phases of a contingency (for example, preparation/readiness,
sustainment, and reconstitution). The objective is to determine the
most appropriate composite "surge" adjustment for a particular set of
circumstances. Further adjustments are made to account for redundancy
in depot capability. For example, a service may determine that repair
capabilities for specific systems maintained in military depots are so
similar that the capabilities for one system can effectively satisfy
the capability requirements for another. Core capability requirements
also are adjusted when one service's maintenance capability
requirements will be supported by other services. Throughout Part 1,
core capability data for individual systems are incorporated into
categories of equipment and technologies, which are also known as work
breakdown structure categories, and these categories are to be broken
down at a minimum, to the third level of indenture[Footnote 10] for
aircraft and components, the second level of indenture for aircraft
engines, and the first level of indenture for all other categories. For
example, the aircraft equipment category includes subcategories for
airframes, aircraft components, and aircraft engines, while the
airframes category is further divided by types of airframes and the
aircraft component category is subdivided into instruments, landing
gear, avionics/electronics, and other areas.
Part 2 of the biennial core process identifies the planned workloads
associated with sustaining the depot maintenance core capability
requirements identified in Part 1. In this part, after the amount of
depot maintenance workloads (in direct labor hours) that are needed to
sustain core capabilities are subtracted from funded public sector
depot maintenance workload in each equipment/technology category, the
difference could represent either an amount of workload that is not
needed to sustain core capability requirements or a shortfall amount.
[Footnote 11] This part establishes a minimum level of public sector
depot maintenance workloads within each service. Applicable information
on the results of each step in this process for Parts 1 and 2 are
recorded on the DOD depot maintenance core capability worksheets and
provided to OSD, which compiles the service data into a departmentwide
assessment that is summarized in an internal report.
Core Logistics Capability within DOD's Acquisition Process:
DOD uses the acquisition process to identify and establish core
capability requirements for new and modified systems. The department's
overarching acquisition guidance, DOD Directive 5000.01,[Footnote 12]
states that the program manager shall be the single point of
accountability for accomplishing program objectives for total life-
cycle systems management, including sustainment. DOD Instruction
5000.02,[Footnote 13] which provides additional DOD guidance for
managing and overseeing defense acquisition programs, requires that
program managers perform a core logistics analysis,[Footnote 14] as
part of the acquisition strategy, by the Milestone B acquisition
decision point or by Milestone C, if there is no Milestone B. Milestone
B is the second major decision point in the acquisition process and
comes after the technology development phase. Milestone C, the third
major decision point, comes after the system development and production
phase. The core logistics analysis identifies whether the capability to
maintain and repair a weapon system is necessary to support core
requirements and whether the capability should be established at a
military depot. Furthermore, according to DOD Directive 4151.18,
[Footnote 15] capabilities to support identified depot maintenance core
requirements shall be established not later than 4 years after the
system's initial operational capability.[Footnote 16] The program
manager uses DOD's acquisition management framework that is intended to
translate mission needs and requirements into systems acquisition
programs. The program manager develops an acquisition strategy that
details how the program's goals and objectives will be met. The
acquisition strategy also serves as a "road map" for program execution
from program initiation through post-production support. As part of the
acquisition strategy, the core analysis is supposed to identify whether
a weapon system will satisfy core logistics requirements.
Prior GAO Work on Core Logistics Capabilities:
In 2001, we reported that DOD lacked assurance that core logistics
capabilities were being maintained as needed to ensure timely and
effective response to national defense emergencies and contingencies,
as required by Section 2464 of Title 10, noting that several factors
precluded this assurance.[Footnote 17] DOD's core policy, which
established a process for identifying core maintenance capability, was
not comprehensive in that it did not provide a forward look at new
weapon systems and associated future maintenance capability
requirements. In addition, we also reported that DOD has had other
limitations, including a lack of sufficient investment in facilities,
equipment, and human capital to ensure the long-term viability of the
military depots.
DOD Has Not Comprehensively and Accurately Assessed Whether It Has the
Required Core Capability to Support Fielded Systems:
DOD, through its core process, has not comprehensively and accurately
assessed whether it has the required core capability to support fielded
systems in military depots. Although DOD generally followed its own
guidance for conducting the 2007 biennial core assessment, we found
that (1) DOD's method of compiling and internally reporting core
requirements and associated workloads for the 2007 core process did not
reveal shortfalls that the services had identified for specific
equipment/technology categories, (2) the services had errors and
inconsistencies in their identification of core requirements and
associated workloads, and (3) there was no mechanism for ensuring that
the services take corrective actions to resolve capability shortfalls.
As a result of these deficiencies, DOD lacks assurance that it has the
required capabilities to support its core requirements. Finally, DOD is
not required to provide Congress information on its core process, and
therefore the results of the core process are not readily and routinely
visible for purposes of congressional oversight.
DOD's Method of Compiling and Internally Reporting Core Requirements
and Associated Workloads Did Not Reveal Specific Shortfalls:
The method by which DOD compiled and internally reported its 2007 core
requirements and associated workloads did not reveal core capability
shortfalls, even though the services, in their core computations, had
identified shortfalls in specific equipment/technology categories. For
example, the Army and the Navy identified workload shortfalls to
support avionics and electronics components--a shortfall of 238,090
labor hours in the Army and 78,974 hours in the Navy. However, DOD did
not disclose this and other specific shortfalls because it aggregated
the results of the core determination process in its internal reporting
on core capability. As a result, DOD did not present a comprehensive
and accurate assessment of the services' 2007 core capability. Core
capability shortfalls exist when the military depots do not possess the
combination of skilled personnel, facilities, equipment, processes, and
technology that are needed to perform a particular category of work
(e.g., composite repair) and that are necessary to maintain and repair
the weapon systems and other military equipment needed to fulfill
strategic and contingency plans. When shortfalls occur, DOD may not
have the necessary capability to repair weapon systems, which could
affect the readiness of troops that rely on these weapon systems that
support future military operations.
According to an internal memorandum summarizing the results of the core
process for the Under Secretary of Defense for Acquisition, Technology,
and Logistics, DOD determined that projected workload in military
depots was adequate to support core capability requirements.[Footnote
18] The memorandum stated, "The Services are complying with their core
capability requirements as they meet wartime needs. Their projected
organic workloads in military depots are adequate to support core
capability requirements." More specifically, the memorandum stated that
the department's planned maintenance workload of 92.7 million hours was
"well over" the minimum of 70.5 million hours needed to fulfill core
requirements at military depots. The memorandum further reported that
the Marine Corps, alone among the four services, had planned workload
in military depots that was less than its core requirement due to
funding constraints, although it added that depot capacity was
available to meet the core requirement. According to the memorandum,
using fiscal year 2007 funding requested for expenses associated with
the Global War on Terrorism,[Footnote 19] the Marine Corps should be
able to meet its core requirement. The memorandum recommended that the
Under Secretary approve the DOD identification of core logistics
capabilities, and the approval was subsequently given. Table 1 shows
the total core capability requirements and planned workloads, by
service, as summarized in the internal DOD memorandum.
Table 1: Reported 2007 Core Requirements and Planned Workloads in
Direct Labor Hours:
Military service: Army;
Core requirement: 15.5;
Planned workload in military depots: 19.2.
Military service: Navy;
Core requirement: 33.6;
Planned workload in military depots: 48.5.
Military service: Marines;
Core requirement: 1.5;
Planned workload in military depots: 1.3.
Military service: Air Force;
Core requirement: 19.9;
Planned workload in military depots: 23.7.
Military service: Total;
Core requirement: 70.5;
Planned workload in military depots: 92.7.
Source: DOD.
[End of table]
To derive its assessment of core capability, DOD compiled and reported
aggregated totals of the services' core requirements and associated
workloads. DOD core determination guidance does not specify how to
identify departmentwide core requirements and workload. However, DOD's
method of computing aggregated totals had the effect of masking
workload shortfalls that the services had identified in specific
equipment/technology categories. The services, in their respective core
computations, identified planned workload shortfalls in a total of 18
equipment/technology categories. The Army identified the greatest
shortfall in core capability workload, identifying a total shortfall of
1.4 million direct labor hours across 10 equipment/technology
categories. The Marine Corps had shortfalls in 7 categories and the
Navy in 6. However, the combined Marine Corps and Navy shortfall was
only about 35 percent of the Army's. Table 2 shows the 18 equipment/
technology categories for which the services identified shortfalls in
planned workload to meet core requirements.
Table 2: Equipment/Technology Categories with Identified Shortfalls in
Direct Labor Hours for 2007:
Equipment/technology category: Aircraft: Dynamic components;
Army: [Empty];
Navy: (38,614);
Marine Corps: [Empty].
Equipment/technology category: Aircraft: Instruments;
Army: [Empty];
Navy: (17,567);
Marine Corps: [Empty].
Equipment/technology category: Aircraft: Landing gear;
Army: [Empty];
Navy: (25,029);
Marine Corps: [Empty].
Equipment/technology category: Aircraft: Aviation ordnance;
Army: [Empty];
Navy: (58,544);
Marine Corps: [Empty].
Equipment/technology category: Aircraft: Avionics/electronics;
Army: (238,090);
Navy: (78,974);
Marine Corps: [Empty].
Equipment/technology category: Ground vehicles: Tactical (wheeled)
vehicles;
Army: [Empty];
Navy: [Empty];
Marine Corps: (41,170).
Equipment/technology category: Sea ships: Surface combatants/others;
Army: [Empty];
Navy: (69,978);
Marine Corps: [Empty].
Equipment/technology category: Communication/electronic equipment:
Radar total;
Army: [Empty];
Navy: [Empty];
Marine Corps: (11,752).
Equipment/technology category: Communication/electronic equipment:
Radio total;
Army: (92,097);
Navy: [Empty];
Marine Corps: (7,280).
Equipment/technology category: Communication/electronic equipment: Wire
total;
Army: (125,760);
Navy: [Empty];
Marine Corps: [Empty].
Equipment/technology category: Communication/electronic equipment:
Electro-optics/night vision;
Army: (280,040);
Navy: [Empty];
Marine Corps: [Empty].
