a

GAO

United States General Accounting Office

Report to the Chairman, Subcommittee 

on Defense, Committee on 

Appropriations, House of 

Representatives

June 2002 AIR FORCE DEPOT 

MAINTENANCE

Management 

Improvements Needed 

for Backlog of Funded 

Contract Maintenance 

Work

GAO-02-623

Page i GAO-02-623 Air Force Depot Maintenance

Contents

Letter 1

Results in Brief 2

Background 3

Reported Carryover Exceeded DOD Standard but Is Unreliable and 

Understated 7

Causes of Reported Carryover 12

Conclusions 20

Recommendations for Executive Action 21

Agency Comments and Our Evaluation 22

Appendixes

Appendix I: Scope and Methodology 24

Appendix II: Sample Element Disposition Table 27

Appendix III: Comments From the Department of Defense 29

Appendix IV: GAO Contact and Staff Acknowledgments 32

GAO Contact 32

Acknowledgments 32

Tables Table 1: Unfilled Orders, Work-In-Process, and Carryover at the 

End of Fiscal Year 2000 and Fiscal Year 2001 9

Table 2: Causes of the Depot Maintenance Activity Group’s Unfilled 

Orders as of September 30, 2000 13

Table 3: Delayed Repair Times for KC-135 Aircraft Due to 

Unanticipated Work 15

Table 4: Population Estimates as of September 30, 2000, for Normal 

and Problem Carryover Balances 25
Page ii GAO-02-623 Air Force Depot Maintenance
Page 1 GAO-02-623 Air Force Depot Maintenance

United States General Accounting Office

Washington, D.C. 20548

A

June 20, 2002 Letr

The Honorable Jerry Lewis

Chairman, Subcommittee on Defense

Committee on Appropriations 

House of Representatives

Dear Mr. Chairman:

This is the second in a planned series of reports that discusses the Defense 

Working Capital Fund fiscal year-end workload funding issue, generally 

referred to as “carryover.” Section 1051 of the National Defense 

Authorization Act For Fiscal Year 2001 (Public Law 106-398) required that 

we review various aspects of the Department of Defense (DOD) policy that 

allows Defense Working Capital Fund activities to carry over a 3-month 

level of work from one fiscal year to the next. In May 2001, we reported1

that (1) DOD did not have a sound analytical basis for its current 3-month 

carryover standard, (2) military services used different methods to 

calculate the number of months of carryover, and (3) some activity groups 

underestimated their budgeted carryover year after year, thereby providing 

decisionmakers with misleading year-end carryover information resulting 

in more funding being provided than was intended.

As requested and agreed to with your office, this report assesses carryover2

related to the contract portion of the Air Force depot maintenance activity 

group. The DOD 3-month carryover standard applies to all DOD activity 

groups except for the contract portion of the Air Force depot maintenance 

activity group, for which DOD established a 4.5-month carryover standard 

because of the additional administrative functions associated with 

awarding contracts. Specifically, our objectives were to (1) determine if 

the reported carryover balance accurately reflected the amount of 

1

U.S. General Accounting Office, Defense Working Capital Fund: Improvements Needed 

for Managing the Backlog of Funded Work, GAO-01-559 (Washington, D.C.: May 30, 2001). 

2

The carryover amount includes work for which obligations have been made but which has 

not yet started and the cost to complete work that has been started. The Air Force 

calculates carryover by subtracting the amount of work-in-process from the amount of 

unfilled orders. Unfilled orders equals the dollar value of customer orders received less 

revenue earned. Revenue is earned as repairs on undelivered items are completed. Work-inprocess is the cost of the materials, labor, and indirect costs used in producing an end item 

or service on an order that is not yet complete.
Page 2 GAO-02-623 Air Force Depot Maintenance

unfinished work on hand at the end of fiscal year 2000 and (2) identify the 

causes of carryover at the end of fiscal year 2000. 

In February 2002, the Air Force began to consider removing the contract 

portion of the depot maintenance activity group from the working capital 

fund. In April 2002, Air Force headquarters directed the Air Force Materiel 

Command to begin planning for this transition. If the contract portion is 

removed from the working capital fund, all of the issues identified in this 

report will still need to be addressed except for matters dealing with 

carryover under the DOD working capital fund requirements.

