GAO

United States General Accounting Office

Report to Congressional Requesters

June 1999 AIR FORCE DEPOT 

MAINTENANCE

Management Changes 

Would Improve 

Implementation of 

Reform Initiatives 

GAO/NSIAD-99-63

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-282640 Letter

June 25, 1999

The Honorable James M. Inhofe

Chairman

The Honorable Charles S. Robb

Ranking Minority Member 

Subcommittee on Readiness and

 Management Support

Committee on Armed Services

United States Senate

As you requested, we assessed the progress of the Air Force’s depot maintenance reform initiatives. 

These initiatives are part of the Department of Defense’s programs to improve the efficiency and 

responsiveness of its industrial operations. We make recommendations to the Secretary of Defense to 

require the Secretary of the Air Force to take a number of actions that should improve the initiatives 

and better ensure their success.

We are sending copies of this report to Senator Ted Stevens, Chairman, and Senator Robert Byrd, 

Ranking Minority Member, Senate Committee on Appropriations; Senator John W. Warner, Chairman, 

and Senator Carl Levin, Ranking Minority Member, Senate Committee on Armed Services; 

Representative C. W. Bill Young, Chairman, and Representative David Obey, Ranking Minority 

Member, House Committee on Appropriations; Representative Floyd Spence, Chairman, and 

Representative Ike Skelton, Ranking Minority Member, House Committee on Armed Services; the 

Honorable William S. Cohen, Secretary of Defense; the Honorable F. Whitten Peters, Acting Secretary 

of the Air Force; and the Honorable Jacob J. Lew, Director, Office of Management and Budget. We will 

make copies available to others on request.

If you have questions regarding this report, please contact me at (202) 512-8412. Other points of 

contact and key contributors are listed in appendix III.

David R. Warren, Director

Defense Management Issues

Letr
Page 2 GAO/NSIAD-99-63 Air Force Depot Maintenance

Executive Summary

Purpose The Air Force is implementing three depot maintenance initiatives 

designed to better manage its depot maintenance programs, including the 

management of spare and repair parts. The Air Force spends 

approximately $4 billion on its depot maintenance programs annually. At 

the request of the Chairman and Ranking Minority Member of the Senate 

Armed Services Committee, GAO reviewed the status of the three 

initiatives and management issues related to the initiatives.

Background The Air Force Materiel Command (AFMC), which includes five Air 

Logistics Centers,1

 provides supply and maintenance support to the Air 

Combat Command, Air Mobility Command, Air Education and Training 

Command, Air Force Reserves, Air National Guard, and other major Air 

Force customers as well as to some Army, Navy, and foreign military sales 

customers. The Air Force’s complex, integrated support structure 

determines which weapon systems and components must be repaired or 

purchased and manages supply and maintenance processes and the repair 

and overhaul of weapon systems and components.

The Department of Defense (DOD) has recognized in recent years that its 

logistics activities, including depot maintenance performed in both the 

public and private sectors, need to become more efficient. Accordingly, it 

has initiated efforts to improve logistics activities by incorporating many 

best business practices that commercial companies have used to become 

more efficient and effective. For its part, the Air Force began to reengineer 

its supply and maintenance operations. Its plan, broadly stated, called for 

steps to be taken to reduce the time required to repair components and 

aircraft, reduce the amount and costs of supply inventories, match the 

repair of items with the demand from customers, prioritize repairs when 

multiple priorities exist, and rapidly move components and spare parts to 

and from customers. This effort, known as Agile Logistics, focuses on three 

principal initiatives. More specifically,

• The depot enhancement initiative applies to the repair of reparable 

spare parts such as aircraft landing gears, wheels, and avionics, and is 

aimed at limiting repairs to those items that customers need and have 

1

The Air Force is now closing the Sacramento and San Antonio Air Logistics Centers based on 

recommendations of the 1995 Base Realignment and Closure Commission.

Letr
Executive Summary

Page 3 GAO/NSIAD-99-63 Air Force Depot Maintenance

requisitioned, and meeting customers’ needs faster by prioritizing 

repairs daily.

• The aircraft enhancement initiative applies to performance of scheduled 

maintenance to keep aircraft operational or upgrade their capabilities 

and is designed to reduce repair turnaround times and costs through 

improved teamwork and communication. 

• The contract enhancement initiative applies to depot reparable 

workloads performed by contractors and is designed to reduce repair 

turnaround times and reduce costs.

In the past, GAO has reported on inefficiencies in DOD’s logistics systems 

and processes and pointed out the need for them to be more efficient, less 

costly, and more responsive to customer needs. GAO has supported the 

application of best practices in this area. The Air Force’s three 

enhancement initiatives represent an effort to achieve these ends. 

Results in Brief The Air Force is now implementing all three enhancement initiatives at its 

logistics centers, but the extent of implementation has varied. The Air 

Force’s plans established broad goals of increased operational efficiency 

and reduced costs, as well as an approach to implementing the initiatives. 

However, the plans did not include specific criteria for determining that the 

initiatives are successfully achieving stated goals. Likewise, AFMC did not 

establish clear and consistent measures to facilitate tracking progress and 

assessing the initiatives’ success. Therefore, limited data are available to 

quantify the initiatives’ success in achieving desired goals such as 

expediting repairs and reducing costs. To the extent data were available, 

they indicated mixed results.

GAO identified a number of management changes that would better 

support implementation of the initiatives and provide more accurate and 

complete data for evaluating the implementation. These changes include

• developing an implementation plan that establishes standard measures 

for assessing whether process improvement initiatives are achieving 

desired goals and results,

• assessing progress toward implementing standard organizational 

structures and processes,

• addressing weaknesses in information management systems used to 

manage the process and assess activity performance, consistent with 

the Clinger/Cohen Act and Year 2000 requirements,

Letr
Executive Summary

Page 4 GAO/NSIAD-99-63 Air Force Depot Maintenance

• identifying costs of fully implementing the initiatives and avoiding 

premature budget reductions in anticipation of savings, and

• developing effective working agreements with other defense logistics 

activities that are key to timely access to needed repair parts and 

successful implementation of logistics reforms.

GAO makes recommendations to the Secretaries of Defense and the Air 

Force that will enhance implementation of the three depot maintenance 

initiatives.

Principal Findings

Implementation Varies 

Among Initiatives

The three enhancement initiatives vary in the extent to which they have 

been implemented at AFMC centers. AFMC did not establish consistent 

measures by which to assess each initiative’s success in achieving Agile 

Logistics objectives, such as reducing repair time and costs. However, 

based on available data, GAO provides information on the status of the 

initiatives:

• The depot reparable initiative has been applied to about 31 percent of 

the Air Force’s depot reparable items with mixed results in such areas as 

improving repair times and mission capability rates. AFMC officials 

continue to assess the extent to which other items should be brought 

under the initiative, or whether some items originally included were the 

right candidates. 

• The aircraft enhancement initiative has been applied to an estimated

65 percent of the 10 aircraft systems that receive periodic programmed 

depot maintenance. AFMC officials report that turnaround times for 

periodic overhauls and repairs of aircraft have been reduced, but cost 

reductions have not been determined because the Air Force has no 

system for tracking such costs. Officials are still considering whether 

the initiative should be applied to all aircraft in the depot maintenance 

program. 

• The contract enhancement initiative has been implemented to varying 

degrees at each AFMC center, and in varying degrees within individual 

contracts. While AFMC officials believe the program has been useful in 

reducing repair time and costs, these officials have no data on actual 

reductions in turnaround times and costs that are specifically related to 

the initiative. At the same time, these officials believed that contract 

costs could increase if contractors are required to stock supply parts in 

advance of need to meet the initiative’s new requirements.
Executive Summary

Page 5 GAO/NSIAD-99-63 Air Force Depot Maintenance

Management Changes Can 

Improve Implementation of 

Initiatives

All three Air Force initiatives could be more effectively implemented 

through management changes that would help in achieving program 

objectives. Also, the Air Force has adopted a new vision statement for 

logistics management. However, it is not clear how well the new vision will 

be integrated with or address these issues because the Air Force has not 

developed a detailed plan for implementing the vision.

Standard Organizational 

Structures and Processes Not 

Fully Implemented

One objective of the Agile Logistics program is to improve the effectiveness 

and efficiency of depot operations through the use of standard 

organizational structures and processes. However, AFMC centers have 

implemented only parts of the standardized process and structure. Thus, 

AFMC does not yet have the more streamlined and standardized 

organization originally envisioned to improve personnel and equipment 

efficiency.

Greater Organizational Support 

Would Facilitate Effective 

Initiative Implementation 

Implementation of each of the reengineering initiatives could benefit from 

greater support from managers and workers to ensure the acceptance of 

change and to facilitate greater worker flexibility. One of the greatest 

challenges to the success of the initiatives, according to AFMC officials, is 

convincing supervisors and workers at the centers to accept the new way 

of doing business. Increased and sustained emphasis by top-level command 

officials is a best management practice for encouraging commitment to 

new initiatives at lower levels. Developing a multi-skilled workforce is 

equally important and equally challenging. Having the flexibility to move 

maintenance workers from one shop to another, depending on shifting 

work priorities, is critical to the success of the initiatives. 

Standard Measures Could Help 

Assess Initiative Impact and 

Effectiveness 

AFMC headquarters developed some initial measures to assess the 

performance of its depot enhancement prototype initiative, but dropped 

them as the initiative was expanded AFMC-wide. AFMC headquarters and 

the centers have not since agreed upon standard measures to assess 

individual and collective performance of the initiatives. 

Improved Information Systems 

Are Needed to Fully Implement 

Initiatives and Assess Success

Continuing system weaknesses have made it difficult for AFMC to 

implement and assess the effectiveness of its enhancement initiatives.2

Much of the data used to manage the Agile Logistics prototype initiative 

2

In Best Management Practices: Reengineering the Air Force’s Logistics System Can Yield Substantial 

Savings (GAO/NSIAD-96-5, Feb. 21, 1996), GAO reported that information system deficiencies were an 

obstacle to the Air Force’s reengineering of its logistics system.
Executive Summary

Page 6 GAO/NSIAD-99-63 Air Force Depot Maintenance

were collected manually—a task that project leaders said would be 

impossible under an Air Force-wide program. After years of minimal 

progress in trying to develop DOD-wide logistics information systems, 

DOD recently returned responsibility for logistics information systems to 

the services. It is unclear what impact this will have on the development of 

essential system improvements critical to the successful implementation of 

the Agile Logistics program. However, it will be important for the Air Force 

to ensure that future system changes are made in accordance with relevant 

legislative and departmental policy guidance, including the Clinger/Cohen 

Act of 1996, which requires federal agencies to have processes and 

information in place to help ensure that information technology projects 

(1) are implemented at acceptable costs, within reasonable and expected 

time frames and (2) are contributing to tangible, observable improvements 

in mission performance. These actions need to be done in concert with 

DOD’s actions to remediate the Year 2000 problem.

Greater Attention to Cost and 

Savings Issues Needed to Avoid 

Premature Budget Reductions

AFMC headquarters’ planning for the new initiatives did not include a 

means of adequately identifying or tracking costs of implementing them or 

for evaluating the resulting savings. Without this information, 

decisionmakers made premature budget reductions based on anticipated 

savings estimates. However, operation and maintenance funding 

reductions of $386 million in fiscal year 1997, $289 million in fiscal year 

1998, and $323 million in fiscal year 1999 resulted in critical shortages of

repair parts and spare parts. AFMC headquarters officials subsequently 

requested additional funding and no longer plan to reduce future budgets in 

anticipation of cost savings. According to AFMC headquarters officials, 

achieving cost savings will require reductions in inventories of major and 

secondary items and faster logistics response time. Reductions in aircraft 

inventories, based upon faster turnaround times, will also be key to 

achieving future savings. Unless inventories are reduced, the three 

initiatives might end up costing more than the current system because of 

the costs to implement the program.

Improved Supply Support 

Needed

Improving the efficiency and cost-effectiveness of depot maintenance 

depends on the timely availability of repair parts. Unavailability of parts 

has been a long-standing problem. AFMC headquarters officials believed 

that their parts suppliers must improve the timely availability of parts to 

effectively support the new initiatives. Without resolution of continued 

problems, it will be difficult for the AFMC to achieve the objectives of its 

initiatives. GAO supports the use of best inventory management practices, 
Executive Summary

Page 7 GAO/NSIAD-99-63 Air Force Depot Maintenance

such as prime vendor support,3 where there is potential to reduce costs and 

provide improved service. Although DOD has made limited use of prime 

vendor support for hardware items such as spare and repair parts, the Air 

Force may have greater opportunities in this area to improve supply 

support for its enhancement initiatives.