Equipment/technology category: Communication/electronic equipment:
Other total;
Army: (21,396);
Navy: [Empty];
Marine Corps: (325).
Equipment/technology category: Support equipment: General support
equipment;
Army: (429,271);
Navy: [Empty];
Marine Corps: (5,597).
Equipment/technology category: Support equipment: Generators;
Army: (120,375);
Navy: [Empty];
Marine Corps: (5,269).
Equipment/technology category: Support equipment: Test, measurement,
and diagnostic equipment;
Army: (61,912);
Navy: [Empty];
Marine Corps: [Empty].
Equipment/technology category: Support equipment: Other;
Army: (47,402);
Navy: [Empty];
Marine Corps: [Empty].
Equipment/technology category: Ordnance, weapons, and missiles:
Conventional weapons;
Army: [Empty];
Navy: [Empty];
Marine Corps: (133,143).
Equipment/technology category: Fleet/field support;
Army: (6,332);
Navy: [Empty];
Marine Corps: [Empty].
Total;
Army: (1,422,675);
Navy: (288,706);
Marine Corps: (204,536).
Sources: GAO analysis of DOD data.
Note: The data shows total public-sector-funded workload hours minus
core capability requirement hours. Numbers in parentheses indicate a
shortfall.
[End of table]
As shown in table 2, one area of significant shortfall in 2007 was in
workload for Navy aircraft components. For example, the Navy had
shortfalls of 218,728 hours in workload for dynamic components,
instruments, landing gear, aviation ordnance, and avionics/electronics.
In a Naval Air Systems Command briefing discussing the results of the
2007 core results, several reasons were identified for some shortfalls.
For example, according to the Command, the Navy had designated 10
percent of the items in the component database for repair in a military
depot, but these items had been repaired by contractors because a depot
repair capability was not established. Additionally, in some cases
where a military depot had established repair capability, sustaining
workloads were still going to the private sector, according to Naval
Air Systems Command officials.
When we initially met with OSD officials responsible for developing
DOD's 2007 core assessment, the officials told us they were aware only
of the Marine Corps' shortfalls, but not the Army's and Navy's.
However, when we brought the results of our analysis to their
attention, they acknowledged that these two services had also
identified shortfalls. The officials noted, however, that under OSD's
methodology for aggregating the services' core data, shortfalls in
specific equipment/technology categories could be offset if one service
had sufficient depot repair capability to support the core requirements
for another service. For example, the Marine Corps had a shortfall in
capability to repair tactical wheeled vehicles while the Army had more
workload in this equipment/technology category than it needed to
support its core requirements. However, since OSD officials, at the
time they made this assessment, were unaware that some services had
shortfalls, it is unknown to what extent OSD could have made this
offset determination.
We applied OSD methodology for offsetting shortfalls in the same
equipment/technology categories across services to identify the
potential workload shortages that could be offset under these
circumstances. The result of applying this methodology was that DOD's
2007 core shortfall could be reduced by approximately 600,000 hours.
However, this still leaves a net shortfall of more than 1.3 million
hours. Furthermore, it is unclear that workload could be transferred
cross-service as this analysis might indicate. On the basis of our
discussions with DOD officials, we found that while the skill sets for
repairing equipment may be the same or similar, particularly for
repairing less complex equipment such as tactical wheeled vehicles, the
ability to offset shortages in one service with excess capacity in
another would depend on the two services having the same systems or
systems so similar that repair capability in one service could support
the other service's equipment. Skilled labor capable of working on
equipment from a given equipment/technology category may be able to
repair similar equipment from another service if the workers have the
required technical data, depot plant equipment is available, and the
workers have received necessary training. However, technical data and,
to some extent, depot plant equipment, are generally specific to a
weapon system. Thus, without knowing the extent to which the excess
workload from one service would represent maintenance that could be
performed by another service with a shortfall of work, cross-service
analyses of workload within the same equipment/technology category
would not be meaningful.
DOD's Core Process Resulted in Errors and Inconsistencies in the
Services' Identification of Core Requirements and Associated Workloads:
During our review, we found some errors and inconsistencies in the
services' implementation of the biennial core determination process.
Moreover, DOD did not have effective internal controls to prevent these
errors and deficiencies in the core process.
First, most of the services did not accurately identify weapon systems
required to support the 2007 core requirements. According to DOD's core
guidance, the starting point for calculating core requirements is to
identify weapon systems and equipment that are included in the JCS
contingency scenarios. The guidance states that when beginning to
compute core requirements, the services should consider all scenario-
tasked weapon systems that require depot maintenance, regardless of
whether maintenance for particular systems is currently being
accomplished in the public or private sector. The Marine Corps excluded
some JCS-tasked systems, such as the Medium Tactical Vehicle
Replacement system, from its core computation. Although systems
repaired both in the public and private sectors should have been
included in its core computation, Marine Corps officials stated that
they did not include systems unless they had been previously repaired
in military depots. Thus, they erroneously excluded some JCS systems
from the starting point for calculating core requirements. The Marine
Corps official who performed the analysis said he asked for guidance
from Marine Corps Headquarters on what systems should be included, but
did not get a list of systems. In addition, according to a May 2007
Army Audit Agency report,[Footnote 20] Army officials were unable to
verify that all JCS-tasked systems were included in the service's core
reviews. Army officials said that they relied heavily on the program
executive office to conduct accurate and thorough reviews, but could
not prove that all weapon systems were assessed during the review.
Because the Army could not show whether all systems were included in
the biennial core process, the Army lacks the assurance that core
capabilities were identified for all required weapon systems.
Second, we found that the Navy and the Marine Corps omitted software
maintenance workloads from their 2007 biennial core requirements
computations, while the Army and the Air Force included software
maintenance in their core computations. The Naval Air Systems Command's
rationale for not including software maintenance in its calculation was
that the Navy does not consider software maintenance as maintenance in
the usual sense of returning an item back to its original condition.
[Footnote 21] Also, the Navy does not perform software maintenance in
facilities that are traditionally considered depots. Nonetheless,
cognizant OSD officials told us that because DOD's biennial core
guidance defines depot maintenance to include all aspects of software
maintenance,[Footnote 22] the Navy and Marine Corps should be including
software maintenance in their core analysis inputs. Given the services'
differing methodologies in computing their respective core
requirements, DOD cannot logically compute the composite core
capability requirements for the department as a whole, as required by
its guidance. Most importantly, DOD increasingly relies on software to
introduce or enhance performance of weapon systems, and making software
adjustments is increasingly a key component of maintaining systems to
prepare for emergency conditions. Thus, it is important to
comprehensively identify the software core maintenance requirements.
Third, the Air Force, as a part of its adjustment for redundant or
duplicate capability, reduced its requirements because of private
sector maintenance workload. Duplicate or redundant capabilities occur
when multiple systems are similar and share a common or complementary
base of repair processes, technologies, and capabilities, or when a
large quantity of single platform requirements necessitate duplicate
capabilities. DOD core guidance requires that as a part of the core
assessment, the services adjust for duplicate maintenance work.
According to DOD officials, the intent of this provision in the
guidance was that redundant capability should only consider DOD depot
workload--not private sector workload. However, the Air Force
considered private sector workload in making these adjustments. For
example, for most airframes, engines, and other major end items, the
Air Force reduced its workload based on private sector workload.
According to Air Force officials, they included private sector workload
in the redundancy adjustment because they believed they had flexibility
to include both public and private sector workloads. Cognizant OSD
officials said they were unaware of the Air Force approach of including
private sector workload. When we informed them of the Air Force's
practice, they agreed that this adjustment was not appropriate. They
noted that since the purpose of the core capability requirements
determination process is to identify public sector depot maintenance
capability, reducing the depot maintenance direct labor hours because
of workload that exists in the private sector is not what was intended
by DOD core guidance.
By including private sector capability in its redundancy adjustment,
the Air Force is misstating its workload and limiting its flexibility
to support critical systems using military depot capability. The Air
Force was the only service that did not identify shortfalls using the
same methodology as the other services. However, if they had not used
private sector capability to adjust for redundancy, it is likely that
some categories would have had shortfalls. For example, at least 10
equipment categories had core requirements equal to the planned core
workloads assigned. Thus, adding back in the private sector adjustment
that the Air Force made would mathematically result in a shortfall.
Fourth, as noted above, the Air Force used a methodology for
calculating core capability shortfalls that differed from the
methodology used by the other services. Although DOD core guidance
provides instructions for determining core requirements and associated
workload, it does not specify how to calculate shortfalls based on the
worksheets developed by each service. In our discussions with service
and OSD officials, they agreed that the correct method is to subtract
core requirements from planned workload. If the difference is a
negative number, that would indicate a core shortfall. The Army, Navy,
and Marine Corps all used this method in calculating the results of the
core determination process, and we also applied this method in
calculating shortfalls in specific equipment/technology categories.
However, the Air Force used a different method of calculating
shortfalls, which showed shortfalls in specific equipment/technology
categories that did not materialize using the other services'
methodology. For example, unlike the other services, the Air Force
adjusted its core requirements before computing shortfalls. According
to Air Force officials, this method has been a long-standing practice
within the Air Force. To compound this inconsistency between the Air
Force and the other services, OSD's internal memorandum, which
summarized core results across the department, reported adjusted core
requirements for the Air Force of 19.9 million direct labor hours,
based on the Air Force's methodology. If OSD had reported the Air
Force's total core requirements using the same methodology as the other
services, the Air Force's total core requirement would have been 18.7
million direct hours. Table 3 shows shortfalls the Air Force identified
for 2007 using its methodology.
Table 3: Shortfalls in Core Capability Identified by the Air Force in
Direct Labor Hours for 2007:
Equipment/technology category: Airframes: Composite;
Shortfall: 34,000.
Equipment/technology category: Tanker/transport;
Shortfall: 100,000.
Equipment/technology category: Subtotal;
Shortfall: 134,000.
Equipment/technology category: Software: Operational flight program;
Shortfall: 170,000.
Equipment/technology category: Subtotal;
Shortfall: 170,000.
Equipment/technology category: Components: Hydraulic components;
Shortfall: 150,000.
Equipment/technology category: Components: Airborne electronics;
Shortfall: 650,000.
Equipment/technology category: Components: Instruments;
Shortfall: 600,000.