Our review was performed from July 2001 through May 2002 in accordance 

with U. S. generally accepted government auditing standards. The 

production and financial information we used and referred to in this report 

was provided by the Air Force, and we did not verify it. We worked with 

Air Force officials to validate the reliability of the information in its system 

in determining the reasons for the work not being completed at the end of 

fiscal year 2000. We did not assess the work performed by the in-house 

operations of the depot maintenance activity group. Further details on our 

scope and methodology can be found in appendixes I and II. We requested 

comments on a draft of this report from the Secretary of Defense or his 

designee. Written comments from the Under Secretary of Defense 

(Comptroller) are reprinted in appendix III.

Results in Brief Reported carryover balances for fiscal years 2000 and 2001 were inaccurate 

and, therefore, the balances were not reliable for decision-making or 

budget review purposes. The reported carryover balances were not 

accurate due to (1) faulty assumptions used in calculating work-in-process 

and (2) records not accurately reflecting work that was actually completed 

by year-end. As a result, the amount of carryover reported by the Air Force 

was understated by tens of millions of dollars and customers’ funds were 

idle that could have been used for other purposes during the fiscal year. 

Even though the carryover was understated, Air Force reports show that 

the contract portion of the depot maintenance activity group exceeded the 

4.5-month carryover standard at the end of fiscal year 2000 and fiscal year 

2001 by about $44 million and $134 million, respectively. Air Force 

headquarters officials stated that the primary reason that they exceeded 

the 4.5-month standard for fiscal year 2001 was the receipt of a large 

amount of orders late in the fiscal year.
Page 3 GAO-02-623 Air Force Depot Maintenance

Our analysis of about $1.6 billion of reported unfilled orders showed that a 

substantial amount of the work that the activity group carried over into 

fiscal year 2001 was work that it had planned to, but did not, complete prior 

to the end of fiscal year 2000 due to logistical and production problems. 

Specifically, we estimated that about $530 million3

 of work was not 

completed for two key reasons. First, repairs took longer than planned 

primarily because (1) parts needed to perform the repairs were not 

available from DOD, (2) more work was needed to repair the assets than 

originally planned by the Air Force, and (3) contractors had capacity 

constraints related to personnel, facilities, and equipment. Second, work 

on some assets was not started as planned because of the delayed 

induction of items into production at contractors’ facilities. Further, we 

could not determine the causes for an estimated $191 million4

 of work not 

being done primarily because reliable information was not available on the 

status of contracts that were previously managed by the two air logistics 

centers that were closed in fiscal year 2001. In addition, we estimate that 

about $913 million5

 of unfilled orders was for work that either (1) had not 

been planned for completion until after fiscal year 2000—normal carryover 

or (2) had actually been completed but not recorded as completed in the 

production and cost system.

We are making recommendations to the Secretary of the Air Force to 

improve the management and reporting of the carryover for the contract 

portion of the Air Force depot maintenance activity group, including

(1) improving the assumptions used in calculating work-in-process, 

(2) improving the accuracy of the data in systems, and (3) correcting the 

problems associated with work not being completed as planned, such as 

the long-standing problem related to the lack of parts to fix assets. In its 

comments on a draft of this report, DOD agreed with our recommendations 

and briefly outlined its planned actions for addressing them.

Background The Air Force depot maintenance activity group supports combat readiness 

by providing depot repair services necessary to keep Air Force units 

3

Estimate made as a 95 percent confidence level with a confidence interval of

+/- $81 million.

4

Estimate made at a 95 percent confidence level with a confidence interval of +/- $58 million.

5

Estimate made at a 95 percent confidence level with a confidence interval of +/- $87 million.
Page 4 GAO-02-623 Air Force Depot Maintenance

operating worldwide. The group generates between $5 billion to $6 billion 

in annual revenue principally by repairing and overhauling a wide range of 

assets including aircraft, missiles, aircraft engines, software, and 

exchangeable inventory items for military services, other government 

agencies, and foreign governments. In performing these services, the 

group performs the work in-house at its depots or through contracts with 

private industry or other government agencies. The group operates under 

the working capital fund concept, where customers are to be charged the 

anticipated actual costs of providing goods and services to them.