New Vision In January 1998, the AFMC Commander announced a new vision for 

logistics management, outlining a number of goals for changing logistics 

management policies and practices. Among the vision’s goals were 

matching repair to demand and setting and filling appropriate inventory 

levels. These and other goals build on the enhancement initiatives. 

However, AFMC has not developed a detailed implementation plan with 

criteria for measuring achievement of its goals and objectives. Thus, it is 

not clear whether planned improvement initiatives from this effort would 

address specific problems identified in this report. 

Recommendations Chapter 3 includes several GAO recommendations intended to help the Air 

Force effectively implement its three depot maintenance initiatives.

Agency Comments GAO requested comments on a draft of this report from the Secretary of 

Defense. Air Force officials provided oral comments on behalf of DOD 

stating that the Department agreed with GAO’s findings and with the intent 

of its recommendations. In acknowledging that measures were needed to 

better ensure success of its reform initiatives, the Air Force offered a 

general description on a number of actions that it had taken or planned to 

take to improve the reengineering of its industrial operations. However, the 

Air Force’s responses were too general to determine to what extent GAO’s 

concerns would be addressed. GAO, in evaluating the Air Force’s 

comments, outlined additional information that would be needed for a 

complete evaluation of the Air Force’s cited actions. DOD’s comments and 

GAO’s evaluation with additional amplification of suggested actions are 

more fully discussed at the end of chapter 3 and in appendix II. 

3

Prime vendors are contractors that buy inventory items from a variety of suppliers, store them in 

commercial warehouses, and ship them to customers as needed. 
Page 8 GAO/NSIAD-99-63 Air Force Depot Maintenance

Contents

Letter 1

Executive Summary 2

Chapter 1

Introduction

DOD Recognizes the Need to Improve Its Logistics Activities 10

Structure of Air Force Depot Maintenance Operations 11

Air Force Efforts to Reform Its Depot Operations 13

Previous GAO Observation on Air Force Agile Logistics Initiatives 15

Recent Air Force Analyses 16

Objectives, Scope, and Methodology 16

Chapter 2

Status of 

Implementation of 

the Enhancement 

Initiatives

Depot Repair Enhancement Initiative 18

Aircraft Repair Enhancement Initiative 22

Contract Repair Enhancement Initiative 24

Conclusions 27

Chapter 3

Management Issues 

Needing Attention to 

Aid Implementation of 

Reform Initiatives

Standard Organizational Structures and Process 28

Not Fully Organized

Greater Organization Support Would Enhance 30

Initiative Implementation

Standard Set of Measures Could Help In Measuring Program Impact 32

Improved Management Information Systems Would Aid in 33

Implementing and Assessing Initiatives

Greater Attention to Cost and Savings Issues Could Help 36

Avoid Premature Budget Reductions

Improved Supply Support Needed for Effective Implementation 37

of the Initiatives

New Vision for Logistics Management 42

Conclusions 43

Recommendations 44

Agency Comments and Our Evaluation 44
Contents

Page 9 GAO/NSIAD-99-63 Air Force Depot Maintenance

Appendixes Appendix I: Recent Air Force Studies on Agile Logistics 46

Appendix II: GAO Evaluation of Air Force Comments 50

Appendix III: GAO Contacts and Staff Acknowledgments 52

Related GAO Products 56

Tables Table 2.1: Stock-Numbered Reparable Items Reported Under the 19

Depot Enhancement Initiative as of September 30, 1998

Table 2.2: Number of Contracts Incorporating Selected Aspects of 26

the Contract Enhancement Initiative as of September 30, 1998

Abbreviations

AFMC Air Force Materiel Command

DLA Defense Logistics Agency

DOD Department of Defense

DRI Defense Reform Initiative

EXPRESS Execution and Prioritization of Repair Support System

IG Inspector General

QDR Quadrennial Defense Review
Page 10 GAO/NSIAD-99-63 Air Force Depot Maintenance

Chapter 1

Introduction Chapte1r

Annually, the Department of Defense (DOD) spends a reported $14 billion 

for depot-level maintenance programs and activities. DOD has recognized 

the importance of ensuring that all its logistics support activities, including 

depot maintenance, are run as efficiently and cost-effectively as possible, 

given the changed threat environment and declining budgets. In 1994, the 

Department began efforts to streamline logistics operations through the 

use of best commercial business practices. For its part in improving depot 

maintenance activities, the Air Force has three primary initiatives designed 

to provide better service to its customers by reducing repair turnaround 

times, reducing supply inventories and costs, prioritizing repairs 

appropriately, and providing spare parts rapidly. As we have noted in 

previous reports, the use of best commercial practices can result in 

improvements in the Air Force’s reengineering of logistics operations.

DOD Recognizes the 

Need to Improve Its 

Logistics Activities 

DOD has recognized that the changing threat environment and declining 

budgets require that the military services seek ways to improve the 

efficiency and cost-effectiveness of all of their logistics support activities, 

including depot maintenance. Thus, in 1994, DOD initiated efforts to 

incorporate best commercial business practices into its logistics activities. 

These initiatives were later reflected in DOD’s May 1997 Quadrennial 

Defense Review report and November 1997 Defense Reform Initiative 

report.1

 The waste and inefficiency in DOD’s logistics activities, including 

the management of its depot maintenance program, are key reasons we 

previously identified DOD’s infrastructure activities as 1 of 24 high-risk 

areas in the federal government.2

DOD components are now implementing a number of initiatives to improve 

operations and enhance the effectiveness and efficiency of their logistics 

support activities. These initiatives include competitive sourcing and 

privatization, acquisition reform, organization streamlining and 

consolidations, base realignment and closures, personnel reductions, 

inventory reduction, and management process reengineering.

1DOD undertook the Quadrennial Defense Review to comprehensively examine the national security 

threats, risks, and opportunities the United States faces from 1997 to 2015. The Defense Reform 

Initiative addressed DOD’s corporate vision for reforming its management techniques and business 

practices.

2

In 1990 we began a special effort to review and report on federal program areas we identified as high 

risk because of vulnerabilities to waste, fraud, abuse, and mismanagement. For our most recent report 

on high risk associated with DOD’s support infrastructure, see High Risk Series: Defense Infrastructure

(GAO/HR-97-7, Feb. 1997).
Chapter 1

Introduction

Page 11 GAO/NSIAD-99-63 Air Force Depot Maintenance

Legislative requirements also play a role in the management of DOD’s 

logistics activities and reengineering programs. For example, 10 U.S.C. 

section 2464 requires the Secretary of Defense to identify and maintain a 

“core”3

 logistics capability unless he waives this requirement for national 

defense reasons. The legislation states that not more than 50 percent of 

funds for depot maintenance activities may be used for the performance of 

depot maintenance by nonfederal personnel. It also states that 

DOD-performed depot maintenance and repair workloads valued at 

$3 million or more cannot be changed to contractor performance without 

the use of competing the work among public and private sector entities. 

The requirement for in-house capabilities reinforces the need to ensure 

they are efficient and cost effective. 

Structure of Air Force 

Depot Maintenance 

Operations 

Depot maintenance is a key part of the total DOD logistics system. The Air 

Force Materiel Command (AFMC) and its five air logistics centers manage 

the Air Force’s wholesale logistics system and perform depot-level 

maintenance, repair, overhaul, and modification on an array of aircraft, 

systems, weapons, and components. At Air Force bases around the world, 

base maintenance personnel make minor repairs, using replacement parts 

ordered from the centers. Broken reparable parts are sent to the centers as 

are entire aircraft and weapon systems if overhaul and modifications are 

required. Work may be done there by the military depots or contracted out 

to private sector firms. Parts used in overhaul and maintenance operations 

are manufactured almost exclusively by the private sector.

The Defense Logistics Agency (DLA) handles warehousing and distribution 

of repair parts at each of the five centers.4

 DLA manages about 93 percent 

of the consumable items that the Air Force uses. In general, new and 

repaired parts are stored at each center in DLA warehouses until they are 

needed. DLA also stores broken items until the centers’ repair shops are 

ready to fix them. Depending on the provisions of the contract, contractors 

may receive items for repair from DLA or directly from Air Force 

customers as government-furnished items, and they may purchase parts for 

3

Core is the capability, including personnel, equipment, and facilities, to ensure a timely response to a 

mobilization, national contingency, or other emergency requirement.

4

DLA is a combat support agency that provides material and supplies to the military services and 

supports their acquisition and maintenance of weapon systems and other equipment.
Chapter 1

Introduction

Page 12 GAO/NSIAD-99-63 Air Force Depot Maintenance

use in repair operations from DLA or private-sector vendors. Once a repair 

is completed, contractors can ship the items to DLA for storage and 

distribution or ship them directly to Air Force customers. 

Financial management is a key aspect of the Air Force’s logistics 

operations. Logistics activities, including depot maintenance, are financed 

through working capital funds. Under the working capital fund concept, 

activities sustain their operations by charging their customers for goods 

and services based on predetermined rates designed to recover the costs of 

operations.5

 For the Air Force, the working capital fund has two primary 

groups—the Supply Management Activity Group and Depot Maintenance 

Activity Group. 

The Supply Group supports its customers, such as Air Force depots, by 

procuring critical material and making repair parts available to the 

appropriate activities.6

 The Supply Group also manages some Air Force—

unique consumable items and almost all reparable items—those identified 

as being economical to repair at Air Force bases or at the depot level by Air 

Force-owned depots or contractors. Material is procured from vendors and 

stored until needed. The reported value of the Supply Group-managed 

items is about $2.4 billion for consumable items and about $25 billion for 

reparable items. From the Supply Group, the Depot Maintenance Group 

finances the purchase of supplies and services that are used for depot 

maintenance in-house and contracted for. We have reported that the Air 

Force's working capital funds have had long-standing financial 

management weaknesses impairing the Air Force’s ability to (1) ensure that 

customers can purchase inventory items when needed and (2) achieve the 

goals of the working capital funds, which are to focus management 

attention on the full costs of carrying out operations and to manage those 

costs effectively.7

5

Separate working capital funds exist for the Army, Navy, Air Force, and Defense-wide activities.

6The Supply Group is responsible for about two million items, including weapon system spare parts, 

fuels, food, medical-dental supplies, equipment, and uniforms.

7

Air Force Supply Management: Analysis of Activity Group’s Financial Reports, Prices, and Cash 

Management (GAO/AIMD/NSIAD-98-118, June 8, 1998).
Chapter 1

Introduction

Page 13 GAO/NSIAD-99-63 Air Force Depot Maintenance

Air Force Efforts to 

Reform Its Depot 

Operations

The Air Force recognized that it had inefficiencies in its depot maintenance 

operations. As a result of previous practices, its depots incurred net

operating losses during fiscal years 1993-97. In 1996, the Air Force began 

testing initiatives that incorporated best commercial practices designed to 

improve its depot operations, and it is now implementing those initiatives. 

Past Practices Resulted in 

Inefficiencies

While having weaknesses and limitations in precision, data systems that 

the Air Force uses to analyze its depots’ operations’ cost and productivity 

provide a general indication of inefficiencies in the current operating 

environment. On the basis of these data, the Air Force reported that for 

fiscal years 1993-97, its depots incurred a net operating loss of 

$216.7 million. For the same time, reported worker productivity remained 

relatively constant. Although the Air Force has not formally analyzed why 

this situation has not improved, it has observed several contributors. 

Among these have been difficulties in forecasting future workloads, setting 

appropriate rates to recover costs, and underutilizing depot industrial 

repair and overhaul facilities. Underuse of these facilities increases costs of 

operations because the depot infrastructure is larger than needed to 

accomplish identified maintenance workloads. Using current and future 

workload estimates, AFMC headquarters officials projected that, for fiscal 

year 1999, its depots have about 18 percent excess capacity in facilities and 

equipment.8

 However, we reported that using criteria established during 

the 1995 base realignment and closure process, excess capacity in the five 

Air Force depots was closer to 65 percent in 1999.9

 The impending closure 

of two of the five depots should reduce some of this excess.

Air Force Plans for 

Reengineering Logistics 

Activities

Under an umbrella concept initially called Lean Logistics but later renamed 

Agile Logistics, the Air Force began exploring ways to adopt concepts and 

practices used in the private sector commercial firms to reengineer costly 

8DOD’s estimates are determined by dividing projected workload of about 22 million hours for fiscal 

year 1999 by the amount of available capacity estimated at 27 million hours. DOD normally measures 

capacity by an analysis that constrains facility and equipment capacity availability by the availability of 

trained personnel and the organization of work stations, assuming an 8-hour work day and a 

5-day-a-week operation. During the 1995 base realignment and closure process, DOD used a measure 

called maximum potential capability that was intended to capture the potential capacity of industrial 

facilities and equipment unconstrained by the number of trained personnel currently assigned to these 

facilities. 