Equipment/technology category: Subtotal;
Shortfall: 1,400,000.
Equipment/technology category: Total;
Shortfall: 1,704,000.
Source: U.S. Air Force Headquarters.
[End of table]
As shown in table 3, the analysis identified core capability shortfalls
for airframes, software, and components, with the component shortfall
representing 82 percent of the total. The Air Force, in presenting
these shortfalls, also considered depot maintenance workload for new
and emerging systems that could mitigate shortfalls. For instance, the
Air Force cited requirements for the F-22A, Joint Strike Fighter, and
CV-22 aircraft and the Predator and Global Hawk unmanned systems.
DOD's Core Process Lacks a Mechanism for Ensuring That the Services
Take Action to Resolve Core Capability Shortfalls for Fielded Systems:
DOD's core process lacks a mechanism for ensuring that corrective
actions are taken to resolve core capability shortfalls for fielded
systems. At the time the services prepared their 2007 biennial core
calculations, the services were not required to and therefore did not
develop plans to specifically address capability shortfalls at the
equipment/technology category level for fielded systems. Further, some
Army officials told us that the core process is an exercise in futility
in that the services are required to conduct the core analysis, but
nothing comes out of it to address shortfalls. Thus, the services
compute their biennial requirements, workload, and shortfalls, as
required by DOD's core guidance, but the results are put on the shelf
and little is done until the next biennial process. As shown in table
4, our analysis of the Army's biennial core data found that shortfalls
for some equipment/technology categories substantially increased from
2005 to 2007, while shortfalls in other categories were eliminated.
Table 4: The Army's Core Capability Shortfalls in Direct Labor Hours
Identified in 2005 and 2007:
Equipment/technology category: Avionics/electronics (shaded);
FY 05: 0;
FY 07: 238,090.
Equipment/technology category: Aircraft components;
FY 05: 20,422;
FY 07: 0.
Equipment/technology category: Combat vehicles;
FY 05: 104,805;
FY 07: 0.
Equipment/technology category: Tactical wheeled vehicles;
FY 05: 47,591;
FY 07: 0.
Equipment/technology category: Communications/electronics (shaded);
FY 05: 357,195;
FY 07: 519,293.
Equipment/technology category: Support equipment (shaded);
FY 05: 345,861;
FY 07: 658,960.
Equipment/technology category: Tactical missiles;
FY 05: 9,935;
FY 07: 0.
Equipment/technology category: Fabrication/manufacturing;
FY 05: 70,926;
FY 07: 0.
Equipment/technology category: Fleet/field support (shaded);
FY 05: 914;
FY 07: 6,332.
Equipment/technology category: Other;
FY 05: 18,258;
FY 07: 0.
Equipment/technology category: Total;
FY 05: 975,907;
FY 07: 1,422,675.
Sources: GAO analysis of DOD data.
Note: Shaded rows show categories where shortfalls increased between
2005 and 2007.
[End of table]
Unlike the core guidance that was in effect for the 2007 core process,
the guidance for the ongoing 2009 core process requires the services to
include in their biennial reports plans to rectify capability
shortfalls (if any), including a description of planned capital
investment, timing, and planned workarounds until new capability is
available. Although the new guidance is a step in the right direction,
it falls short of establishing an effective mechanism to ensure that
shortfalls are corrected. Further, the new guidance does not require
that mitigation plans address shortfalls at the equipment/technology
category level. Finally, since the core computations occur every 2
years, DOD would not know whether progress was being made in the
interim period.
Congress Lacks Visibility of DOD's Core Process:
Because there is no requirement to do so, DOD does not provide Congress
information on the results of the biennial core determination process
for fielded systems. Thus, Congress does not have readily available and
routine visibility of core capability requirements, associated
workloads, and shortfalls, if any exist. As a result, Congress is not
in the best position to make oversight decisions, and DOD is not held
accountable regarding the extent to which the military possesses the
core logistics capabilities specified in Section 2464 of Title 10, U.S.
Code.
Conversely, DOD is required to report annually to Congress the
percentage of depot-level maintenance and repair dollars spent in the
public and private sectors---also known as the 50/50 reporting
requirement. Under Section 2466(a) of Title 10, not more than 50
percent of funds made available in a fiscal year to a military
department or defense agency for depot-level maintenance and repair may
be used to contract for the performance by nonfederal government
personnel of such workload for the military departments and agencies.
Further, the Secretary of Defense must submit an annual report to
Congress showing the percentages of funds expended for public and
private depot maintenance.[Footnote 23] Although we and some service
audit agencies have cited shortcomings, service officials told us that
the 50/50 reporting process has influenced the services to consider
shifting maintenance work to military depots to improve their 50/50
posture. For example, because of the visibility associated with a
breach in the 50/50 reporting requirement, DOD has required the
services to prepare a get-well plan when they come within 2 percent of
the 50 percent private sector depot maintenance funding ceiling. As a
result, we previously reported that the visibility of the 50/50
reporting requirement helps to ensure that the percentage maximum is
not exceeded. In contrast, there are no external reporting requirements
associated with Section 2464 of Title 10.
DOD Has Neither Identified nor Established Core Capabilities in a
Timely Manner to Prepare Military Depots to Support Future Core
Requirements for Some New and Modified Systems:
DOD has neither identified nor established core capabilities in a
timely manner to prepare military depots to support future core
requirements for some new and modified systems included in our review.
As older systems phase out of the inventory and new or modified systems
phase in, it is essential that the acquisition process ensures that
program offices take the actions necessary to establish core depot
maintenance capability in military depots. Two key actions that must
occur are, first, the identification of any core depot maintenance
capability requirements associated with the new system and, second, if
there are no existing organic capabilities, the establishment of depot
maintenance capabilities through the acquisition of all resources
necessary to achieve those capabilities. Our review of the acquisition
process demonstrated that program offices are not taking these actions
in a timely manner. We identified shortcomings in the acquisition
process that contributed to the lack of timely identification and
establishment of core capabilities.
DOD Did Not Identify Core Capabilities in a Timely Manner for Some New
and Modified Systems in the Acquisition Process:
DOD did not identify core capabilities for some new and modified
systems in the acquisition process in a timely manner. Although DOD
acquisition guidance requires that core logistics capabilities be
identified no later than Milestone B, or by Milestone C if there is no
Milestone B, the identification of core requirements did not normally
occur until later for most of the systems we reviewed. Specifically,
for 20 of the 52 systems we reviewed, core capability was not
identified until either the production and deployment or operations and
support phases of the acquisition process (after Milestone C), which
could be years after the identification was supposed to occur. For
example, a core analysis for the Army's Stryker Family of Vehicles and
the Air Force's Mobile Approach Control System were not completed until
after Milestone C, by which time the systems were already in the
production and deployment or sustainment phases. Our analysis also
identified additional systems that should have had a core analysis
completed by Milestone B, but for which analyses were not completed
until Milestone C. Figure 1 shows the number of systems from our non-
probability sample of 52 systems for which a core logistics analysis
was prepared in each phase of the acquisition process.
Figure 1: Number of Systems Identified Where Program Offices Prepared
Core Logistics Analysis in Each Phase of the Acquisition Process:
[Refer to PDF for image: illustration]
Concept refinement phase:
Number of weapons systems where a core logistics analysis was
prepared: 1.
Milestone A.
Technology development phase:
Number of weapons systems where a core logistics analysis was
prepared: 3.
Milestone B.
System development and demonstration phase:
Number of weapons systems where a core logistics analysis was
prepared: 28.
Milestone C.
Production and deployment phase:
Number of weapons systems where a core logistics analysis was
prepared: 15.
Operations and support phase:
Number of weapons systems where a core logistics analysis was
prepared: 5.
Notes: Decision milestones A, B, and C are reached at the end of their
respective acquisition phases. In December 2008, the concept refinement
phase was renamed the materiel solution analysis phase, and the system
development and demonstration phase was renamed the engineering and
manufacturing development phase.
[End of figure]
The U.S. Army Audit Agency's 2007 report identified similar delays in
the identification of core capability for some Army weapon systems that
had achieved initial operational capability but had not been subjected
to the core capabilities analyses required by Army and DOD guidance.
[Footnote 24] These systems included the Secure Mobile Anti-Jam
Reliable Tactical Terminal (December 1999 initial operational
capability), the Advanced Field Artillery Tactical Data System (fiscal
year 1996 initial operational capability), and the Bradley Fighting
Vehicle System A3 Upgrades (fiscal year 2001 initial operational
capability). The Army Audit Agency report also stated that Army
officials who did not perform the required analyses may not be assured
that they made the best decisions for the Army regarding the use of
organic or contractor support.
According to DOD officials and based on the results of our analyses, if
core capability requirements for new and modified systems have not been
identified early in the acquisition process, and if there is no
existing DOD capability for a particular system, it is unlikely that
core capability can be established at military depots within 4 years of
initial operational capability, as required by DOD guidance. Also,
delays in making maintenance decisions can significantly limit DOD's
sustainment concept options because as programs progress in the
acquisition timeline, program decisions already made--such as not
making provisions for the acquisition of technical data (or access to
it), depot plant equipment, and other resources required to establish
military depot maintenance capability--may limit the practicability of
being able to establish core capability in a military depot.
DOD Is Not Establishing Required Core Capabilities for Some New and
Modified Systems in a Timely Manner:
In addition to not identifying core capability requirements in a timely
manner for new and modified systems in the acquisition process, program
offices are also not taking the actions that are needed to establish
required core capabilities in a timely manner. Although DOD Directive
4151.18 states that the capabilities to support identified depot
maintenance core requirements shall be established not later than 4
years after initial operational capability for DOD materiel directly
supporting the department's strategic and contingency plans, this is
not always occurring. Specifically, 24 of the 30 programs we reviewed
with identified core requirements either had not established any core
capability or had achieved only a partial core capability within 4
years of their initial operational capability.[Footnote 25] Table 5
summarizes our analysis of the 30 systems in our review.
Table 5: Extent to Which Systems in Our Review with Identified Core
Requirements Have Maintenance and Repair Capabilities Established In
Military Depots:
Status of establishment of core capability: Core capability not
established;
Number of systems: 11.