Contract Depot 

Maintenance Process and 

Key Controls Used to 

Manage Contracted Work

Customers place orders with the Air Force depot maintenance activity 

group. When the activity group accepts the order, the customer’s funds are 

obligated. The customer uses the activity group as its purchasing agent 

when it needs a contractor to perform depot-level maintenance work. The 

activity group awards the contract and manages the work performed by the 

contractor. The contract portion of the depot maintenance activity group 

generates between $2 billion and $3 billion in annual revenue. In 

accomplishing this work, the Air Force has about 5,000 contracts with 

about 750 contractors that are located in the United States as well as 

overseas.

The Air Force air logistics centers use the contract depot maintenance 

production and cost system (known as G072D) as a means of combining 

financial and production data for the management of work that is being 

performed by contractors. The Air Force has also established procedures 

and internal controls for the contract portion of the depot maintenance 

activity group, which are described in two Air Force Materiel Command 

Instructions. Command Instruction 21-113 discusses the contract 

maintenance program for the depot maintenance activity group and 

Command Instruction 21-134 discusses the end item transaction reporting 

system (known as G009) and the reporting procedures for contractors. 

Some of the procedures and controls in these two instructions follow.

• Contracts can be awarded for a 12-month period anytime during the 

year. All the items to be repaired will be funded from the appropriation 

of the initial fiscal year. However, work must be started on at least one 

item during the initial fiscal year for the entire job cost to be properly 

charged to appropriated funds for that year.

• At a minimum, assets planned to be sent to contractors for repair should 

be reviewed quarterly. If the assets are not received by the contractors 
Page 5 GAO-02-623 Air Force Depot Maintenance

and will not be received within a reasonable amount of time (60 days), 

the planned quantities to be repaired and related obligated dollars must 

be reduced accordingly and the contract amended, if necessary.

• Contractors are required to report, at least monthly, on the status of the 

assets being repaired, such as when the (1) assets were received, 

(2) assets were inducted for repair, and (3) work was completed on the 

assets. The production management specialists at the air logistics 

centers are responsible for ensuring that the information provided by 

the contractors is accurate.

• A review of the contract maintenance ledger produced from the 

production and cost system must be performed quarterly. Particular 

attention should be directed to (1) contractors beginning work on assets 

compared to the plan and (2) contractors completing work on assets 

compared to the plan. Any questionable information must be annotated 

and reviewed and corrections made prior to the next monthly 

processing cycle.

What Is Carryover and Why Is It 

Important?

Carryover is the dollar value of work that has been ordered and funded 

(obligated) by customers but not yet completed by working capital fund 

activities at the end of the fiscal year. Carryover consists of both the 

unfinished portion of work started but not yet completed, as well as 

requested work that has not yet commenced. To manage carryover, DOD 

converts the dollar amount of carryover to months of work. This is done to 

put the magnitude of the carryover in proper perspective. For example, if 

an activity group performs $100 million of work in a year and had 

$100 million in carryover at year-end, it would have 12 months of carryover. 

However, if another activity group performs $400 million of work in a year 

and had $100 million in carryover at year-end, this group would have 3 

months of carryover.

A DOD regulation allows for some carryover at fiscal year-end to allow 

working capital funds to operate efficiently and effectively. In 1996, DOD 

established a 3-month carryover standard for all the working capital fund 

activities except for the contract portion of the Air Force depot 

maintenance activity group. The Air Force is the only military service that 

includes its contract depot maintenance operation in its working capital 

fund. To reflect this difference, DOD established a 4.5-month carryover 

standard to account for the additional administrative functions associated
Page 6 GAO-02-623 Air Force Depot Maintenance

with awarding contracts. In May 2001, we reported6 that DOD did not have 

a basis for its carryover standard and recommended that Defense 

determine the appropriate carryover standard for the depot maintenance, 

ordnance, and research and development activity groups. DOD is in the 

process of assessing its carryover standards. Too little carryover could 

result in some depot maintenance activity not having work to perform at 

the beginning of the fiscal year, resulting in the inefficient use of personnel. 