9

Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in Restructuring Its Depot 

Maintenance Program (GAO/T-NSIAD-97-111, Mar. 18, 1997). 
Chapter 1

Introduction

Page 14 GAO/NSIAD-99-63 Air Force Depot Maintenance

and inefficient logistics activities. Using the Agile Logistics program as the 

cornerstone for improving its logistics activities, the Air Force began to 

consider ways to

• expedite the repair of components and aircraft, 

• reduce the amount and costs of supply inventories, 

• match the repair of items with the demand from customers, 

• prioritize repairs when multiple priorities exist, 

• rapidly move components and spare parts to and from customers, and

• improve contracting for logistics support. 

 The Air Force’s efforts to implement Agile Logistics ultimately focused on 

three specific initiatives for reforming current logistics activities—the 

depot repair enhancement initiative, the aircraft repair enhancement 

initiative, and the contract repair enhancement initiative. These initiatives 

are targeted at specific areas of maintenance noted above, but they are 

intended to address all logistics activities necessary for effective support of 

the warfighter.

Depot Enhancement Initiative The depot enhancement initiative affects the repair of reparable spare parts 

such as aircraft landing gears, wheels, and avionics. This initiative seeks to 

reengineer the old “batch processing” approach by repairing only the items 

for which customers have an immediate need. The initiative also seeks to 

improve support to depot customers by meeting their needs for 

components on a faster basis—reducing the requirement to store 

additional inventory in anticipation of need. Under the depot enhancement 

initiative, depots prioritize repairs on a daily basis, using automated 

systems that establish the next day’s repair requirements and distribution 

priorities. Also, the Air Force expected to change the depots’ organizational 

structures by placing key supply and maintenance personnel under a single 

manager, rather than having them reporting to several managers. This new 

approach was to be more conducive to effective teamwork and 

communication for reparable item management.

Aircraft Enhancement Initiative The aircraft enhancement initiative is for aircraft that are periodically 

scheduled or programmed for extensive maintenance at Air Force depots 

to keep them operational or to upgrade their capabilities. The initiative was 

designed to improve repair turnaround times for these aircraft. This was to 

be accomplished by reengineering the existing repair process to improve 

teamwork and communication for more effective management of supply 
Chapter 1

Introduction

Page 15 GAO/NSIAD-99-63 Air Force Depot Maintenance

and maintenance during the programmed maintenance process. The 

concept of matching repair with demand did not apply to the aircraft 

initiative since aircraft are prescheduled for this extensive maintenance. 

Contract Enhancement Initiative The contract enhancement initiative applies to depot reparable workloads 

performed by contractors. Like the depot initiative, this initiative also 

called for improving operational performance by reducing repair 

turnaround times and doing repairs on demand. The Air Force’s logistics 

centers were to apply the new initiative to terms of existing and future 

contracts whenever possible. 

Previous GAO 

Observation on Air 

Force Agile Logistics 

Initiatives

We have previously recommended that the Air Force reengineer its 

logistics activities, and we identified additional best commercial practices 

that could result in further improvements. In our February 1996 report on 

the Air Force reengineering efforts,10 we generally supported the Air 

Force's reengineering efforts. Noting that some of the results to date were 

promising, we concluded that the Air Force efforts should be supported 

and expanded. We also noted that the success of the Air Force in achieving 

a “quantum leap” in system improvements hinged on its ability to address 

and overcome certain barriers, such as inherent organizational resistance 

to change.

In agreeing with our previous recommendations to build on the existing Air 

Force reengineering efforts, DOD stated that the Air Force’s logistics 

reform strategy should receive top-level DOD support in achieving its 

goals. DOD also agreed that the Air Force should consider adding other 

leading-edge logistics concepts into its reengineering efforts, for example, 

installing commercially available management information systems to 

track inventory amounts, location, condition, and requirements and 

reorganizing depot workshops to reduce the time it takes to repair 

components. The Air Force enhancement initiatives represent efforts to 

deal with these issues.

10Best Management Practices: Reengineering the Air Force’s Logistics System Can Yield Substantial 

Savings (GAO/NSIAD-96-5, Feb. 21, 1996).
Chapter 1

Introduction

Page 16 GAO/NSIAD-99-63 Air Force Depot Maintenance

Recent Air Force 

Analyses

Two recent Air Force studies—an Air Force Inspector General report (Dec. 

1997) on the implementation and maturity of Agile Logistics and the effect 

of the initiatives on combat readiness and an Air Force board report (Mar. 

1998) on the management of reparable spares—identify weaknesses in the 

Air Force’s implementation of its enhancement initiatives. They also show 

that the Air Force has a number of significant issues to address if it is to 

succeed in its reengineering efforts. Appendix I provides additional details 

from these reports. 

Objectives, Scope, and 

Methodology

As requested by the Chairman and Ranking Minority Member, 

Subcommittee on Readiness, Senate Armed Services Committee, we 

reviewed the status of the Air Force’s three depot maintenance 

enhancement initiatives and management issues related to the initiatives. 

Although the Air Force’s management data and accounting systems have 

many problems that can affect their reliability, Air Force officials use them 

to manage and track their logistics and other programs. They provide the 

best available trend information on depot maintenance effectiveness and 

efficiency. We used this data in analyzing the Air Force’s reported financial 

and productivity measures for fiscal years 1993-97. We did not 

independently test the accuracy of this data or any data on logistics 

operations AFMC headquarters or its centers provided. We also reviewed 

AFMC and center business plans for the Air Force working capital funds to 

identify program budget issues and costs of operations. 

To determine the status of the enhancement initiatives’ implementation, we 

analyzed AFMC and center (1) program management plans, (2) analyses of 

costs and benefits of the depot initiative prototype demonstration, 

(3) performance indicator reports that were used for maintenance shops 

participating in the prototype demonstration, and (4) reports on initiative 

implementation and results being achieved. We examined AFMC and 

center analyses of automated system requirements, reports of problems 

encountered during initiative implementation, and the status of corrective 

actions planned or taken. We also interviewed logistics managers and 

depot mangers at AFMC and three air logistics centers to obtain their views 

on the logistics enhancement initiatives, the impact the program was 

having or expected to have on depot maintenance operations, and other 

related logistics issues. In addition, we interviewed DLA headquarters 

officials to discuss DLA’s role in the Air Force’s reengineering initiatives 

and specific issues related to DLA supply support at the Air Force centers. 
Chapter 1

Introduction

Page 17 GAO/NSIAD-99-63 Air Force Depot Maintenance

We made extensive use of our prior work in identifying and evaluating 

issues that challenge the Air Force’s success in implementing the Agile 

Logistics initiatives. We also reviewed recent studies of the Agile Logistics 

Program by the Air Force Inspector General and a group of active and 

retired military representatives and private industry representatives 

appointed by the AFMC Commander to evaluate AFMC’s management of 

reparable items.

We performed work at AFMC, Wright-Patterson Air Force Base, Dayton, 

Ohio; Warner Robins Air Logistics Center, Warner Robins, Georgia; Ogden 

Air Logistics Center, Hill Air Force Base, Ogden, Utah; and Oklahoma City 

Air Logistics Center, Tinker Air Force Base, Oklahoma City, Oklahoma. We 

did not visit the two remaining centers—Sacramento Air Logistics Center, 

McClellan Air Force Base, Sacramento, California, and San Antonio Air 

Logistics Center, Kelly Air Force Base, Texas—because of their impending 

closure. 

We conducted our review from October 1997 to March 1999 in accordance 

with generally accepted government auditing standards.
Page 18 GAO/NSIAD-99-63 Air Force Depot Maintenance

Chapter 2

Status of Implementation of the Enhancement 

Initiatives Chapte2r

The Air Force’s plans for implementing its enhancement initiatives were 

largely focused on broad concepts and principles to implement the 

initiatives and achieve the intended improvements. Included in the 

approach to implementation was use of standard organizational structures 

and employee position descriptions, a description of the new process, and 

an assessment of required automated system support. Currently, the Air 

Force is in the process of implementing the three initiatives. 

In its plans for implementation, the Air Force did not establish clear and 

consistent measures to facilitate tracking progress and measuring the 

success of the initiatives. Thus, it cannot conclusively determine whether 

the goals of the Agile Logistics program, that is, increased operational 

efficiency and reduced costs, are being achieved. However, limited 

information indicates that the initiatives have been implemented piecemeal 

and have had mixed results. As discussed in chapter 3, key management 

changes, including the addition of measures for determining the 

achievement of initiative goals, could facilitate implementation of the 

initiatives and provide for a clearer evaluation of the implementation.

Depot Repair 

Enhancement Initiative

Implementation status: Partial implementation.

Reported results: Some improvement in supply status; mixed results in 

maintenance activities.

As noted, the depot enhancement initiative pertained to the repair of 

reparable spare parts such as aircraft landing gears, wheels, and avionics, 

with an emphasis on meeting customer needs for components on a faster 

basis. This initiative has been applied to about one-third of the Air Force’s 

stock-numbered depot reparable items. AFMC officials continue to assess 

the extent to which other items should be brought under the initiative.

Implementation History The depot enhancement initiative began as an AFMC headquarterssponsored prototype effort from June 1996 to June 1997 and afterward was 

expanded AFMC-wide. For the prototype effort, AFMC selected 10 depot 

shops, 2 at each of the 5 centers. The prototype effort included a workload 

of less than 1 percent of the Air Force’s inventory of reparable items. AFMC 

required the five centers to collect and report data in four areas: customer 

impact, responsiveness to the customer, repair depot efficiency, and 
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 19 GAO/NSIAD-99-63 Air Force Depot Maintenance

operating costs. AFMC used this data to conduct a cost/benefit analysis of 

the prototype program and to determine whether the initiative should be 

expanded Air Force-wide.

AFMC expanded the initiative AFMC-wide beginning in June 1997. As of 

September 30, 1998, the three AFMC centers we visited reported that they 

had applied the depot initiative to about 31 percent of the stock-numbered 

reparable items they managed, representing about 68 percent of the items’ 

total dollar value. Table 2.1 provides details regarding the extent to which 

the three centers applied the depot enhancement initiative to their 

reparable stock-numbered items. 

Table 2.1: Stock-Numbered Reparable Items Reported Under the Depot 

Enhancement Initiative as of September 30, 1998 

Source: Data provided by each center.

Officials at the centers we visited identified several types of items that are 

not yet included in the depot enhancement initiative. For example, they 

have not included items with low or infrequent demands, items that have 

dual sources of repair, and items that are on aircraft undergoing 

programmed depot maintenance. Center officials said that they recognized 

many additional items should be added to the initiative and they were 

trying to identify those items. AFMC has not made final decisions as to 

whether some of the items included in the initiative were not good 

candidates. AFMC officials said that unique considerations such as long 

lead times, repair complexities, or the routine size of the daily repair 

schedule suggest that repair forecasting may in some cases be more cost 

effective than daily demand schedules called for by the initiative.

Dollars in millions

Reparable items

managed

Items under the

enhancement

initiative Percent

Center

Total

number

Total

 value

Total

number

Total

value

Initiative

items to

 total

Value of

initiative items

to total

Ogden 23,391 $4,227.6 3,057 $300.4 13 7

Ok. City 14,833 226.1 2,509 85.9 17 38

Warner Robins 39,443 11,220.0 18,335 10,325.0 46 92

Total 77,667 $15,674.7 23,901 $10,711.3 31 68
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 20 GAO/NSIAD-99-63 Air Force Depot Maintenance

Supply Availability Available data collected during the prototype period (June 1996 to June 

1997) showed that the number of components awaiting repair due to the 

lack of spare parts decreased 25 percent. This data essentially indicated 

that more repair parts were available to complete needed component 

repairs—a measurement of improvement in the supply function.

Change in Maintenance 

Processes

Implementation of a repair-on-demand concept was a significant change 

from the previous Air Force process. Under the old system, repair levels 

were negotiated quarterly based on projections of what items would fail or 

require scheduled repair. The new system requires daily changes in 

maintenance processes in response to the latest assessment of the most 

urgent requirements. According to maintenance officials at the three 

centers, this change initially disrupted the maintenance process throughout 

the shops participating in the pilot effort. Available data collected during 

the prototype period showed that the average repair time increased in 6 of 

the 10 shops; 2 of the 6 shops’ repair times increased over 100 percent.

In its October 1997 report, an AFMC analysis group found that after the 

year-long depot enhancement prototype initiative, performance indicators 

showed negative trends for some maintenance shops. For example, the 

total number of aircraft that were reported as mission incapable was 

50 percent higher than before the initiative, and the total number of hours 

these aircraft remained mission incapable increased by 77 percent. 