Status of establishment of core capability: Partial capability
established through performance-based logistics arrangements or public-
private partnerships;
Number of systems: 13.
Status of establishment of core capability: Required capability
established;
Number of systems: 6.
Status of establishment of core capability: Total systems in our
review;
Number of systems: 30.
Sources: GAO analysis of DOD data.
[End of table]
According to program officials, 6 of the 30 systems we reviewed were
fielded and had required core capability established in military
depots. For 11 of the 30 programs we reviewed, however, DOD had not
established any of the required core capability to maintain and repair
the systems. Another 13 of the programs had established some but not
all core capability through either performance-based logistics
arrangements (11 programs) or public-private partnerships (2 programs)
with contractors. According to DOD officials, these arrangements and
partnerships with contractors were intended to support the core
workload.
Some Programs Had Not Established Any Core Capability within Required
Time Frames:
The following discussion illustrates cases among the 11 programs in our
review where the required core capabilities were identified, but had
not been established in the military depot system within 4 years of
initial operational capability as required by DOD guidance.
* The Navy's Air Launched Expendable-50 (ALE-50) System, which provides
an electronic countermeasure method against anti-aircraft missile
threats, reached initial operational capability in 2002. However, no
core capability to maintain and repair this system exists in a military
depot, even though it should have been established by 2006. The Navy
determined that the ALE-50 had core requirements, and the Navy and the
Joint Depot Maintenance Activities Group [Footnote 26] agreed that
organic capability should be established at Naval Aviation Depot,
Jacksonville, Florida--now known as Fleet Readiness Center Southeast,
Jacksonville.[Footnote 27] Interim commercial support was established
until the organic capability could be established. Currently, the
Jacksonville depot has only the capability to troubleshoot and to make
limited repairs to certain components. However, the contractor performs
most depot maintenance on this system. According to Navy and program
officials, while the Naval Air Systems Command has requested funds to
establish core capability, funds from the Office of the Chief of Naval
Operations have not been made available to stand-up the required depot
capability. Thus, 7 years after the system reached initial operational
capability, the depot still does not have full capability to repair the
ALE-50.
* The Navy's Mission Computer Upgrade, which reached initial
operational capability in 2002, is the primary computing device on the
E-2C aircraft. The electrical cabinet component of this unit which was
designated as core is used to house the computer's circuit cards. This
unit provides digital data signal interface and power to the circuit
card assemblies and routes all external sensor and operator control
inputs to the applicable circuit card assemblies. Eleven depot-level
repairable items on the computer have core requirements and, therefore,
a capability to maintain and repair these items should exist in
military depots. Currently, no DOD depot has the capability to maintain
and repair the mission computer cabinet. Although the program office
has identified and requested the funding that would be required to
purchase technical data and depot plant equipment needed to establish
this capability, the funding from the Office of the Chief of Naval
Operations has never been made available. Thus, the candidate repair
depot--Fleet Readiness Center Southwest, North Island--did not have
repair capability 7 years after initial operational capability, and the
original equipment manufacturer is still repairing the equipment.
* The Navy's Advanced Tactical Air Reconnaissance System (ATARS), which
reached initial operational capability in 2000, is a reconnaissance
avionics subsystem consisting of a sensor suite providing image
acquisition, data storage, image manipulation, and reconnaissance
system control functions. Reconnaissance system control functions
include the capability to record radar sensor data and control a data-
link subsystem for real-time and near-real-time transmission. Although
ATARS was determined to have core requirements, program officials
indicated that the manufacturer was determined to be the only cost-
effective source of repair due to the limited number of systems and the
unique tools needed for the complex repairs. Thus, funding to establish
core capabilities for ATARS has been requested by the program
officials; however, funds from the Office of the Chief of Naval
Operations have not been made available 9 years after initial
operational capability. While ATARS was fielded before DOD issued its
guidance requiring core capability to be established within 4 years of
initial operational capability, the guidance does not exempt systems
that were already fielded or those where establishing capability is
costly.
Some Programs Managed under a Performance-Based Logistics Arrangement
or Public-Private Partnership Did Not Have All Core Capability
Established within Required Time Frames:
The following discussion illustrates cases among the 13 programs we
reviewed where a partial, but not full, core capability had been
established in the military depot system through the implementation of
performance-based logistics arrangements or public-private
partnerships. Performance-based logistics involve the purchase of
performance outcomes (such as the availability of functioning weapon
systems) through long-term contractor support arrangements rather than
the purchase of individual elements of support, such as parts, repairs,
and engineering support.[Footnote 28] Public-private partnerships for
depot-level maintenance are cooperative arrangements between a depot-
level maintenance activity and one or more private sector entities to
perform DOD or defense-related work, to utilize DOD depot facilities
and equipment, or both.[Footnote 29]
* The Air Force's Large Infrared Countermeasure (LAIRCM) System, which
reached initial operational capability in 2004, provides fast and
accurate threat detection, processing, tracking, and countermeasures to
defeat current and future generation infrared missile threats. The
LAIRCM has been maintained by the manufacturer because the Air Force
did not acquire the technical data or depot plant equipment needed to
support establishing a core capability at the depot. According to
program officials, these resources were not a high enough program
priority to be funded. The Air Force and Joint Depot Maintenance
Activities Group agreed that organic capability should be established
at the Warner Robins Air Logistics Center through a public-private
partnership, but currently, there is no work being performed at the
depot. According to program officials, the depot will receive some
workload in 2009 and is expected to be fully capable of maintaining the
system in 2010, but it is unclear whether this milestone will be
achieved.
* The Army's AN/MPQ-64 Sentinel Radar System achieved initial
operational capability in 1997. While the Sentinel's core depot
assessment, completed in May 2004, determined the system to have core
requirements, currently core capability has been established for only
11 of the 29 depot-level reparables, and these are the components that
are common to the Firefinder radar system, the precursor to the
Sentinel. By the third quarter of fiscal year 2009, core capability
will be established to repair two additional depot-level reparable
items, thus increasing the reparable capability to 13 depot-level
items. The Sentinel is supported with a performance-based logistics
arrangement with Thales Raytheon Corporation, which was supposed to
partner with the Tobyhanna Army Depot to provide the capability to
achieve core capability. Additionally, the Tobyhanna Army Depot does
not have full capability to test either the original Sentinel system or
the improved version, for which 62 of the Army's 143 systems have been
upgraded. According to Army officials, funding is not available to
establish full core capability. Thus, 12 years after initial
operational capability was achieved, the Army still had not established
the required capability in the military depot system.
Shortcomings in the Acquisition Process Contributed to Lack of Timely
Identification and Establishment of Core Capability:
We identified several shortcomings in the acquisition process that
contributed to the lack of timely identification and establishment of
core capability for new and modified systems. More specifically, (1)
acquisition guidance provides little to no information on how to
identify and plan for the establishment of core capability, (2)
acquisition strategies do not fully address core requirements, and (3)
some program offices are not procuring technical data required to
establish core capabilities.
Acquisition Guidance Does Not Explain How the Core Analysis Should Be
Performed or Provide Information on Actions Needed to Establish Core
Capability:
While DOD requires the identification and establishment of core
capability for new and modified systems, we found that DOD acquisition
guidance does not explain how the required core analysis should be
performed, or provide specific information on actions needed to
establish core capability. As discussed earlier, DOD Instruction
5000.02 requires that a core logistics analysis be included as part of
the acquisition strategy by Milestone B or by Milestone C, if there is
no Milestone B. However, this guidance resides in a table of statutory
and regulatory information requirements, which deemphasizes this
requirement compared to guidance provided in the main text of the
instruction. Further, the instruction provides no specifics about the
elements --such as resource requirements and time frames--needed to
effectively plan for the establishment of a core capability if a core
requirement is identified through the core logistics analysis. In
December 2008, DOD updated Instruction 5000.02 and made a change that
requires that the core logistics analysis and source of repair analysis
be addressed in the life-cycle sustainment plan for Milestone B and
that the life-cycle sustainment plan be included in the acquisition
strategy document. However, while this guidance provides more emphasis
on the sustainment phase, it still does not require specific plans,
including resource requirements and time frames, for establishing core
capability.
Other DOD acquisition guidance also lacks specific information on the
elements necessary to effectively identify and establish core
capabilities within the required time frames. The Defense Acquisition
Guidebook, which was last updated in December 2004,[Footnote 30] is a
resource for program managers to use as a reference guide supporting
their management responsibilities. The guidebook does not establish
mandatory requirements, but provides the program managers with
discretionary best practices. Regarding core logistics analysis, the
Defense Acquisition Guidebook states only that the program managers
shall ensure that maintenance source of support selection complies with
requirements identified in DOD Instruction 5000.2. It provides no
further specific direction for identifying and establishing core
capability.
Moreover, DOD guidance overall places less emphasis on core capability
relative to other guidance about sourcing sustainment activities,
including maintenance, through performance-based logistics
arrangements. DOD has identified performance-based logistics as the
"preferred" support approach for DOD systems.[Footnote 31] This
emphasis on performance-based logistics contributes to the lack of
emphasis by program offices on integrating core capabilities into the
acquisition process. Some program officials cited what they perceive as
a conflict between the department's emphasis on outsourcing logistics
activities through private contractors and the guidance to establish
core logistics capability in military depots. One official provided us
with a copy of a 1997 training guide for acquisition officials that
emphasized an outsourcing strategy for supporting weapon systems.
[Footnote 32] The guide stated that under DOD's outsourcing strategy,
support concepts for new and modified systems maximize the use of
contractor-provided, long-term, total life-cycle logistics support that
combines depot-level maintenance with wholesale and selected retail
materiel management functions. While this training guide is no longer
in use, it illustrates the emphasis that has been placed on using
sustainment approaches other than military depots.
Recognizing more guidance was needed on how to perform a core logistics
analysis, the Army's Communications Electronics Life Cycle Management
Command joined with the Program Executive Offices for Command, Control,
Communications-Tactical and Intelligence, Electronic Warfare and
Sensors in 2002 to develop standard operating procedures that document
the steps needed to successfully complete this analysis, along with a
corresponding source of repair analysis.[Footnote 33] The standard
operating procedures address elements that should be part of the core
logistics analysis, both at the system and component level. For
example, the procedures address the need for a program manager to
ensure that the component-level core logistics analysis incorporates a
plan for obtaining the rights or access to technical data. Because of a
backlog of legacy systems for which a core analysis had not been
performed, these Army offices also created a streamlined standard
operating procedure applicable to legacy systems.[Footnote 34]
Another shortcoming in DOD's acquisition guidance is that it does not
make specific reference to the 4-year time frame for establishing core
capability after a system reaches its initial operational capability.
While this 4-year time frame is established within a DOD directive
(4151.18) that is applicable across the department, this directive is
generally used more by DOD's logistics support community than by the
acquisition community. DOD Instruction 5000.02 is silent on the
required time frame for establishing core capability.
Recognizing the importance of early identification of core requirements
to the establishment of core capability, the Air Force since 2006 has
required program offices to conduct an initial core assessment when the
core analysis that is required by DOD guidance cannot be accomplished.
The intent of this requirement is to allow for an earlier evaluation of
the system's sustainment concept. According to the Air Force,
traditionally source of repair and core decisions have not been
accomplished until later in the acquisition process--at least partially
due to not having sufficient data available about the system to
accomplish a source of repair and core analysis. These delays led to
decisions that ultimately limited the government's sustainment concept
options. To address this concern, the Air Force in December 2006 added
an additional requirement to its acquisition guidance that a strategic
source of repair determination be conducted for systems when a depot
source of repair determination cannot be accomplished for program
initiation approval (for example, by Milestone B) in order to allow for
an earlier assessment of the sustainment concept.[Footnote 35] Air
Force officials told us that, under this new policy, the strategic
source of repair determination should be conducted for new systems
prior to Milestone B. Air Force officials pointed out that programs
must still conduct a core logistics analysis as required under DOD
Instruction 5000.02. The officials noted that from October 2007 to July
2008, the strategic source of repair determination was used on three
weapon system acquisition programs: the F-15E Active Electronically
Scanned Array Radar System, the KC-135 Replacement Tanker Aircraft, and
the C-27 Joint Cargo Aircraft. The strategic source of repair
determination for these three systems resulted in their being
identified as having core capability requirements. According to the Air
Force, the strategic source of repair determination will allow
acquisition programs to identify anticipated sources of repair early
enough in the acquisition process so that defense acquisition planning
and programming documents, as well as resulting contracts, contain the
appropriate sustainment elements needed to support the acquisition
strategy. This initial core assessment appears to be a promising
practice to support the timely establishment of core capability.
Acquisition Strategies Do Not Fully Address Core Requirements:
Our review of acquisition strategies for 11 major acquisition programs
prepared from April 2001 to February 2008 determined that this key
acquisition documentation did not fully address core capability
requirements for the systems or how the programs would go about
establishing required core capabilities. The acquisition strategy is a
business and technical management approach designed to achieve program
objectives within the resource constraints imposed. It is the framework
for planning, directing, contracting for, and managing a program.
However, as noted earlier, DOD acquisition guidance does not explain
how to incorporate specific plans for establishing core capability in
the acquisition strategy. We looked at 11 ACAT I[Footnote 36] system
acquisition strategies to determine the extent to which these
strategies addressed core capability requirements in the absence of
specific DOD guidance. For example, in the absence of such guidance, we
determined whether the strategies (1) stated that the systems were
designated to support core capability requirements, (2) identified a
possible depot source of repair, and (3) provided a plan for funding
and establishing core capability. The acquisition strategies we
reviewed did not include these types of information, even though the
systems had been determined to have core requirements. Specifically, we
found that the most frequent information provided in the acquisition
strategies was simply a statement of the need to address core
requirements as required by Section 2464 of Title 10. Further, none of
the acquisition strategies we reviewed laid out a plan to establish
core capabilities within 4 years of initial operational capability at
military depots. Without adequate considerations for core capability
requirements in pertinent decision documents, such as the acquisition
strategies, program offices likely will not adequately plan for
acquiring resources to establish core capability at military depots.
Program Offices Did Not Procure Technical Data Needed to Establish Core
Capability:
A key impediment to the establishment of core capability is that some
program offices have not been procuring necessary technical data during
the system acquisition process. Some of the programs in our review of
new and modified systems for which a core capability was not
established within required time frames cited the unavailability of
technical data as a key factor contributing to this situation. Also, as
discussed earlier, acquisition approaches that planned on long-term use
of contractor support resulted in not acquiring technical data or
access to technical data rights, which are essential for establishing
depot maintenance capability in military depots.
In 2006, we reported that the lack of technical data rights limited the
services' flexibility to make changes to sustainment plans that are
aimed at achieving cost savings and meeting legislative requirements
for depot maintenance capabilities.[Footnote 37] Specifically, we
reported on seven Army and Air Force weapon system programs where the
services encountered limitations in implementing revisions to
sustainment plans. The programs were the C-17 aircraft, F-22 aircraft,
C-130J aircraft, Up-armored High-Mobility Multipurpose Wheeled Vehicle,
Stryker family of vehicles, Airborne Warning and Control System
aircraft, and M4 carbine rifle. Although circumstances surrounding each
case were unique, earlier decisions made on technical data rights
during system acquisition were cited as a primary reason for the
limitations subsequently encountered. We noted that delaying action in
acquiring technical data rights can make these data cost prohibitive or
difficult to obtain later in the weapon system life cycle. For example,
the Air Force did not acquire technical data during the acquisition
process for the C-17, F-22, and C-130J aircraft. In these cases, the
Air Force made attempts to obtain needed technical data but found that
the equipment manufacturer, among others, declined to provide the data
or it was too expensive. Without successfully working out arrangements
to provide the depots the technical data they need, the Air Force
cannot develop comprehensive core maintenance capability for these
aircraft. Officials at the Warner Robins Air Logistics Center told us
that while establishing partnerships is sometimes seen as the way to
get around technical data issues, the depot has been challenged to
establish viable agreements with the subcontractors for various C-17
systems and components that were identified as core requirements.
Similarly, the Army Materiel Command designated Anniston Army Depot as
the Army's depot maintenance facility using a performance-based
logistics arrangement with General Dynamics Land Systems for the
Stryker family of vehicles. According to Army officials, the contract
with General Dynamics Land Systems will provide Anniston with
instructions for the repair of the Stryker. However, Anniston has been
unable to obtain sufficient technical data rights, which limits its
ability to perform maintenance, even though Anniston participated in
the assembly of Stryker vehicles in a partnership arrangement.
Recent changes in law and DOD guidance have addressed the acquisition
of technical data. Section 802(a) of the National Defense Authorization
Act for Fiscal Year 2007[Footnote 38] directed the Secretary of Defense
to require program managers for major weapon systems and subsystems of
major weapon systems to assess the long-term technical data needs of
their systems and to establish corresponding acquisition strategies
that provide for technical data rights needed to sustain the systems
over their life cycle. In July 2007, the Under Secretary of Defense for
Acquisition, Technology, and Logistics directed that program managers
for ACAT I and II programs assess their long-term technical data needs.
Further, the December 2008 update of DOD Instruction 5000.02 requires
that a program's long-term technical data needs be reflected in a data
management strategy. The data management strategy is to be approved in
the context of the acquisition strategy prior to issuing a contract
solicitation. It is too soon to determine the impact that this data
management initiative may have on the availability of technical data
and the establishment of core capabilities.
Conclusions:
Under the biennial core determination process, DOD lacks assurance that
it possesses the core capabilities that are necessary to maintain and
repair the weapon systems and other military equipment that are
identified as necessary to enable the armed forces to fulfill the
strategic and contingency plans prepared by the Chairman, JCS. DOD's
core determination process for 2007 did not provide a complete and
accurate assessment of core capabilities at military depots. Although
DOD reported that more than enough capability existed DOD-wide to
support core requirements for fielded systems, the services' data
showed that capability shortfalls existed for several equipment/
technology categories. An accurate and comprehensive identification of
shortfalls is a necessary first step to managing them and taking
corrective actions. Further, DOD lacked internal controls to prevent
errors and inconsistencies in the military services' implementation of
the core determination process, with the result that shortfalls were
probably greater than the numbers computed by the military services. In
addition, because DOD lacks an effective mechanism for ensuring that
corrective actions are taken to manage and reduce core shortfalls for
fielded systems, shortfalls in capability can remain unresolved and
grow over time. DOD could address most of the shortcomings in the
biennial core process by improving its core determination guidance,
ensuring service compliance with the guidance, expanding on the
internal reporting of core results, and instituting a mechanism to
ensure corrective actions are taken when shortfalls in core capability
are identified. In addition, visibility and oversight of the core
determination process could be enhanced by submitting to Congress the
results of the core process, as well as planned corrective actions to
address shortfalls.
Shortcomings in DOD's acquisition guidance and its implementation have
resulted in DOD program managers not identifying and establishing
required core capability at military depots in a timely manner--
capability that will be needed to support future maintenance
requirements for new and modified systems. As older fielded systems
phase out of the inventory and newer ones are phased in, shortfalls in
core capability to support these systems could grow unless DOD
acquisition programs change their practices of delaying the
identification and establishment of core capability. Since acquisition
guidance provides little or no information on how to identify and plan
for the establishment of core capability and relatively greater
emphasis is placed on using contractor support arrangements, such as
performance-based logistics, program managers may continue to focus
their sustainment strategies on the use of contractors. For example,
the practice of not acquiring or obtaining access to technical data
during the weapon system acquisition process has impeded DOD's ability
to establish core capabilities at military depots. DOD could improve
its acquisition process to provide better assurance that program
offices identify and establish core depot maintenance capabilities for
new and modified systems in a timely manner. If DOD's acquisition
process is not improved and current practices continue, as fielded
systems are phased out of the inventory, DOD depots may not be able to
provide the ready and controlled source of technical competence they
need to ensure an effective, timely response to future national defense
emergencies.
Recommendations for Executive Action:
To improve DOD's ability to assess core logistics capabilities with
respect to fielded systems and correct any identified shortfalls in
core capability, we recommend that the Under Secretary of Defense for
Acquisition, Technology, and Logistics take the following four actions
to revise DOD's biennial core instruction:
* Require DOD to compile and report the services' core capability
requirements, planned organic workloads, and any shortfalls by
equipment/technology category (work breakdown structure).