However, this performance could have been partly the result of an Air 

Force-wide problem in fiscal year 1997 involving underfunding of inventory 

requirements. This issue is addressed more fully in a separate report on the 

Air Force's Supply Management Group.1

Overall, AFMC’s analysis of the prototype effort showed that conditions 

related to shop performance and cost outcomes generally worsened during 

the prototype period, even though the depots were operating under 

enhanced conditions that were not representative of the normal repair 

environment. For instance, some shops were allowed to add additional 

workers, others were fully funded for repair work, and some shops had 

piece parts required for component repair already in place to avoid delays 

due to awaiting parts. These conditions would not exist once the initiative 

was expanded AFMC-wide. 

1

Air Force Supply: Management Actions Create Spare Shortages and Operational Problems

(GAO/NSIAD/AIMD-99-77, Apr. 29, 1999).
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 21 GAO/NSIAD-99-63 Air Force Depot Maintenance

We observed that because of the enhanced conditions, such as fully funding 

the repair work and having piece parts already in place, one shop at the 

Warner Robins Center was able to reduce the frequency that aircraft were 

reported as mission incapable2

 due to maintenance problems. After the 

prototype demonstration ended and the special conditions were 

eliminated, the number of hours that aircraft were mission incapable 

increased, though not to as high a level as when the prototype period 

began. For example, when the shop began the prototype initiative, the 

number of mission incapable hours reported was about 2,700. This number 

fluctuated during the 12-month prototype period, but at the end of the 

period in June 1997, the total number of mission incapable hours reported 

was 324. After the prototype period ended, the mission incapable hours 

began increasing, and for the 5-month period August to December 1997 

averaged 1,938 hours.

Results of Initiative Since 

the Prototype 

In analyzing project data as of September 30, 1998, we found that results 

achieved at various AFMC centers continues to be mixed. For instance:

• Officials in the Ogden center’s depot avionics shop reported that 

between October 1997 and September 1998, the depot reduced by 45 and 

38 percent, respectively, the number of times and hours that aircraft 

were reported as mission incapable because the shop did not provide a 

reparable item in a timely manner. For the same period of time, the shop 

had little or no improvement in other areas such as repair times.

• Officials at the Oklahoma City center reported that between March 1998 

and September 1998, the availability of reparable components to baselevel customers increased by 22 percent. For the same time period, the 

number of times that aircraft were reported as mission incapable 

decreased by 8 percent, but the number of hours during which they 

were incapable increased by 28 percent.

• Officials at the Warner Robins center reported that the number of 

aircraft that were mission incapable fluctuated throughout the year, but 

increased 10 percent overall for the period October 1997 to September 

2

The Air Force measures the availability of aircraft through the use of mission-capable rates that 

represent the reported percent of unit aircraft that are capable of performing at least one of their 

assigned missions. Aircraft that are not capable of accomplishing any of the missions are classified as 

(1) “not mission capable supply” if they cannot accomplish the missions because of parts shortages, 

(2) “not mission capable maintenance” if they cannot accomplish the missions because of required 

base-level maintenance, or (3) “not mission capable both” if both parts problems and required 

base-level maintenance are preventing the aircraft from accomplishing the missions. 
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 22 GAO/NSIAD-99-63 Air Force Depot Maintenance

1998; the number of hours incapable increased 12 percent. Other depot 

performance measures did not show significant improvement.

According to AFMC officials, difficulties in obtaining repair parts when 

needed were a key factor in the maintenance depots’ inabilities to reduce 

repair times.

Aircraft Repair 

Enhancement Initiative

Implementation status: Partial implementation.

Reported results: Reduced programmed aircraft maintenance time.

As noted, the aircraft repair enhancement initiative affects aircraft that are 

periodically scheduled or programmed for extensive maintenance at Air 

Force depots, and emphasized faster turnaround times for this 

maintenance. Implementation of this initiative has been piecemeal and 

incomplete, largely because of resource constraints. Officials at the three 

centers believed that the initiative was having a positive impact on 

improving the time and costs of periodic programmed maintenance of 

aircraft. Due to a lack of data, however, it is unclear to what extent the 

initiative has resulted in these improvements or what cost savings may 

have resulted. The Air Force has not decided whether this initiative should 

be applied to all aircraft.

Implementation History The aircraft enhancement initiative began as a joint effort by the Oklahoma 

City and Warner Robins centers in March 1996. AFMC headquarters later 

assumed leadership of this initiative in August 1998. 

Because AFMC made the depot enhancement initiative a higher priority, 

resources for implementing the aircraft enhancement initiative were 

constrained. Therefore, rather than reengineer the entire process for 

programmed depot maintenance, the centers emphasized identifying the 

most immediate problems that could be corrected and applying quick fixes 

that could be executed with available resources. They repeated this cycle 

for the next most pressing issues. Officials at the three centers estimated 

that as of October 1, 1998, the date that AFMC directed them to formally 

implement the program, the initiative had been used on an average of 

65 percent of the 10 aircraft systems that received periodic programmed 

depot maintenance. 
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 23 GAO/NSIAD-99-63 Air Force Depot Maintenance

Results of the Initiative Officials at the three AFMC centers believed that, due to the aircraft 

initiative, they have reduced the time needed to complete tasks during 

programmed depot maintenance for some aircraft. For example:

• Officials at the Ogden depot reported that the aircraft initiative 

facilitated innovative approaches in work on C-130 aircraft that reduced 

the aircraft stripping and painting time by 200 hours. 

• Officials at the Oklahoma City depot noted that their workload for the 

E-3 aircraft increased 100 percent over the last 3 fiscal years because of 

the need for modifications, upgrades, and more extensive repairs aging 

aircraft need. Although they anticipated a corresponding increase in 

repair times, under the initiative they accomplished the increased 

workload more efficiently with an actual increase in repair time of only 

46 percent.

• Officials at the Warner Robins Center reported that they had reduced 

programmed depot maintenance time for the F-15 about 42 percent, 

from 154 to 89 days. They also reported that using the aircraft initiative’s 

principles helped them to win a public-private competition for 

maintenance on the C-5 aircraft. For fiscal year 1997, center officials 

reported that quicker turnaround times allowed them to reduce the 

number of other aircraft at the center awaiting or undergoing 

programmed depot maintenance, thus freeing up depot maintenance 

capacity to accommodate the C-5 work.

In analyzing the reported initiative results, we observed that none of the 

three centers had calculated the amount of cost reductions that could be 

attributed to use of the aircraft enhancement initiative. Officials at all three 

centers told us that they do not yet have sufficient systems in place to track 

actual reductions in costs. They anticipated that these systems would be in 

place during fiscal year 1999. However, they believed that the centers can 

achieve reductions in aircraft repair times by using principles of the aircraft 

enhancement initiative without adding costs.

Issues Associated With 

Future Application of the 

Initiative

The Air Force factors depot maintenance time into aircraft fleet 

requirements to ensure that sufficient aircraft are available to meet mission 

requirements while providing adequate time to provide needed 

maintenance. Consequently, while not a goal of the initiative, the Air Force 

may be able to reduce its aircraft inventory through the use of the initiative, 

since accomplishing maintenance more quickly could reduce the number 

of aircraft required to meet mission needs. Further, a smaller inventory of 

aircraft should allow the Air Force to reduce the costs of holding and 
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 24 GAO/NSIAD-99-63 Air Force Depot Maintenance

maintaining aircraft. Whether reductions in turnaround time will ultimately 

allow the Air Force to reduce its inventory of aircraft is unclear.

Also, according to an AFMC headquarters official, the Air Force and AFMC 

headquarters have not determined whether the initiative should be applied 

to all programmed depot maintenance aircraft or the extent to which 

aircraft inventories should be reduced as a result of faster repairs. AFMC 

officials stated that, when evaluating whether to implement proposed 

maintenance time reduction activities, it is important to evaluate the costeffectiveness of the time reduction activities, determining whether 

additional costs are involved in achieving reductions in repair times.

Another consequence of reduced repair turnaround times is an expansion 

of excess depot capacity. Action could be needed to deal with current and 

additional future excess capacity to minimize overhead costs. The Air 

Force believes that the reduction from five to three depots would eliminate 

any potential excess capacity related to aircraft hangar space.

Contract Repair 

Enhancement Initiative 

Implementation status: Partial implementation.

Reported results: Reduced costs and repair times.

As noted, the contract repair enhancement initiative applies to depot 

reparable workloads performed by contractors and emphasizes reducing 

repair turnaround times. Application of this initiative involves contract 

restructuring or modifications as necessary, or incorporating applicable 

provisions in new contracts. Implementation of this initiative has varied at 

each AFMC center, with most use being made by the Warner Robins center. 

Although officials report improvements in contract costs and turnaround 

times, the Air Force has no system for tracking whether reported results 

are actually being achieved. Also, the issue of whether the initiative should 

be applied to all contracts has not been decided.

Implementation History The contract enhancement initiative was officially adopted in January 1997 

after having been applied to a small number of contracts at each of the 

centers beginning in May 1996. During the pilot effort, the five centers 

applied aspects of the contract initiative to 14 contracts—1 at the Ogden 

center, 4 at the Oklahoma City center, 5 at the San Antonio center, 1 at the 

Sacramento center, and 3 at the Warner Robins center. Although the 
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 25 GAO/NSIAD-99-63 Air Force Depot Maintenance

centers did not prepare cost/benefit analyses, they concluded that the 

initiative could be useful in reducing repair times and costs. 

AFMC headquarters’ implementation approach was to identify and 

prioritize assets for repair, similar to the depot enhancement initiative. 

Under the contract initiative, AFMC centers hoped to reduce repair 

turnaround times by enhancing contractor performance whenever possible 

by (1) establishing priorities for the release of parts to the repair line to 

support the repair of items with the highest need, (2) encouraging 

contractors to obtain repair parts in advance to help minimize the time that 

components await parts, (3) using parts from less critical components to 

repair more critical ones, and (4) allowing contractors to reclaim usable 

parts from condemned components, thus reducing costs and returning 

assets to operational units in a shorter period of time. Additionally, AFMC 

headquarters and the centers identified several actions to be taken when 

contracting for the repair of reparable items with the overall goal of 

reducing repair times, contract repair costs, and eliminating excess 

inventory. These actions included allowing contractors to become more 

involved in the planning process such as helping develop the scope of 

work; using incentives to increase contractor performance; and negotiating 

longer-term performance periods.

Application of the Contract 

Initiative

As of September 30, 1998, the three centers reported that they had applied 

some aspects of the enhancement initiative to 258 maintenance contracts—

about 61 percent of 421 contracts that were in effect at that time. As shown 

in table 2.2, the Warner Robins center, which was the first center to use this 

initiative, has applied the initiative to more contracts than the other two. 

Most contracts focused on the goals of reducing repair time and fast 

transportation of the components needing repair from and to the 

customers.
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 26 GAO/NSIAD-99-63 Air Force Depot Maintenance

Table 2.2: Contracts Including Selected Goals of the Contract Enhancement 

Initiative as of September 30, 1998 

Note: Individual aspects of the initiative were applied to more than one contract.

Source: Data provided by each center.

Like the depot repair enhancement initiative, the contract repair 

enhancement initiative was originally intended to use a daily forecast for 

repairs on demand. However, none of the centers had implemented the 

concept of daily repair on demand. AFMC headquarters allowed the 

centers to adopt a longer forecast period because automated data systems 

were not yet adequate to support contract repair-on-demand.

The Warner Robins center was the only center using a prototype planning 

tool for automating the identification and prioritization of work to be done 

under contract. However, the prototype allows use of a 30-day forecast for 

repair contractors, while the Air Force depots were expected to respond to 

daily forecast changes. Oklahoma City and Ogden officials said they did not 

believe it was practicable to adjust contract workloads frequently. They 

said that depot maintenance contractors want to know in advance what the 

workload will be so that they can stabilize their workforce and ensure they 

have required parts available. 

Results of Initiative Officials at the three centers reported to AFMC headquarters their 

estimated impact of the contract repair initiative in reducing repair time, 

maintenance costs, and inventories of reparable items. However, it is 

difficult to assess these reported estimates of success because the centers 

had no system for tracking actual results. An AFMC program official said 

that AFMC headquarters was evaluating the interfaces needed between 

automated systems to be able to measure outcomes such as turnaround 

time reductions.

Goals 

Contracts

at Ogden

Contracts at

Oklahoma City

Contracts at

Warner Robins Total

Reduce repair time 18 22 85 125

Reduce inventories 1 2 10 13

Reduce repair costs 1 7 40 48

Repair on demand 3 2 81 86

Fast transportation 2 53 94 149
Chapter 2

Status of Implementation of the 

Enhancement Initiatives

Page 27 GAO/NSIAD-99-63 Air Force Depot Maintenance

Although no overall quantifiable data readily exists, center officials cited 

examples they believed showed that the application of the initiative 

allowed them to reduce contract costs and repair turnaround times. For 

example, the Warner Robins center reported that it reduced costs on a 

contract for the F-15 aircraft’s radar system by $450,000 and avoided costs 

of about $1.4 million for the C-130 aircraft due to overall improvements in 

the repair process. An Ogden center official told us that use of the initiative 

had benefited the center through improved teamwork, greater contractor 

involvement in the process, and reduced time spent processing paperwork.