* Require DOD to implement internal controls to prevent errors and
inconsistencies in the services' core calculations. At a minimum,
internal controls should address errors and inconsistencies identified
in our review on the need to include (1) all JCS-scenario-tasked
systems, (2) software maintenance requirements, and (3) only public
depot maintenance workload when adjusting for redundancy.
* Explicitly state the mathematical calculations, based on their core
determination worksheets, which the services should use to determine
core capability requirements, associated workload, and shortfalls, if
any.
* Require DOD to establish a mechanism to ensure that corrective
actions are taken to resolve identified core shortfalls. For example,
DOD should institute, in the alternative years of the biennial core
process, a status report on the actions taken to resolve shortfalls
identified in the previous year.
To provide better assurance that program offices identify and establish
core depot maintenance capabilities for new and modified systems in a
timely manner, we recommend that the Under Secretary of Defense for
Acquisition, Technology, and Logistics take the following four actions:
* Provide program managers with standard operating procedures for
performing a core logistics analysis as required in DOD guidance. These
standard operating procedures should also ensure that core requirements
are considered in conjunction with other sustainment approaches.
* Modify DOD Instruction 5000.02 to incorporate the 4-year time frame
for establishing core capability from initial operational capability,
as currently required in DOD Directive 4151.18.
* Require that the acquisition strategy for each new and modified
system include either a statement that core capability requirements
were not identified for the system or, if core requirements were
identified, a plan for establishing core capability within 4 years of
initial operational capability, including obtaining the required
resources.
* Require an initial core assessment early in the acquisition process
(preferably prior to Milestone B).
Because DOD has recently updated its guidance to require that a
program's long-term technical data needs be reflected in a data
management strategy, we are not making a recommendation on this matter.
Matter for Congressional Consideration:
Congress should consider requiring DOD to report on the status of its
effort to maintain a core logistics capability consistent with Section
2464 of Title 10, U.S. Code. In doing so, Congress may wish to require
that DOD report biennially on the results of its core determination
process, actions taken to correct any identified shortfalls in core
capability, and efforts to identify and establish core capability for
new and modified systems in a timely manner, consistent with DOD
guidance.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with eight
of our recommendations. DOD partially concurred with one recommendation
in the draft report, and we have replaced this recommendation with a
matter for congressional consideration. DOD's comments are reprinted in
appendix II.
The department stated that DOD Instruction 4151.20, published
subsequent to the 2007 core determination process, satisfies many of
the recommendations contained in the draft report. We obtained and
analyzed the instruction as part of our review, compared it with prior
guidance that existed for the 2007 process, and considered it when
formulating our findings, conclusions, and recommendations. As noted in
the report, the instruction did not depart substantially from the
earlier guidance. Therefore, we disagree with DOD that it satisfies
many of the recommendations in our report and continue to believe that
DOD should take additional actions to implement these recommendations,
as discussed further below.
DOD concurred with our recommendations to improve DOD's ability to
assess core logistics capabilities with respect to fielded systems and
correct any identified shortfalls. Regarding our recommendation that
DOD improve its approach to compiling and reporting on core capability
requirements, workloads, and shortfalls by equipment/technology
category (work breakdown structure), DOD stated that it already
conducts an analysis of core requirements and sustaining workloads at
the work breakdown structure level. DOD also stated that it tasked the
services to provide plans for eliminating shortfalls identified during
the 2009 core determination process. We believe that DOD is
misconstruing the intent of our recommendation, which was to improve
DOD's approach to compiling the service-specific results into a
departmentwide assessment. As stated in our report, DOD's internal
report on the results of the 2007 process aggregated the services'
analyses and did not provide a complete and accurate assessment of core
capabilities at military depots, including shortfalls that had been
identified in specific equipment/technology categories. Therefore, we
continue to believe that DOD should improve its approach to compiling
and reporting a departmentwide assessment with the aim of providing
greater detail on the results of the core determination process.
Regarding our recommendations on the services' submissions and
mathematical calculations used in the core determination process, DOD
stated that DOD Instruction 4151.20 provides a consistent format and
process for the services to follow in developing their core
requirements and sustaining workloads. As part of the next data call,
DOD plans to reiterate and incorporate our recommendation to prevent
errors and inconsistencies in the services' core calculations. DOD
further stated that it will provide explicit guidance that the services
follow and complete the core calculation worksheets in their entirety.
DOD's planned actions should focus more attention on the need to ensure
accurate and consistent core submissions and calculations across the
services. However, our report notes that the services took different
approaches in implementing DOD's core guidance, and DOD Instruction
4151.20 does not substantially change this guidance. Therefore, DOD
should take additional steps that we recommended, such as instituting
internal controls, for ensuring service compliance with its core
determination guidance.
Regarding our recommendation to ensure corrective actions are taken to
resolve core capability shortfalls, DOD stated that it (1) has tasked
the services with providing plans for eliminating shortfalls identified
during the 2009 core determination process and (2) will identify
shortfalls as a semi-annual agenda item for a senior-level maintenance
steering committee until shortfalls are resolved. As noted in our
report, we believe DOD's tasking to the services is a step in the right
direction, but falls short of establishing an effective mechanism to
ensure that shortfalls are corrected. In addition, on the basis of
DOD's comments and information we subsequently obtained about the
charter for the steering committee,[Footnote 39] it is unclear to what
extent this entity will provide an effective mechanism to resolve
shortfalls. Therefore, while DOD's planned actions are positive steps,
DOD may need to take additional actions to fully meet the intent of
this recommendation.
DOD partially concurred with a recommendation in our draft report aimed
at enhancing the visibility and oversight of the core process. DOD
stated that the department will continue to provide Congress with
information it requests for oversight. The department also stated that
it plans to make the results of the core determination process
available on a DOD Web site. However, DOD was opposed to generating
reports to Congress which it has not requested. As we state in the
report, Congress does not have readily available and routine visibility
of the status of DOD's core capability, including core requirements,
associated workloads, and shortfalls, if any exist. As a result,
Congress is not in the best position to make oversight decisions, and
DOD is not held accountable for the extent to which the military
possesses the core logistics capability specified in Section 2464 of
Title 10, U.S. Code. Therefore, we have replaced this recommendation
with a matter for congressional consideration that DOD be required to
report on the status of its effort to maintain a core logistics
capability consistent with Section 2464.
DOD concurred with our recommendations to provide better assurance that
program offices identify and establish core depot maintenance
capabilities for new and modified systems in a timely manner. DOD
stated that it will revise guidance in DOD Instruction 5000.02, DOD
Directive 4151.18, and the Defense Acquisition Guidebook to provide
more specificity on how to identify and establish core capability
during the acquisition process. DOD also plans to revise its guidance
on the core determination process (DOD Instruction 4151.20) to provide
specific core analysis, guidance, and procedures for systems being
acquired. Additionally, DOD will issue interim policy until the
applicable guidance has been revised. These actions, if implemented,
should meet the intent of our recommendations.
We are sending copies of this report to the appropriate congressional
committees and the Secretary of Defense, the Secretaries of the Army,
the Navy, the Air Force, and the Commandant of the Marine Corps. In
addition, this report will be available at no charge on the GAO Web
site at [hyperlink, http://www.gao.gov].
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. If you or your
staff have any questions regarding this report, please contact me at
(202) 512-8365 or solisw@gao.gov. Key contributors to the report are
listed in appendix III.
Signed by:
William M. Solis, Director:
Defense Capabilities and Management:
[End of section]
Appendix I: Scope and Methodology:
To evaluate the extent to which the DOD has accurately assessed whether
it has the required core capabilities in military depots to support
fielded systems, we reviewed DOD's core determination process for 2007.
We obtained and reviewed guidance that was issued by the Office of the
Secretary of Defense (OSD) that was in effect for the 2007 core
process, as well as subsequent guidance issued for the 2009 biennial
review. We reviewed the military services' implementation of the core
determination methodology. We obtained and analyzed their core
worksheets showing core capability requirements and associated planned
workloads. We determined the extent that the services followed the
methodology, and we identified any errors or inconsistencies. Where
errors or inconsistencies were identified, however, we did not
recalculate core requirements. We obtained OSD's internal report
summarizing the results of the 2007 core process and compared it with
the worksheet data submitted by the services. In addition, we discussed
the core determination process and the results of our data analyses
with OSD and service officials. Although our review focused on the 2007
core determination process, we obtained limited information from DOD
officials on the 2009 core process, which was ongoing at the time of
our review. We also compared the results of the 2007 core process with
those of the 2005 process to identify any trends and to determine how
identified shortfalls in core capability were being addressed and
resolved. One limitation in our methodology was that we did not assess
DOD's decisions on the weapon systems that were identified in the Joint
Chiefs of Staff (JCS) scenarios. Inaccurate tasking of weapon systems
could have the effect of either overstating or understating core
capability requirements for fielded systems.[Footnote 40] We also
reviewed our prior reports on core capability and depot maintenance
issues, as well as related reports issued by service audit agencies and
research organizations.
To determine the extent to which DOD is preparing to support future
core requirements for new and modified systems in military depots, we
examined pertinent DOD guidance, including acquisition guidance in
DOD's 5000 series of directives and instructions, DOD guidance for
managing military materiel, and service acquisition policies. To obtain
information on the identification of core requirements for new and
modified systems, we asked the services to identify systems that were
in the acquisition process during 2006. Due to DOD data limitations, we
could not verify that the services included all systems meeting our
criteria. We then surveyed program managers about whether they had
conducted a core analysis for their system. We received responses from
112 program managers, including 52 who responded that they had
performed a core analysis or source of repair analysis.[Footnote 41] We
conducted additional follow-up audit work with the 52 who responded
that they had completed a core analysis. We did not assess the
rationale for the decisions made on identifying the systems' core
requirements. However, we collected comments from OSD and service
officials and examined service documents on the factors that complicate
program managers' decisions to identify core requirements during the
acquisition process.