Issues Associated With 

Future Application of the 

Initiative

An important issue associated with future use of the initiative is the extent 

to which contractors can be encouraged to accept and implement the 

initiative objectives. According to a Warner Robins official responsible for 

overseeing the initiative’s implementation, the repair-on-demand concept 

could be disruptive for contractors because fluctuations in the workload 

require them to accept more flexible and potentially more costly working 

arrangements than they currently use. Also, he said that the Air Force 

would likely face difficulties in obtaining contractors’ voluntary acceptance 

of some major changes, such as the use of contractor funds for obtaining 

repair parts in advance to reduce turnaround times, and taking other 

actions necessary to improve the efficiency of their operations. Such 

changes could require contract modifications, which could result in 

increased costs.

Conclusions Each of the three initiatives are in various stages of implementation. 

However, only broad goals were established for the initiatives and the Air 

Force did not establish tracking measures to assess whether the three 

depot enhancement initiatives were achieving the desired results. While 

there are indications of some positive outcomes, the initiatives have not yet 

achieved the desired goals of increased operational efficiency and reduced 

costs. Chapter 3 discusses issues that must be addressed to facilitate 

implementation of the initiatives and provide a clearer basis for assessing 

results.
Page 28 GAO/NSIAD-99-63 Air Force Depot Maintenance

Chapter 3

Management Issues Need Attention to Aid 

Implementation of Reform Initiatives Chapte3r

The implementation of the three initiatives could be enhanced if the Air 

Force took management action to (1) set up organizational structures and 

processes as originally planned, (2) support initiative implementation, 

(3) develop standard measures to assess performance, (4) improve 

automated management information systems, (5) avoid premature budget 

reductions, and (6) improve supply management support. Addressing these 

issues is vital to the success of AFMC headquarters’ vision for 

reengineering its logistics activities. AFMC headquarters has recently 

adopted a new vision for logistics management but has not yet made clear 

how this new vision will be integrated with or address the management 

issues associated with the three ongoing reengineering initiatives.

Standard 

Organizational 

Structures and Process 

Not Fully Implemented

Our prior assessments of Defense reform initiatives have noted the 

difficulties of implementing reforms when corrective actions require the 

development and use of common systems and processes across 

organizational boundaries.1

 An objective of the enhancement initiatives 

was to improve the effectiveness and efficiency of depot operations 

through the use of standard organizational structures and processes. This 

objective has not been fully achieved because the centers have not fully 

incorporated standardization requirements into their maintenance and 

supply organizations. Lack of standardization among the centers for the 

aircraft enhancement initiative program is partly due to the fact that the 

initiative was originally center-sponsored and only came under direct 

AFMC oversight in August 1998. AFMC has expressed interest in closer 

integration of the programs, which could facilitate greater standardization.

Advantages of Standard 

Structures and Processes

According to an AFMC official, implementing the enhancement initiatives 

with standardized organizational structures and processes would allow 

depot workers to be moved within and among the depots without the costs 

and time delays for training or for learning a new process or management 

structure. Standardization also would help (1) provide managers and 

workers a common understanding of program objectives and (2) simplify 

program management and oversight by having standard operating 

procedures that allow AFMC-wide refinements without the added costs 

and time to tailor such actions to individual operations at the Air Force 

depots. Officials also said that a waiver of the standardization requirements 

would be approved if the impact of a center’s request did not significantly 

change the standard requirements.

1

Defense Reform Initiative: Organization, Status, and Challenges (GAO/NSIAD-99-87, Apr. 21, 1999). 
Chapter 3

Management Issues Need Attention to Aid 

Implementation of Reform Initiatives

Page 29 GAO/NSIAD-99-63 Air Force Depot Maintenance

While the depot enhancement prototype initiative was under way, AFMC 

began developing an implementation plan that provided broad direction on 

the use of a standard process and organizational structure for AFMC depot 

facilities, as well as position descriptions, for converting depot shops to the 

new process. For example, the new organizational structure called for 

collocation of supply managers, item managers, and other key players with 

a single manager over both supply and maintenance operations. The new 

structure placed accountability and authority with a single manager to 

remove impediments and constraints to the repair of items.

The two centers that sponsored the aircraft enhancement initiative did not 

develop a detailed plan for implementing it, but they did prepare a manual 

in July 1996 that described the initiative’s management structure. This 

structure, referred to as the weapons system support center, called for 

collocation of key individuals in planning, supply, contracting, and 

engineering support. The centers expected that, as the focal point for parts, 

tools, and equipment, this management structure would improve teamwork 

and communication for more effective management of supply and 

maintenance issues during the programmed depot maintenance process.

AFMC Has Identified Need 

for Greater Efforts in This 

Area

Although program officials at AFMC said that standardization is necessary 

for the Air Force to have an effective depot enhancement initiative, the 

centers were ultimately responsible for determining how they would 

implement the initiative. The centers implemented the following structures 

with the following variations:

• Officials at the Ogden depot established two shop service centers rather 

than one standard center because the maintenance workload was not 

housed in a single location and they believed that repair processes 

should be tailored to the depot's unique work requirements. As of 

December 1998, the depot had made six requests to deviate from the 

standardization process: AFMC approved one, and five were pending.

• Officials at the Oklahoma City depot decided that their service center 

chief would report to a material manager instead of the standard repair 

manager position because they believed the material manager was in the 

best position to be a problem solver. In April 1998, AFMC headquarters 

denied the depot's request to make this change, and as of December 

1998, the depot was implementing the standard structure.

• Officials at the Warner Robins depot changed some standard position 

requirements by using nonstandard positions such as supply technicians 

and material handlers. In their opinion, their structure recognized the 
Chapter 3

Management Issues Need Attention to Aid 

Implementation of Reform Initiatives

Page 30 GAO/NSIAD-99-63 Air Force Depot Maintenance

need to use less costly positions to support standardization 

requirements. As of December 1998, AFMC headquarters had not 

approved the depot’s request to add these nonstandard positions.

In September 1998, after AFMC assumed management control of the 

aircraft enhancement initiative, it directed the centers to follow a standard 

organizational structure with standard personnel descriptions for the 

support center. In early 1999, AFMC headquarters officials evaluated the 

extent to which the three centers had implemented the standard and found 

mixed results. They found that implementation of objective standardized 

structures at Warner Robins, Ogden, and Oklahoma City was about 

70 percent, 30 percent, and 5-10 percent complete, respectively. AFMC 

officials told us that they expected to further evaluate progress in this area 

next year.

AFMC headquarters officials have stated that they want closer integration 

of the three initiatives in the future. Management and oversight for both 

depot and contractor repair options could be enhanced to the extent that 

both sources of repair can use the same system tools, be monitored by the 

same measures, and make repairs to the items using the same logic rules. 

While recognizing this, AFMC headquarters has not yet outlined how or 

when they expect to better integrate management of the three initiatives.

Greater Organization 

Support Would 

Enhance Initiative 

Implementation

Our prior work examining Defense reform initiatives has also noted the 

importance of top management commitment and sustained support for 

reform initiatives, and overcoming cultural barriers and resistance to 

change. The Air Force has recognized that its corporate culture is an 

important factor in whether it achieves its reengineering goals. AFMC 

believes that changing the mindset of the current workforce will be a 

challenge because (1) its organizations have often found change 

threatening and have been unwilling to modify behavior until proposed 

ideas are proven, (2) the enhancement initiatives call for organizational and 

process changes and many personnel have difficulty understanding how 

they will be affected and are reluctant to embrace the initiatives, and 

(3) essential employee groups have not yet fully supported the 

implementation of the new initiatives. Particularly important is 

management emphasis on workers becoming skilled in multiple areas and 

greater worker flexibility in work assignments. Also, as we stated in our 

February 1996 report on the Air Force’s reengineering efforts, top-level 

management has not always provided the support necessary for successful 

implementation of the reengineering initiatives.
Chapter 3

Management Issues Need Attention to Aid 

Implementation of Reform Initiatives

Page 31 GAO/NSIAD-99-63 Air Force Depot Maintenance

A key need, according to AFMC’s plan for implementing the depot 

initiative, is for workers to be multiskilled. Our prior work has shown that 

multiskilling can be an important concept in fostering improved worker 

productivity.2

 A multiskilled workforce gives depot managers the flexibility 

to shift workers among different skill areas and offers better opportunities 

to effectively move workers to areas with increased workloads. According 

to depot officials, the ability to shift workers among various tasks allows 

them to adjust to unanticipated work stoppages due to parts shortages, 

technical problems, temporary labor imbalances, or changes in work 

priorities. Without a multiskilled staff, AFMC officials believe it will be 

difficult to efficiently manage a repair-on-demand logistics system where 

workload instability is likely to increase. However, the centers do not yet 

have many workers trained to perform multiple tasks. Officials at the three 

centers we visited estimated that only about 10 percent of their workers 

were multiskilled because employee bargaining agreements between Air 

Force management and worker unions generally have not supported this 

concept.

Currently, depot workers are trained in specific technical areas and 

perform work within their specific specialization, and labor agreements 

usually require that workers only perform work in their specialized area. 

Therefore, depot managers have limited ability to move workers to other 

areas when there are unanticipated changes in work priorities. According 

to an AFMC headquarters official, the Command has made progress by 

negotiating an agreement on training the workforce to perform multiple 

tasks. However, officials at the centers we visited said that they had made 

little progress in training workers because of the cost and time involved.

In a previous report, we noted that the Navy adopted a program to improve 

its cost-effectiveness and responsiveness through multiskilling at an 

intermediate repair activity in Pearl Harbor, Hawaii.3

 When the Navy 

transferred civilians from the shipyard to an intermediate activity at the 

same location, it implemented a program to train workers in a second 

complementary skill area, allowing them to perform multiple tasks. 

Maintenance facility managers said under this program, they used a limited 

number of workers more cost-effectively and were more responsive to 

2Army Industrial Facilities: Workforce Requirements and Related Issues Affecting Depots and Arsenals

(GAO/NSIAD-99-31, Nov. 30, 1998).

3

Army Industrial Facilities: Workforce Requirements and Related Issues Affecting Depots and Arsenals

(GAO/NSIAD-99-31, Nov. 30, 1998).
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emerging requirements. The shipyard and intermediate repair activity at 

Pearl Harbor is attempting to expand on the program to improve 

productivity and reduce costs. We are evaluating this effort as a part of a 

separate review.

Standard Set of 

Measures Could Help 

in Measuring Program 

Impact

Our prior reporting on Defense reform initiatives has also shown the 

importance of clear results oriented goals and performance measures. The 

Air Force's Baseline Agile Logistics Master Plan and Road Map cited the 

need for performance measures to provide management with information 

that will “identify problems, suggest solutions, lead to changes in behavior, 

and set or reset correct incentives at all levels of operations.” While some 

initial steps were taken to develop such measures for the depot 

enhancement initiative, they were not completed, nor were measures 

developed for the other initiatives.

While AFMC headquarters developed some initial measures to assess the 

performance of its depot enhancement prototype initiative, they were used 

in a limited way initially and were later dropped as the initiative was 

expanded AFMC-wide. AFMC headquarters and its centers were unable to 

agree on appropriate measures of performance associated with the 

initiatives. AFMC has collected some measures that provide partial 

information on the three enhancement initiatives, but it lacks standard 

measures that would provide a comprehensive perspective on the 

initiatives’ performance and their impact on the overall logistics system. 

Available measures developed by the individual centers offer limited 

insight into the collective performance impact of the depot, aircraft, and 

contract enhancement initiatives.

AFMC headquarters and the centers collect data on a number of measures 

for evaluating performance aspects of the overall supply and maintenance 

functions, but not specifically for the enhancement initiatives. In the 

absence of initiative specific measures and because the enhancement 

initiatives have been only partially implemented, available metrics 

developed by the centers offer limited insight into the collective 

performance impact of the three enhancement initiatives.
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Improved Management 

Information Systems 

Would Aid in 

Implementing and 

Assessing Initiatives

AFMC headquarters recognized that effective automated data systems 

support was fundamental to successful implementation of its three 

enhancement initiatives. However, its decision to develop new systems 

concurrently with upgrading legacy systems impaired its ability to track 

implementation of the initiatives. Although AFMC headquarters and the 

centers have made progress in identifying and correcting deficiencies in 

automated data systems support, system weaknesses have made it difficult 

for AFMC to implement and assess the effectiveness of its enhancement 

initiatives.

Long-standing System 

Problems

The Air Force’s problems with automated systems support are not new. For 

example, we reported in February 1996 that existing systems were an 

obstacle to the Air Force’s reengineering of its logistics system.4

 In that 

report, we noted that, according to AFMC’s Deputy Chief of Staff for 

Logistics, AFMC headquarters was working with systems that have not 

been significantly improved in 15 years. As a result, much of the data used 

to support the enhancement initiatives has been collected manually, a task 

that project leaders said would be impossible under an Air Force-wide 

program. Also, we noted that required management actions and funding 

decisions related to systems improvement were outside the responsibility 

of managers of the enhancement initiatives and the entire Air Force. This 

report noted that improvements to existing systems would not be fully 

deployed throughout the Air Force for 5 to 10 years. Until recently, the 

Joint Logistics Systems Center had responsibility for improving existing 

systems by standardizing data systems across DOD. However, in 

September 1998, DOD disbanded the Joint Logistics Systems Center and 

returned responsibility for automated system improvements to each 

service. 

Enhancement Initiatives’ 

Information System 

Approach

AFMC headquarters and its centers recognized that to support the 

enhancement initiatives, existing automated management information 

systems must be upgraded as new systems were being developed. 

According to AFMC headquarters program plans, the depot enhancement 

initiative required significant upgrades to 15 legacy systems and the 

development of 3 new systems—changes and upgrades that are now in 

4

Best Management Practices: Reengineering the Air Force's Logistics System Can Yield Substantia l 

Savings (GAO/NSIAD-96-5, Feb. 21, 1996).
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process. The aircraft enhancement initiative required one new system to 

support reengineering of the programmed depot maintenance process, and 

the contract initiative required changes to two existing systems that 

interface between the centers’ and contractors’ systems.

Our analysis of the status of AFMC headquarters' systems improvement 

showed that, as of October 1998, work was completed on 73 proposals for 

system changes to correct problems with existing or new systems. AFMC 

headquarters reported that as of October 1998, it had 43 pending changes, 

most of which related to its prototype EXPRESS5

 software that was used to 

prioritize customer needs. Officials reported that these changes could take 

up to 4 or 5 years to complete. Also, after the latest changes were 

incorporated in October 1998, AFMC headquarters planned to change 

EXPRESS from a prototype system to a production system with new 

computer servers and other hardware added to support EXPRESS. 

A different but time-consuming approach to deal with AFMC’s system 

information needs would have been for AFMC to use the depot prototype 

initiative to identify key system requirements, develop and test those 

requirements, and have critical system support in place prior to AFMCwide implementation. AFMC did not use this approach because of the long 

lead time this approach would have required. Instead, the Air Force 

directed its efforts at improving data systems as the enhancement 

initiatives were being implemented. This resulted in implementation 

problems and a lack of data to track and assess the success of the 

initiatives. According to logistics managers, inadequate data systems 

support was the primary limitation on evaluating the impact of the 

enhancement initiatives on logistics operations.

Information Systems 

Implementation Problems

Problems with automated data systems emerged as implementation of the 

enhancement initiative progressed. Information systems were unable to 

provide data on critical issues, such as whether data being generated on 

current operations was reliable for decision-making purposes and whether 

concepts such as repair on demand were producing desired results. 

Inadequate automated system support was a key concern for full 

implementation of the depot enhancement initiative because the centers 

recognized that EXPRESS was not working as anticipated. For example, 

(1) items with high repair costs and long repair times were not identified 

5

EXPRESS stands for execution and prioritization of repair support system.
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for repair, (2) inaccurate data was fed from AFMC's central stock leveling 

system that sets base peacetime operating stocks of repair parts, 

(3) repairs were delayed because some items were erroneously shown to 

be awaiting parts, and (4) items with configurations similar to the original 

items were not identified for potential use in filling customer requisitions.

Similarly, problems occurred in linking legacy and new automated data 

systems to achieve total integration of the aircraft schedule, bill of 

materials, and resource allocation. Center program officials considered 

these linkages crucial to the success of the aircraft enhancement initiative 

in reducing repair times and costs. Interfaces have been established for 

some systems, but interfaces involving four key legacy systems are pending 

funds for design and development. Logistics managers told us they resorted 

to less optimal and time-consuming manual intervention to enhance data 

integrity and used temporary fixes to link some systems.

Future Directions AFMC must ensure that decisionmakers have timely, accurate, and 

complete information to help them resolve overall logistics problems. At 

the same time, the Air Force must ensure that it has explored alternatives 

for addressing information system needs within the bounds of relevant 

legislative and departmental policy guidance, including

• the Clinger/Cohen Act of 1996, which requires federal agencies to have 

processes and information in place to help ensure that information 

technology projects (1) are implemented at acceptable costs, within 

reasonable and expected time frames, and (2) are contributing to 

tangible, observable improvements in mission performance and 

• DOD requirements to ensure that systems are economically justified and 

comply with DOD technical and data standards—which are intended to 

help pave the way toward an interoperable systems environment.

Additionally, AFMC efforts to improve its information systems capabilities 

must be in concert with departmental efforts to remediate the Year 2000 

problem. The Year 2000 problem is rooted in the way dates are recorded, 

computed, and transmitted in automated information systems. With the 

typical two-digit format for recording dates, the year 2000, for example, is 

indistinguishable from 1900. Efforts are required and under way to correct 

this problem; failure to do so could cause DOD mission-critical operations 

to be degraded or disrupted.
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Greater Attention to 

Cost and Savings 

Issues Could Help 

Avoid Premature 

Budget Reductions

We have previously reported concerns about the abilities of DOD and the 

services to fully account for the costs associated with implementing 

various reform initiatives and concerns about premature reductions in 

operating budgets in anticipation of projected savings. Because AFMC 

headquarters did not adequately identify or track the upfront costs of 

implementing the new initiatives, budget reductions based on anticipated 

savings from them may have been premature. AFMC headquarters has 

identified the need for additional implementation funding and is 

undertaking an analysis to determine whether the initiatives are achieving 

anticipated savings.

AFMC headquarters and center officials told us that they do not know how 

much it has cost to implement the depot, contract, and aircraft 

enhancement initiatives, but they estimated that millions of dollars were 

being spent and additional funds were required. They pointed out that 

AFMC’s June 1997 deployment plan for the depot initiative forecasted an 

implementation cost of about $18.6 million. In addition, AFMC’s Depot 

Maintenance Activity Group business plan for fiscal years 1998 and 1999 

showed that the depot initiative needed funding of $9 million for each year 

for spare parts procurement. This amount was unfunded because the funds 

had been taken from the budget in anticipation of cost reductions based on 

repair times being reduced.

Notwithstanding a lack of complete information on implementation costs, 

the Air Force anticipated savings from the three initiatives. On the basis of 

this assumption, it reduced the working capital fund $336 million in fiscal 

year 1997, $289 million in fiscal year 1998, and $323 million in fiscal year 

1999. However, AFMC headquarters officials determined that it had not 

achieved this level of savings and the resulting funding shortfall was 

adversely affecting support to its customers.6

 Although these officials 

believed that they were achieving savings from the initiatives, the exact 

savings cannot be determined because the Air Force does not have a 

system for tracking savings. Because of the funding shortfall in 

maintenance and operations, AFMC headquarters has requested that the 

Air Force provide additional funding and no longer plans to reduce future 

budgets in anticipation of cost savings from the new initiatives.

6

Air Force Supply: Management Actions Create Spare Shortages and Operational Problems

(GAO/NSIAD/AIMD-99-77, Apr. 29, 1999).
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According to AFMC headquarters, achieving actual cost savings will 

require reductions in inventories of major and secondary items and faster 

maintenance response times. For example, if the aircraft initiative achieves 

its goal of moving aircraft through the repair process and returning them to 

the customer on an accelerated schedule, the Air Force should eventually 

be able to reduce the number of aircraft that are in the inventory. However, 

if excess aircraft are not retired from inventory or fewer aircraft are 

acquired in the future, the Air Force may not achieve the significant savings 

the initiatives anticipated.

Ogden Center officials said that the primary means to achieve cost savings 

from the depot initiative is reducing the amount of supply inventory. By 

repairing and returning secondary items to the customers faster, the 

centers can reduce the number of secondary items they maintain to 

support longer repair schedules—known as the maintenance float. Without 

reductions in the number of items dedicated to maintenance float or 

airplanes in the inventory to offset the increased cost of the depot 

initiative, overall costs could increase because of additional costs for 

improvements.

Improved Supply 

Support Needed for 

Effective 

Implementation of the 

Initiatives

Our prior reporting has emphasized the need for DOD to apply best 

practices in order to obtain more efficient and effective supply support at 

less cost.7 Effective supply support is critical to achieving the enhancement 

initiatives’ objectives. To accomplish repairs on demand and reduce 

turnaround times, the Air Force depots must have obtained or be able to 

obtain in a timely manner the parts and reparable components that are 

required to accomplish the overhaul and repair of reparable items. Air 

Force data indicate that parts and components required from both the Air 

Force Supply Group and DLA are sometimes unavailable, and according to 

AFMC headquarters officials, these supply activities do not provide 

acceptable support to their enhancement initiatives.

Parts availability is a key measure of the ability of the supply system to 

satisfy requests in a timely way.8

 According to AFMC headquarters 

7Inventory Management: Greater Use of Best Practices Could Reduce DOD’s Logistics Costs

(GAO/T-NSIAD-97-214, July 24, 1997). 

8

Parts availability measures how often the supply system had a part or component in stock to meet an 

Air Force customer's requirement. If the customer's requirement could not be filled when requested, 

the supply system generally backordered the part or component.
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personnel, parts availability at 90 percent or above could be required to 

support the Agile Logistics initiatives. However, the Air Force Supply 

Group averaged 50 percent overall in parts availability for April through 

September 1998. For the same period, DLA averaged 77 percent in 

availability of repair parts. We have reported in recent years that 

implementing best inventory management practices such as prime vendor 

support may be a feasible option for improving customer responsiveness 

and reducing inventory costs. However, DOD has made little progress in 

expanding the use of prime vendors for parts and components, and it is 

unclear to what extent this option will prove to be cost-effective for 

military-unique items.

Air Force Supply 

Management Group Support

Air Force customers, including maintenance depots, obtain parts and 

components that are used in accomplishing maintenance tasks from the Air 

Force Supply Management Group. The Supply Group-managed reparable 

items are unique to Air Force weapon systems and are not readily available 

in the commercial sector. These items are often of high-dollar value and 

require lengthy lead times to procure if they are not in stock or on order.

Air Force data show that the Supply Group’s performance in providing 

items has declined steadily in recent years.9

 Key indicators also show that 

support to AFMC depot maintenance customers is generally less effective 

than that to other Air Force customers such as operational fighting units. 

For instance, the Supply Group’s parts availability for AFMC between April 

to September 1998 ranked sixth out of the nine Air Force commands the 

Group served. For example, the percent of availability averaged 50 percent, 

ranging from a low of 46 percent to a high of 53 percent. Officials at the 

three centers we visited said that inadequate supply support contributed to 

extended overhaul and repair times for some items. They noted that a 

critical factor in implementing the repair-on-demand concept is that 

required parts and components be available in a timely manner to 

accommodate repair schedules.

9

In a separate ongoing assignment we are assessing overall Air Force Supply Group effectiveness. We 

are also finalizing the results of a separate review of the Supply Management Activity Group and its 

impact on the ability of its customers to obtain aircraft spare parts when needed. Since the early 1990s, 

Air Force data have shown increased instances of aircraft that were not mission capable due to spare 

parts shortages. We found that shortages of inventory items were due, at least in part, because the Air 

Force did not achieve the reduced pipeline processing time goals that are the cornerstone of its reform 

initiatives. 
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The Supply Group’s inability to support its customers meant that too many 

items were in the supply pipeline (items in transit from bases to depots and 

items being repaired) and not enough usable items were available at bases. 

Two major causes of the problem were (1) a lack of accurate data and 

effective procedures for monitoring pipeline processing times and taking 

timely and appropriate corrective action, when necessary and (2) the depot 

maintenance activities’ inability to repair items because of shortages of 

parts, repair shop personnel, and testing equipment.10

The Supply Group’s strategic plan for fiscal years 1999 to 2005 does not 

address what measures, if any, it plans to take to increase parts availability. 

However, the plan does include strategies to improve stockage 

effectiveness—another measure of supply support effectiveness.11

Additionally, the Supply Group intends to have memorandums of 

agreement with each supplying depot maintenance manager to help reduce 

repair times, ensure time-definite delivery, and ensure parts support for 

items being repaired in depot shops. Also, AFMC headquarters depot 

maintenance officials said that they were working with officials in the 

Supply Group to identify additional actions to improve supply support.

DLA Support DLA is the primary supplier of parts the AFMC centers need for depot 

maintenance repairs and operates all depot supply distribution functions. 