To determine whether the services established core logistics
capabilities for new and modified systems for which a core requirement
had been identified, we reviewed systems that had completed the
acquisition process and were in operation between 1998 and 2003. From a
total population of 662 systems that met these criteria, we randomly
selected 53 systems and judgmentally selected another 20 systems. From
this list of 73 systems, we subsequently excluded 43 weapon systems for
various reasons, as shown in table 6, leaving a total of 30 systems.
Because the selected systems do not represent a statistical sample,
results from nongeneralizable samples cannot be used to make inferences
about a population.
Table 6: Explanations for Why 43 Systems Were Excluded from Our Review:
Reason for exclusion: Initial operational capability date outside of
the time frame[A];
Number of systems excluded: 13.
Reason for exclusion: No depot repair capability required;
Number of systems excluded: 13.
Reason for exclusion: Not tasked in JCS scenarios;
Number of systems excluded: 12.
Reason for exclusion: Commercial off-the-shelf item;
Number of systems excluded: 5.
Reason for exclusion: Total systems excluded;
Number of systems excluded: 43.
Sources: GAO analysis of DOD data.
[A] Systems with an initial operational capability date after 2003 were
excluded because we were precluded from determining whether the
department would achieve the depot capability within the 4-year window.
[End of table]
We further reviewed the 30 systems to determine whether core
capabilities were established at military depots within 4 years of
their initial operational capability date. We reviewed various program
documents, including source-of-repair decisions and maintenance plans,
and interviewed program officials about the characteristics of the
systems and maintenance sustainment decisions. Further, we examined
Defense Acquisition Board documents for some of the selected weapon
systems to determine if core capabilities were recorded when future
sustainment agreements were discussed in acquisition reviews.
We assessed the reliability of the data from the services' databases
that we used to conduct our review and determined that the DOD data
were sufficiently reliable for the purposes of our analysis and
findings. While the results of these reviews cannot be generalized to
all weapon systems in the acquisition process, deficiencies in the way
core capability is identified or established for these systems indicate
the existence of more widespread problems. Further, we did not look at
the larger question of whether DOD fulfilled the warfighter's
requirements as part of our review.
In conducting work for both objectives, we interviewed officials and
obtained documentation, when applicable, at the following locations:
* Office of the Secretary of Defense, Washington, D.C.
* Joint Chiefs of Staff, Washington, D.C.
* Air Force Headquarters, Washington, D.C.
* Air Force Materiel Command, Ohio:
* Oklahoma City Air Logistics Center, Oklahoma:
* Warner Robins Air Logistics Center, Georgia:
* Army Headquarters, Washington, D.C.
* Army Materiel Command, Virginia:
* Anniston Army Depot, Alabama:
* Corpus Christi Army Depot, Texas:
* Tobyhanna Army Depot, Pennsylvania:
* U.S. Army Aviation and Missile Command, Alabama:
* U.S. Army Communications and Electronics Command, New Jersey:
* TACOM Life Cycle Management Command, Michigan:
* Marine Corps Systems Command, Virginia:
* Marine Corps Logistics Command, Georgia:
* Navy Headquarters, Washington, D.C.
* Naval Air Systems Command, Maryland:
* Fleet Readiness Center East, North Carolina:
* Naval Sea Systems Command, District of Columbia:
* Norfolk Naval Shipyard, Virginia:
We conducted this performance audit from June 2007 through March 2009
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of Defense:
Deputy Under Secretary Of Defense For Logistics And Materiel Readiness:
3500 Defense Pentagon:
Washington, DC 20301-3500:
April 28, 2008:
Mr. William M. Solis:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO Draft
Report, "Depot Maintenance: Actions Needed to Identify and Establish
Core Capability of Military Depots," dated March 30, 2009 (GAO Code
351072/GAO-09-83).
The GAO review and draft report were based on data collected from the
Fiscal Year 2007 Core data call. DoD Instruction 4151.20, Depot
Maintenance Core Capabilities Determination Process, published
subsequent to the FY 2007 submissions, establishes the core
determination process as policy and satisfies many of the
recommendations contained in the draft report. The Department concurs,
or partially concurs with all recommendations. An explanation of the
DoD position is enclosed.
The Department appreciates the opportunity to comment on the draft
report.
Sincerely,
Signed by:
Alan F. Estevez:
Acting:
Enclosure: As stated:
[End of letter]
Enclosure:
GAO Draft Report - Dated March 30, 2009:
GAO Code 351072/GAO-09-83:
"Depot Maintenance: Actions Needed to Identify and Establish Core
Capability at Military Depots"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics require DoD to
compile and report the Services' core capability requirements, planned
organic workloads, and any shortfalls by equipment/technology category
(work breakdown structure).
DOD Response: Concur. The DoD already conducts an analysis of core
requirements and sustaining workloads at the work breakdown structure
level. Shortfalls were identified in the initial FY 2009 Service
submissions and the Services have been tasked to provide plans that
eliminate those shortfalls.
Recommendation 2: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics require DoD to
implement internal controls to prevent errors and inconsistencies in
the Services' core calculations. At a minimum, internal controls should
address errors and inconsistencies identified in the GAO review
regarding the need to include: (1) all Joint Chiefs of Staff-scenario-
tasked systems; (2) software maintenance requirements; and (3) only
public depot maintenance workload when adjusting for redundancy.
DOD Response: Concur. DoDI 4151.20, Depot Maintenance Core Capabilities
Determination Process, published subsequent to the FY 2007 submissions
established the core determination process as policy. The Instruction
provides a consistent format and process for the Services to follow in
developing their core requirements and sustaining workloads. The
Department will reiterate and incorporate the recommendations above
into the next core data call.
Recommendation 3: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics explicitly state the
mathematical calculations, based on their core determination worksheets
that the Services should use to determine core capability requirements,
associated workload, and shortfalls, if any.
DOD Response: Concur. DoDI 4151.20, Depot Maintenance Core Capabilities
Determination Process, published subsequent to the FY 2007 submissions,
established the core determination process as policy. The Instruction
provides a consistent format and process for the Services to follow in
developing their core requirements and sustaining workloads. A specific
worksheet is included in the DoDI along with specific instructions for
filling out each block. For instance, the instruction for Block H
reads, "E2.2.1.10. Block H - Total Adjusted Requirements. Record the
net adjusted requirements in Column H of the worksheet (Part 1), Table
E2.T1. Carry this information forward to the workload identification
process described in Block K (see subparagraph E2.2.2.5.)." The
Department will provide explicit guidance that these worksheets are to
be followed and completed in their entirety.
Recommendation 4: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics require DoD to
establish a mechanism to ensure that corrective actions are taken to
resolve identified core shortfalls. For example, DoD should institute,
in the alternative years of the biennial core process, a status report
on the actions taken to resolve shortfalls identified in the previous
years.
DOD Response: Concur. Identified core sustaining workload shortfalls
will be a semi-annual agenda item for the Maintenance Executive Senior
Steering Group until shortfalls are resolved
Recommendation 5: The GAO recommends that the Secretary of Defense
provide Congress (1) the results of the biennial process to include
core requirements, planned workload, and any shortfalls by Service and
equipment/technology category, along with the plans and funding
required to rectify any shortfalls, and (2) an interim year report of
the Department's progress for resolving core capability shortfalls.
DOD Response: Partially concur. The Department will continue to provide
the Congress with the information they request in order to provide
oversight. Information regarding the results of the biennial process
will be available on the Maintenance Policy and Programs website. The
Department does not recommend generating reports to the Congress which
they have not requested.
Recommendation 6: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics provide program
managers with standard operating procedures for performing a core
logistics analysis as required in DoD guidance. These standard
operating procedures should also ensure that core requirements are
considered in conjunction with other sustainment approaches.
DOD Response: Concur. DoD instruction DoDI 4151.20, Depot Maintenance
Core Capabilities Determination Process will be revised to provide
specific core analysis, guidance and procedures for systems in
acquisition. DoDI 5000.02, Operation of the Defense Acquisition System,
December 8, 2008, already requires the conduct of a Core Logistics
Analysis prior to Milestone B (or Milestone C if there was no Milestone
B). However, DoDI 5000.02 will be modified to correctly reference the
necessity to conduct a core capability assessment and analysis in
accordance with the provisions of DoDD 4151.18 and DoDI 4151.20. The
Defense Acquisition Guidebook will also be updated to provide
additional amplification. Interim policy will be issued until the DoD
instructions and Defense Acquisition Guidebook can be revised.
Recommendation 7: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics modify DoDI 5000.02
to incorporate the 4-year timeframe for establishing core capability
from initial operational capability, as currently required in DoD
Directive 4151.18.
DOD Response: Concur. DoDI 5000.02, Operation of the Defense
Acquisition System, December 8, 2008, will be revised to correctly
reference the necessity to conduct a core capability assessment and
analysis in accordance with the provisions of DoDD 4151.18 and DoDI
4151.20, which already incorporate the requirement for the 4-year
timeframe for establishing core capability from initial operational
capability. The Defense Acquisition Guidebook will also be updated to
reflect this requirement. Interim policy will be issued until the DoD
instruction and Defense Acquisition Guidebook can be revised.
Recommendation 8: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics require that the
acquisition strategy for each new and modified system include either a
statement that core capability requirements were not identified for the
system or, if core requirements were identified, a plan for
establishing core capability within 4 years of initial operational
capability, including obtaining the required resources.
DOD Response: Concur. DoDI 5000.02, Operation of the Defense
Acquisition System, December 8, 2008, will be revised to reflect a
requirement to document the results of the Core Logistics
Analysis/Source of Repair Analysis prior to Milestone B (or prior to
Milestone C if there was no Milestone B). The Defense Acquisition
Guidebook will also be updated to provide additional amplification.
Interim policy will be issued until the DoD instruction and Defense
Acquisition Guidebook can be revised.
Recommendation 9: The GAO recommends that the Under Secretary of
Defense for Acquisition, Technology, and Logistics require an initial
core assessment early in the acquisition process (preferably prior to
Milestone B).
DOD Response: Concur. DoDI 4151.20, Depot Maintenance Core Capabilities
Determination Process will be modified to provide specific core
analysis, guidance and procedures to the Program Managers. Direction
will include the requirement to identify the existence of core
capability requirements and determine candidate organic depots for
depot-level maintenance not later than Milestone B of the acquisition
process. For those programs entering the acquisition process at
Milestone C, core and candidate organic depot determinations shall be
made no later than 90 days following notification of program approval.