However, unavailability of repair parts at depots has been a chronic 

problem.12 The impact of these problems was severe under the old 

approach, but it is even more critical for successful implementation of the 

repair-on-demand approach. This makes updating AFMC’s previous support 

agreement with DLA imperative.

AFMC headquarters data on parts availability for March through September 

1998 showed that DLA generally met the Air Force’s goal of 75 percent 

availability, averaging 77 percent for the period. However, in an AFMC 

10See Air Force Supply: Management Actions Create Spare Shortages and Operational Problems

(GAO/NSIAD/AIMD-99-77, Apr. 29, 1999) and Defense Inventory: Continuing Challenges in Managing

Inventories and Avoiding Adverse Operational Effects (GAO/T-NSIAD-99-83, Feb. 25, 1999).

11Stockage effectiveness measures the percentage of time the supply system satisfies a requisition for 

items that have an authorized stockage level, whereas parts availability measures how often the supply 

system satisfies a requisition for any item—regardless of whether or not it has an authorized stock 

level.

12Air Force Supply: Management Actions Create Spare Shortages and Operational Problems

(GAO/NSIAD/AIMD-99-77, Apr. 29, 1999).
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official’s view, this rate is not adequate to support the new initiatives that 

require a 90 percent or more availability rate. According to AFMC 

headquarters logistics personnel, the extent to which items critical to 

repairs are provided on a timely basis cannot be easily evaluated with 

current data, but the answer is key to the success of the new initiatives.

The new initiatives have increased the need for significant changes in 

business relationships between AFMC and DLA. As AFMC implemented 

the enhancement initiatives, it sought accelerated deliveries of repair parts 

and transportation of items to and from the customers. Negotiations have 

taken place between DLA and AFMC to develop an updated support 

agreement to ensure that parts are made available on an expedited basis, as 

needed, to support the new initiatives. However, AFMC headquarters and 

DLA have not been able to agree on the details of the new agreement. 

According to an AFMC headquarters official, progress in negotiating an 

agreement for DLA support of the enhancement initiatives has been slow 

and difficult, with little progress since early 1998. Neither AFMC 

headquarters nor DLA officials were optimistic about when an agreement 

would be reached. AFMC headquarters officials said that they want an 

agreement that specifies support arrangements and contains measures that 

will be used for evaluating DLA supply support performance. On the other 

hand, DLA officials want an agreement that contains broader, more general 

language to allow flexibility in support arrangements. Also, in contrast to 

AFMC headquarters, which wants each center to receive individual 

attention, DLA wants only one operating agreement covering both AFMC 

headquarters and its centers.

Aside from negotiations over the interagency agreement, AFMC 

headquarters officials expressed concern over specific aspects of their 

working relationship with DLA that were often rooted in problems 

associated with their management information systems.

According to headquarters officials, AFMC’s working relationship with 

DLA could be improved in areas such as supply quantity and ownership 

data, visibility of orders and location of parts, questionable cost charges, 

and reconciliation of discrepancies between the two organizations’ 

databases. AFMC headquarters officials said that these issues have caused 

the centers and DLA to take time-consuming and costly actions to manually 

intervene and work around problems. For example, AFMC’s systems, in
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particular the requisitioning for inventory system,13 do not interface with 

DLA’s new automated system for inventory management. The new system 

includes the tracking and reporting of stock transactions between the two 

organizations. Manual intervention is required to match item numbers, 

quantities, and ownership information. 

AFMC headquarters and the centers have identified numerous 

discrepancies between their records and DLA’s since DLA brought its new 

system on line at the three centers between August 1997 and January 1998. 

The three centers reported progress in resolving these discrepancies. For 

example, since the new DLA system was implemented, the three centers 

reported making inventory record adjustments totaling $4 billion to 

reconcile records, stock orders, and requisition returns between the 

centers' records and DLA records. 

DLA officials said that in addition to the new systems, the Air Force has a 

number of legacy systems that do not interface effectively with DLA’s 

automated supply systems. This lack of effective interface is causing some 

problems at the center level with timely receipt of orders. Also, DLA and 

the Air Force have not yet settled on what performance indicators to use 

and how they will be tracked to evaluate problems existing in supply and 

transportation support. However, DLA officials said that DLA fully supports 

the Air Force’s initiatives and is working with the centers to improve supply 

support.

Opportunities to Increase 

Use of Best Inventory 

Management Practices

In recent years we have recommended that DOD consider the use of prime 

vendors14 and other best management practices to improve supply support 

responsiveness and reduce the cost of DOD’s logistics system. The services 

and DLA have pursued a number of initiatives to improve supply support of 

weapon system parts and components, including limited use of prime 

vendors, but significant supply support weaknesses remain.

13This system is called the DO35. It is the Air Force’s Stock Control and Distribution System. This 

system tracks depot supply stocks and their distribution and provides information on backorders, 

supply balances, daily transactions, and floating stock balances.

14A prime vendor is a single vendor that buys inventory from a variety of suppliers and stores the 

inventory in its warehouses until ordered by the customers. The prime vendor then ships the inventory 

to the DOD activity as ordered. This process is intended to improve support to the customer by 

reducing delivery time and reducing costs for maintaining, warehousing, and distributing inventory. 
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Starting in 1993, DOD began prime vendor initiatives for the procurement 

of items readily available in the commercial sector, such as medicines and 

food products. DOD has reported benefits such as inventory reduction; 

reduced response time; and reduced purchase, storage, and distribution 

costs. We have recommended that DOD expand its prime vendor initiatives 

to other areas, including the supply of parts and components required in 

the depot maintenance process.15 To date DOD has made limited progress 

in this area. Recently, the Congress enacted legislation requiring DLA and 

the military services to develop and submit schedules for implementing 

best commercial practices in their acquisition and distribution of inventory 

items.16 The legislation calls for the implementation of best practice 

initiatives to be completed within the next 3 years in the case of DLA and 

5 years for the services. We are currently reviewing the implementation of 

these initiatives.

DOD officials have observed difficulties in effectively using prime vendors 

to provide spare and repair parts for several weapon system programs. 

They noted that military-unique items with low or infrequent demand do 

not lend themselves to the new management concepts embodied in the 

commercial sector’s prime vendor programs. Thus, it is uncertain how costeffective this concept will be in supplying military-unique items with 

uncertain requirements and only one customer. On the other hand, it 

remains a viable option that merits further consideration as the 

Department continues to strive to improve its spare and repair parts supply 

support responsiveness.

New Vision for 

Logistics Management

In January 1998, the Air Force announced a new vision for its logistics 

management that builds on its current initiatives. However, it is not clear 

from the new vision statement how the Air Force is going to deal with the 

specific problems identified in this report related to the initiatives already 

under way.

In response to two recent Air Force studies addressing implementation of 

Agile Logistics, the Air Force established a new vision for its logistics 

management program. More specifically, in January 1998, the AFMC 

15Inventory Management: Greater Use of Best Practices Could Reduce DOD’s Logistics Costs

(GAO/T-NSIAD-97-214, July 24, 1997).

16 Section 347 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999

 (P.L. 105-261). 
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Commander presented five major goals for changing logistics management 

policies and practices. These goals were to

• set appropriate inventory levels and fill them;

• match repair to demand;

• develop better cost estimates and use them to cost-effectively execute 

inventory actions and the concept of repairs on demand;

• quickly identify and react cost-effectively to surprises; and

• continuously reduce total costs, improve cost estimation, and reduce 

cycle times.

Although these goals appear to be consistent with its enhancement 

initiatives, AFMC headquarters has not yet provided a detailed plan for 

implementation of this vision. An effective implementation plan should 

provide details regarding how to achieve these goals. Further, such a plan 

should identify whether, and to what extent, the command will address 

needed improvements in the implementation and management of the 

depot, contract, and aircraft enhancement initiatives.

Conclusions Progress in implementing the initiatives is difficult to measure because 

only broad goals of increased operational efficiency and reduced costs 

were established, along with an approach to implementing the initiatives. 

No agreed upon metrics were established for measuring progress in 

implementing the initiatives. Moreover, available data indicates only 

limited progress has been made in implementing the initiatives, and 

decisions are yet to be made regarding the extent to which the initiatives 

should be applied to all reparable items and aircraft. Also, implementation 

of the initiatives has been affected by various management problems, 

including limited implementation of standard organizational structures and 

processes, lack of a multiskilled workforce training plan, lack of standard 

measures to assess performance, inadequate automated management 

information systems to support analysis and decision-making, and lack of 

reliable information on investment costs and expected savings. Progress 

has also been hampered by incomplete action on reaching agreements that 

are essential for achieving program goals (such as identifying ways to 

improve supply support from the Air Force Supply Group and updating 

AFMC’s support agreement with DLA). To what extent other options, such 

as prime vendor, offer a viable alternative to mitigate supply support 

weaknesses remains to be determined.

AFMC has recently set forth a new vision for logistics reform that appears 

to be consistent with the goals for its three enhancement initiatives. 
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Although over a year has passed since the vision and goals were 

announced, the Air Force has not yet provided details on how these goals 

will be achieved. Precisely how AFMC headquarters plans address 

implementation and management problems we identified is unclear. 

Without a detailed implementation plan, it is unclear whether or to what 

extent the new vision may further the Air Force’s objective of improving 

the economy and efficiency of its logistics system.

Recommendations We recommend that the Secretary of Defense direct the Secretary of the Air 

Force to require the Air Force Materiel Command to refine and improve its 

implementation and management of the three reengineering initiatives by 

taking the following actions:

• Develop an implementation plan that details the specific criteria for 

determining if the initiatives are successfully achieving stated goals and 

desired results.

• Determine the extent to which the enhancement initiatives should be 

applied to all reparable items to ensure optimum benefits.

• Assess progress in implementing the standardized organizational 

structures and processes and the extent to which they are achieving the 

objectives of better teamwork.

• Develop and implement a transition plan to ensure sufficient numbers of 

trained multiskilled personnel are available to meet requirements and 

produce needed operational efficiencies.

• Upgrade automated management information systems needed to 

support the initiatives in keeping with DOD and Clinger/Cohen Act 

requirements associated with acquiring information systems support 

and ensuring Year 2000 compliance.

• Develop and implement improved strategies for providing more 

effective supply support to depot maintenance customers, including the 

exploration of prime vendor or other best inventory management 

practices and agreements with the Air Force Supply Group and DLA.

• Reassess the extent to which costs have been fully identified and 

budgeted to avoid funding shortfalls and to ensure that operating funds 

are not prematurely reduced in anticipation of savings from the 

initiatives.
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Agency Comments and 

Our Evaluation

We requested comments on a draft of this report from the Secretary of 

Defense. Air Force officials provided oral comments, stating that the 

Department agreed with our findings and with the intent of our 

recommendations. In acknowledging that measures were needed to better 

ensure success of its reform initiatives, the Air Force offered a general 

description of actions it had taken or planned to take to improve the 

reengineering of its industrial operations.

However, given the general nature of the comments, it is uncertain to what 

extent the Air Force will address the concerns we have raised. For 

example, the Air Force said it would address the need for an initiative 

implementation plan through a DOD-wide planning effort. We reviewed a 

draft of the DOD-wide plan and could not determine how the Air Force’s 

initiatives were addressed. We had similar type questions regarding other 

points made by the Air Force and they are presented in appendix II.
Page 46 GAO/NSIAD-99-63 Air Force Depot Maintenance

Appendix I

Recent Air Force Studies on Agile Logistics ApeInxdi

Two recent Air Force studies on the Air Force’s Agile Logistics initiatives 

provide additional insight into problems experienced with implementation 

of Agile Logistics: (1) a December 1997 report by the Air Force Inspector 

General (IG) on the implementation and maturity of Agile Logistics and the 

effect on combat readiness and (2) a March 1998 report by a Reparable 

Spares Management Board. The Board consisted of a group of active and 

retired military representatives and private industry representatives 

appointed by the Commander of Air Force Materiel Command (AFMC) to 

identify management changes that the Air Force could implement within 

the next 12 to 24 months to help reverse negative performance and 

financial trends associated with reparable spares management.

 Air Force Inspector 

General Audit Report

Key findings of the Inspector General’s December 1997 report included

• Three special factors skewed the results of the prototype depot 

initiative that were difficult to duplicate for subsequent shops: 

additional resources, high priority handling and movement of assets 

destined to the shops throughout all segments of the logistics pipeline, 

and a funding anomaly.

• The Air Force needed usable, meaningful measures that are deployed 

and used throughout the logistics community because, overall, the 

current Agile Logistics measures process was not effective. The IG 

found that AFMC and the centers had jointly developed measures, but 

only two centers knew of specific measures and no center used the 

AFMC developed package as the measures baseline. Selective measures 

were being used but few personnel knew of these measures, how to 

track them, or the source of the data.