These requirements are already included in DoDI 5000.02. The Defense
Acquisition Guidebook will also be updated to provide additional
amplification. Interim policy will be issued until the DoD instructions
and Defense Acquisition Guidebook can be revised.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
William M. Solis, (202) 512-8365 or solisw@gao.gov:
Acknowledgments:
In addition to the contact named above, Julia Denman and Tom Gosling,
Assistant Directors; Carleen Bennett; Grace Coleman; Susan Ditto; David
Epstein; Chanee Gaskin; Dawn Godfrey; Katherine Lenane; Shawnda
Lindsey; Randy Neice; Geoffrey Peck; Terry Richardson; and John Trubey
made key contributions to this report.
[End of section]
Footnotes:
[1] Depot maintenance is the highest level of maintenance within DOD
and generally refers to major maintenance and repair actions.
[2] Pub. L. No. 98-525, § 307 (1984). This section was originally
codified at 10 U.S.C. § 2304 (note).
[3] 10 U.S.C. § 2464.
[4] The statute excludes systems and equipment that are under special
access programs, nuclear aircraft carriers, and commercial items that
have been sold or leased in substantial quantities to the general
public and are purchased without modification in the same form that
they are sold in the commercial marketplace, or with minor
modifications to meet federal government requirements. We did not
review systems and equipment that were excluded based on exceptions
provided for in the statute.
[5] Pursuant to Section 153(a) of Title 10, U.S. Code, JCS prepares
representative contingency scenarios for which the U.S. military forces
should be manned, equipped, and trained to respond.
[6] Capability is the combination of skilled personnel, facilities,
equipment, processes, and technology needed to perform a particular
category of work (e.g., composite repair), and that are necessary to
maintain and repair the weapon systems and other military equipment
needed to fulfill strategic and contingency plans.
[7] Further, the Deputy Under Secretary of Defense for Logistics and
Materiel Readiness is responsible for the maintenance of the biennial
core calculation and its computation methodology; the issuance of
tasking memorandums to trigger the computation process on a biennial
basis; the collection, review, and evaluation of services' submissions;
and the computation of the composite core capability requirements and
associated workloads for DOD.
[8] DOD Instruction 4151.20, Depot Maintenance Core Capabilities
Determination Process, January 5, 2007. One significant change in the
instruction, compared with the earlier tasking letter, is that it
requires the services to include in their biennial reports plans to
rectify core capability shortfalls, if any.
[9] For the purposes of the biennial core determination process, DOD
defines "capability" as the combination of skilled personnel,
facilities and equipment, processes, and technology needed to perform a
particular category of work, and that are necessary to maintain and
repair the weapon systems and other military equipment needed to
fulfill strategic and contingency plans. DOD measures core capability
requirements and the associated workload in direct labor hours.
[10] An indenture is a lower-level element of defense materiel or
equipment.
[11] This calculation may include other factors. For example, DOD's
biennial core determination guidance states that "substitutions of
similar workloads may be made as necessary to fulfill core capability
requirements for systems with limited inventories or fluctuating
workload requirements."
[12] DOD Directive 5000.01, The Defense Acquisition System, November
20, 2007.
[13] DOD Instruction 5000.02, Operation of the Defense Acquisition
System, December 2, 2008.
[14] In referring to this requirement, the guidance uses the term core
logistics analysis/source of repair analysis.
[15] DOD Directive 4151.18, Maintenance of Military Materiel (Mar. 31,
2004). The directive indicates that all maintenance and repair of
weapon systems necessary for strategic and contingency plans need not
be performed in public facilities. Rather, the capability (in the form
of skills, equipment, and facilities) to perform maintenance and repair
of these systems must be retained in those facilities.
[16] Initial operational capability is the first attainment of the
capability to effectively employ a weapon, item of equipment, or system
of approved specific characteristics that is manned or operated by an
adequately trained, equipped, and supported military unit or force.
[17] GAO, Defense Logistics: Actions Needed to Overcome Capability Gaps
in the Public Depot System, [hyperlink,
http://www.gao.gov/products/GAO-02-105] (Washington, D.C.: Oct. 12,
2001).
[18] The memorandum, dated March 7, 2007, was prepared by the Office of
the Deputy Under Secretary of Defense for Logistics and Materiel
Readiness.
[19] Also known as supplemental funding.
[20] U.S. Army Audit Agency, Follow-up Audit on Process for Determining
Source of Depot Level Maintenance, A-2007-0130-ALM (May 22, 2007).
[21] Naval Air Systems Command explained that when a problem caused by
a component failure is found in hardware, the solution entails bringing
the hardware item back to its original configuration --whereas in the
case of software, when a problem is found and corrected, a new
configuration is created. Given that, command officials felt that the
classic organic depot scenario of an artisan using tools to restore an
item to its original condition would never apply in the software world,
and a more appropriate term than software maintenance would be software
support. Further, the officials felt that the work reserved for organic
depots under the core statute is a subset of a much larger world
defined by Section 2460, and "software maintenance" is depot
maintenance in this broader sense, rather than in terms of the core
statute.
[22] DOD guidance, both in the 2005 tasking letter and the subsequent
DOD Instruction 4151.20, further states that software is defined as "a
set of computer programs, procedures, and associated documentation
concerned with the operation of a data-processing system (e.g.,
compilers, library routines, manuals, and circuit diagrams)."
[23] Specifically, under the statue, the Secretary of Defense must
submit to Congress an annual report identifying, for each of the armed
forces and defense agencies, the percentage of the funds that were
expended during the preceding fiscal year, and are projected to be
expended during the current fiscal year and the ensuing fiscal year,
for performance of depot-level maintenance and repair workloads by the
public and private sectors.
[24] A-2007-0130-ALM.
[25] We initially analyzed data for 73 weapon systems that were new or
undergoing a modification, but excluded 43 systems for various reasons.
Our reasons for excluding the 43 systems are provided in table 6 of
appendix 1.
[26] The Joint Depot Maintenance Activities Group, among other
functions, conducts depot maintenance interservice studies and
recommends sources of repair for new weapon systems and equipment.
[27] As a result of the 2005 Defense Base Closure and Realignment
Commission Report, the Navy changed the names of the naval aviation
depots to fleet readiness centers.
[28] For further information on performance-based logistics, see GAO,
Defense Logistics: Improved Analysis and Cost Data Needed to Evaluate
the Cost-effectiveness of Performance Based Logistics, [hyperlink,
http://www.gao.gov/products/GAO-09-41] (Washington, D.C.: Dec. 19,
2008).
[29] For further information on partnerships, see GAO, Depot
Maintenance: DOD's Report to Congress on Its Public-Private
Partnerships at Its Centers of Industrial and Technical Excellence
(CITEs) Is Not Complete and Additional Information Would Be Useful,
[hyperlink, http://www.gao.gov/products/GAO-08-902R] (Washington, D.C.:
July 1, 2008).
[30] According to OSD officials, the guidebook is currently being
revised.
[31] In 2001, DOD identified performance-based logistics as the
preferred weapon system support strategy, as stated in DOD, Product
Support for the 21st Century: A Program Manager's Guide to Buying
Performance (2001). In 2007, DOD further strengthened this emphasis on
performance-based logistics by stating in a DOD policy directive that
acquisition managers shall use performance-based strategies for
sustaining products and services whenever feasible. See DOD Directive
5000.01, paras E1.1.16 and E1.1.17.
[32] Defense Systems Management College, Acquisition Logistics Guide
(December 1997). The Acquisition Logistics Guide was prepared by the
Defense Systems Management College as a teaching tool to reflect and
institute DOD's acquisition policies and procedures.
[33] The standard operating procedure was updated in January 2007.
[34] For the purposes of the standard operating procedure, the term
legacy system describes a system that has been fielded for at least 4-
years since its initial operational capability date (or the date of the
first fielding event).
[35] Secretary of the Air Force, Memorandum, Strategic Source of Repair
Determination (Dec. 20, 2006). While the December 2006 Policy
Memorandum has expired, an Air Force official told us that the policy
memorandum has been incorporated into draft Air Force guidance, and
that the policy is still being followed.
[36] The acquisition category determines the level of review, decision
authority, and applicable procedures for an acquisition program.
Acquisition category I programs have an estimated total expenditure of
more than $365 million for research, development, test, and evaluation
or procurement of more than $2.19 billion. Acquisition category II
programs have an estimated total expenditure for research, development,
test, and evaluation between $140 million and $365 million or
procurement between $660 million and $2.19 billion.
[37] GAO, Weapons Acquisition: DOD Should Strengthen Policies for
Assessing Technical Data Needs to Support Weapon Systems, [hyperlink,
http://www.gao.gov/products/GAO-06-839] (Washington, D.C.: July 14,
2006).
[38] Pub. L. No. 109-364, §802(a) (2006) (codified at 10 U.S.C.
§2320(e)).
[39] According to its charter, the Maintenance Executive Steering
Committee shall advise the Assistant Deputy Under Secretary
(Maintenance Policy and Programs) on initiatives for improving the
efficiency, effectiveness, and costs of worldwide maintenance
management and operations of the Department of Defense. It shall serve
as a mechanism for the coordinated review of DOD maintenance policies,
systems, programs, and activities and for jointly planning, monitoring,
and evaluating the DOD maintenance program. It will also serve as a
forum for the exchange of information among the Assistant Deputy Under
Secretary and other officials responsible for the conduct of DOD
maintenance operations. The Committee is chaired by the Assistant
Deputy Under Secretary and consists of senior maintenance and logistics
representatives from the Office of the Secretary of Defense, the Joint
Staff, and the Military Services.
[40] If DOD omitted weapon systems from its JCS scenarios that should
have been tasked, then its core capability requirements may have been
understated. Conversely, if DOD tasked weapon systems that would not be
needed for a scenario, then its core capability requirements may have
been overstated.
[41] For the remaining 60 systems, the program managers responded that
they had not completed core analyses or source of repair analysis for
their systems.
[End of section]
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