• The centers used temporary arrangements to reorganize their 

workforce. Long-term support of the depot initiative requires movement 

of workers from one organizational area to another (matrixing) and 

having some workers qualified to perform additional duties 

(multiskilling). However, reclassification actions were not 

accomplished to formally allow matrixing and multiskilling.

• The centers implemented the depot initiative in spite of system 

deficiencies. System limitations and inaccurate data were the largest 

barrier to success. Erroneous data entry, time disconnects, and software 

errors corrupted the information generated by existing computer 

systems. The depots did not have an operational network to fully 

implement the depot initiative and without the benefit of an approved 

network layout, had some network infrastructure in place, had acquired 

some, and had other purchases planned. Funding was not available for 
Appendix I

Recent Air Force Studies on Agile Logistics

Page 47 GAO/NSIAD-99-63 Air Force Depot Maintenance

all network requirements and funding requirements had not been 

identified for personal computer upgrades.

• The Defense Logistics Agency (DLA) was critical to the success of Agile 

Logistics and the duties and responsibilities for both DLA and the Air 

Force must be clearly defined and achievable. The scope of DLA 

responsibilities to support agile logistics was not clearly defined and the 

significant ramifications and costs of these changes were not 

sufficiently addressed to ensure DLA could respond to Air Force needs. 

• People across the board showed dedication, flexibility, and adaptability 

as their logistics world fundamentally changed. However, the level of 

buy-in varied widely at the commands and few knew the overall flow or 

were aware of long term changes due to Agile Logistics. Also, Agile 

Logistics was poorly understood at the field level due to the lack of 

adequate policy and guidance, which also hindered the long-term 

success of Agile Logistics. 

The IG’s report noted corrective action underway by AFMC. For example, 

AFMC had taken action to adopt a more realistic schedule to develop and 

test automated system changes, to scrub information sources and data 

bases and correct erroneous data, and awarded a contract to correct 

problems with EXPRESS. The report also made a number of 

recommendations addressing each of its findings. For instance, the report 

recommended that AFMC (1) specify DLA requirements to support Agile 

Logistics implementation, (2) jointly, with DLA, determine the cost for DLA 

to meet Air Force requirements, and (3) negotiate and formalize coverage 

of Agile Logistics in the agreement between the Air Force and DLA. 

Although AFMC did not provide a formal written response to each of the 

IG's findings, conclusions and recommendations, it stated that corrective 

action would be taken as implementation of Agile Logistics matured.

Reparable Spares 

Management Board Report

In December 1997, the Commander of AFMC appointed the Board to focus 

on ways to improve AFMC’s (1) financial management process that plans, 

programs, budgets for, and executes supply chain management activities, 

(2) performance measures, and (3) accountability in the supply chain. The 

Board’s final report dated March 30, 1998, proposed a number of actions 

that the Air Force could initiate to improve the management of reparable 

spares. Overall, the Board concluded that the Air Force now faces the 

following problems that must be resolved quickly: (1) the requirements 

process, which defines what the Air Force should buy and repair, is broken 

and must be rebuilt; (2) the budgeting processes underestimate support 

costs and, as a result, fail to execute support budgets properly; 
Appendix I

Recent Air Force Studies on Agile Logistics

Page 48 GAO/NSIAD-99-63 Air Force Depot Maintenance

(3) obligation authority for logistics services is not executed costeffectively; (4) new information systems under development will not 

support the seamless logistics system needed for the new environment; 

(5) despite all the changes, the Air Force has not reengineered any single 

process in its entirety to reflect the new environment; and (6) the basic 

management culture in AFMC resists change.

Some of the report’s key findings were:

• Air Force logistics has changed fundamentally during the past 15 years, 

provoking many changes in logistics policy and practice. Although each 

change felt like a major adjustment at the time, the Air Force did not 

develop a system-wide vision to coordinate the changes. As a result, 

changes from the late 1980s and 1990s had only incremental effects and 

often unintended negative consequences.

• Changes resulting from Agile Logistics initiatives did not provide the 

cost savings necessary to meet budget reductions because “the Air 

Force often used unrealistic expectations about future performance, 

failed to anticipate implementation and transition costs, or doublecounted cost savings.” With anticipated costs and savings overstated, 

the Air Force cut its support budget more than it cut support costs. 

Because the Air Force did not develop a system-wide vision, logistics 

managers cut support for discretionary activities faster than depot 

repair activities, delayed sending assets for depot repair as long as 

possible, and, where possible, postponed work from one fiscal year to 

the next.

• Individual organizations within the Air Force implemented the 

initiatives without the benefit of a coordinated, Air Force-wide look at 

how the required changes would fit together. Such initiatives required 

new forms of material management discipline that material managers 

were not prepared to provide. Thus, a set of uncoordinated changes, 

each producing unforeseen problems did not achieve all of the 

anticipated benefits.

• The Air Force had measures, but would benefit from a better 

understanding of how the commercial sector used measures to drive 

improvement in a supply chain.

• For the mid-term, EXPRESS can help the Air Force implement the repair 

on demand concept, but this concept required adequate capability to be 

available for a repair action to occur when a demand occurs. The Air 

Force needed a planning process that can anticipate future customer 

demands and mobilize all relevant processes to prepare for that 

demand. Such a concept is likely to work only if providers and 
Appendix I

Recent Air Force Studies on Agile Logistics

Page 49 GAO/NSIAD-99-63 Air Force Depot Maintenance

customers communicate with one another more effectively than today 

and have access to better analytic tools to support joint planning. 

Current Air Force plans for integrating its logistics information systems 

would not lead to complete integration.

• The Air Force cannot achieve a seamless logistics information 

management system as envisioned under Agile Logistics until it 

specifies which databases are to be shared and identifies common 

applications for base and depot-level maintenance and material 

management.

• In contrast to the experience of successful commercial firms, the Air 

Force initiatives will not succeed unless the leadership is committed to 

a program of long-term, strategic, system-wide change and, without this 

leadership, the planned logistics changes will become a few more 

incremental adjustments with little effect.

The Board made no specific recommendations for AFMC but suggested 

several actions that AFMC could consider for improving the management 

of reparable spares. Among these suggestions were that the Air Force 

leadership needed (1) clear top-down information on corporate goals, 

guidance on who is accountable for meeting these goals, and sufficient 

resources for achieving them, (2) training and other arrangements to 

ensure that communication and teamwork help link segments of the supply 

chain, and (3) a formal process to design changes to the logistics process 

and then implement, monitor, evaluate, and correct changes for system 

improvement. The Board suggested that the Air Force should (1) integrate 

its logistics information systems to allow all players in the logistics pipeline 

access to accurate and timely cost, schedule, and performance data and 

(2) improve discipline during data entry to significantly improve the 

accuracy of data produced by automated systems. Also, the Air Force 

should use a small number of system measures to define and potentially 

quantify the broad goals of the organization as a whole, motivational 

measures for specific teams or managers to apply to particular situations, 

and diagnostic measures to help decisionmakers track particular processes 

in order to diagnose and overcome problems with pursuing motivational 

measures.

The Board noted that the Commander of AFMC was initiating a new 

management approach that, if properly implemented, should allow AFMC 

to address the problems noted by its report. AFMC made no formal written 

response to the Board's findings and suggested actions.
Page 50 GAO/NSIAD-99-63 Air Force Depot Maintenance

Appendix II

GAO Evaluation of Air Force Comments ApIexndi

Presented below is our evaluation of the specific oral comments provided 

on a draft of this report.

1. Concerning our recommendation to develop a detailed implementation 

plan, the Air Force stated that it has begun implementing the three 

enhancement initiatives as outlined in DOD’s report Product Support for 

the 21st Century, which covers current and future logistics reform 

initiatives. We examined the Air Force’s input to a March 1999 draft of this 

report because no final report had been issued. Information in that draft 

provided some general information on the overall objectives and goals of 

the Air Force’s Agile Logistics program. However, this input did not relate 

what plans the Air Force had to better manage the implementation and 

execution of either the existing enhancement initiatives or those being 

planned for the future. With only this information, we cannot determine to 

what extent the Air Force intends to address the specific problems 

discussed in our report.

2. Regarding our recommendation that a determination be made 

concerning whether the enhancement initiatives should be applied to all 

reparable items, the Air Force said it is making such an assessment. While 

the Air Force officials stated that all aircraft would be included in the 

aircraft initiative, the Air Force did not identify the criteria it used in 

making that determination.

3. Regarding our recommendation concerning the use of standardized 

organizational structures and processes to help achieve the objectives of 

the enhancement initiatives, the Air Force agreed that greater 

standardization might improve the effectiveness and efficiency of depot 

operations. However, it noted that process flexibility may be needed in 

some instances to ensure readiness. The Air Force did not indicate whether 

it would require its depots to comply with standard processes and 

organizational structures or the basis on which the depots would be 

allowed to deviate from standard requirements.

4. Regarding our recommendation for the development and 

implementation of a transition plan to ensure sufficient numbers of trained 

multiskilled personnel, Air Force officials said they recognized the 

importance of a multiskilled workforce to enhance operational efficiencies. 

However, they did not identify a plan for developing a multiskilled 

workforce or say when this training would be completed, what worker 

classifications were needed to be multiskilled, or how the training would 

be accomplished. We would expect a multiskilling plan to have these types 

of details.
Appendix II

GAO Evaluation of Air Force Comments

Page 51 GAO/NSIAD-99-63 Air Force Depot Maintenance

5. Regarding our recommendation to develop standard measures to 

evaluate the three enhancement initiatives, Air Force officials stated that 

they were developing such measures. However, they did not indicate how 

they plan to resolve the long-standing impasse between AFMC and its 

centers on the appropriate criteria for measuring the effectiveness of the 

initiatives. Also, they did not indicate either a time frame for developing 

and implementing the measures or features of the initiatives that would be 

monitored and evaluated. In finalizing our report we combined this 

recommendation with our first recommendation to address goals and 

results.

6. Regarding our recommendation to upgrade automated management 

information systems needed to support the reengineering alternatives, Air 

Force officials said they were now developing new logistics systems that 

will communicate together, share data, and have common applications. 

They said that these new systems will be consistent with the Clinger/Cohen 

Act and be Year 2000 compliant. They did not specifically address the 

automated system weaknesses identified in our report or indicate how the 

new systems correspond to the Air Force’s actions taken or planned to 

improve automated systems support for the three enhancement initiatives.

7. Regarding our recommendation to develop and implement improved 

strategies for providing more effective supply support to depot 

maintenance customers, Air Force officials stated that AFMC is already 

engaged with DLA on prime vendor initiatives. However, it is not clear how 

current initiatives would address specific problems identified in this report. 

Also, the officials did not address how or when it planned to improve the 

support from its supply management group.

8. Finally, regarding our recommendation to reassess the extent to which 

costs for the enhancement initiatives have been fully identified, Air Force 

officials did not comment on any reassessment of funding requirements. At 

the same time, they said they did not have a system for tracking savings by 

individual initiatives. They also stated that in a resource-constrained 

environment, the Air Force has no alternative to taking savings based on 

the best estimates known at the time to fund high-priority requirements. 

However, the resource-constrained environment the officials described 

makes it important to avoid reducing operating accounts in anticipation of 

savings that may not be realized.
Page 52 GAO/NSIAD-99-63 Air Force Depot Maintenance

Appendix III

GAO Contacts and Staff Acknowledgments ApIexndi

GAO Contacts: Julia Denman (202) 512-4290

Acknowledgments In addition to those named above, Bobby Worrell, Terry Wyatt,

Bruce Fairbairn, and Frederick Naas made key contributions to this report.
Page 53 GAO/NSIAD-99-63 Air Force Depot Maintenance
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Page 55 GAO/NSIAD-99-63 Air Force Depot Maintenance
Page 56 GAO/NSIAD-99-63 Air Force Depot Maintenance

Related GAO Products

Army Industrial Facilities: Workforce Requirements and Related Issues

Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30, 1998).

Air Force Supply Management: Analysis of Activity Group's Financial

Reports, Prices, and Cash Management (GAO/AIMD/NSIAD-98-118, 

June 8, 1998).

Outsourcing DOD Logistics: Savings Achievable but Defense Science

Board's Projections Are Overstated (GAO/NSIAD-98-48, Dec. 8, 1997).

Defense Depot Maintenance: Challenges Facing DOD in Managing Working

Capital Funds (GAO/T-NSIAD/AIMD-97-152, May 7, 1997).

Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in

Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-112, 

May 1,1997) and (GAO/T-NSIAD-97-111, Mar. 18, 1997). 

Best Management Practices: Reengineering the Air Force's Logistics

System Can Yield Substantial Savings (GAO/NSIAD-96-5, Feb. 21, 1996).

(709315) Letr
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