On the other hand, too much carryover could result in an activity group 

receiving funds from customers in one fiscal year but not performing the 

work until well into the next fiscal year or subsequent years. By 

minimizing the amount of the carryover, DOD can use its resources most 

effectively and minimize the “banking” of funds for work and programs to 

be performed in subsequent years.

Plans to Remove the 

Contract Portion of Depot 

Maintenance from the 

Working Capital Fund

In February 2002, the Air Force began to consider financing the contract 

portion of the depot maintenance activity group with direct appropriations. 

In an April 19, 2002, memorandum, the Air Force stated that the overall 

financial health of the depot maintenance activity group has been 

negatively impacted by the contract operations. Further, without direct 

control over contractor costs, the working capital fund mechanism is an 

inappropriate choice for the contract operations. The memorandum 

directed the Air Force Materiel Command to begin planning for the 

transition of contract depot maintenance operations out of the working 

capital fund immediately. This would be a significant change in the 

financing and accounting for these contracts. Under the plan, contracts 

would be financed with direct appropriations, which is how the Army and 

Navy finance contract depot maintenance work, and carryover would no 

longer be associated with the work being performed by the contractor. 

Instead, funds would be managed in terms of the percent of funds obligated 

and expensed during a fiscal year. Further, the Air Force plans on using 

existing direct appropriation fund systems to track repairs and account for 

the funds and would not use its current working capital fund systems. 

6

U.S. General Accounting Office, Defense Working Capital Fund: Improvements Needed 

for Managing the Backlog of Funded Work, GAO-01-559 (Washington, D.C.: May 30, 2001).
Page 7 GAO-02-623 Air Force Depot Maintenance

Reported Carryover 

Exceeded DOD 

Standard but Is 

Unreliable and 

Understated

The lack of accurate carryover information results in the Congress and 

DOD officials not having the information they need to oversee and manage 

the repair of assets. Air Force reports show that the contract portion of the 

depot maintenance activity group exceeded the 4.5-month carryover 

standard at the end of fiscal years 2000 and 2001 by about $44 million and 

$134 million, respectively, thereby resulting in more funds being provided 

than allowed by the DOD carryover standard. However, we found that the 

reported carryover balance did not accurately reflect the amount of 

unfinished work on hand at the end of fiscal year 2000 due to (1) faulty 

assumptions used in calculating work-in-process and (2) records not 

accurately reflecting work that was actually completed by year-end. As a 

result, the amount of carryover reported by the Air Force was understated 

by tens of millions of dollars.

Air Force reports show that the contract portion of the depot maintenance 

activity group exceeded the 4.5-month carryover standard at the end of 

fiscal years 2000 and 2001. The Air Force reported that it had about

$835 million, which is 4.7 months, of carryover at the end of fiscal year 

2000, and about $1.1 billion, which is 5.1 months, at the end of fiscal year 

2001. In the past, the Office of the Under Secretary of Defense 

(Comptroller) and/or the congressional defense committees used carryover 

information to determine whether the working capital fund activity groups 

had too much carryover. For example, the Congress reduced the Army’s 

and Air Force’s fiscal year 2001 Operation and Maintenance appropriations 

by $40.5 million and $52.2 million, respectively, because the depot 

maintenance operations in their working capital funds had too much 

carryover. Similarly, in 2001, the Under Secretary of Defense (Comptroller) 

reduced the Air Force’s fiscal year 2003 customers’ budget requests by $185 

million because the contract portion of the depot maintenance activity 

group would have too much carryover at the end of fiscal year 2003.

Work-In-Process 

Calculation Is Based on 

Faulty Assumptions

As stated previously, carryover is the amount of unfilled orders less the 

amount of work-in-process. We found that the Air Force does not have 

actual information on the amount of work-in-process performed by 

contractors and, therefore, uses a formula to estimate the amount based on 

the assumption that the contractor will start and complete work as 

planned. However, the assumptions were faulty because the contractors 

did not always start and/or complete the work as planned. Using its 

formula, the Air Force reduced the amount of unfilled orders due to workin-process by about $1 billion, which is 5.6 months, and $835 million, which 
Page 8 GAO-02-623 Air Force Depot Maintenance

is 4.1 months, in fiscal year 2000 and fiscal year 2001, respectively, to 

determine the amount of carryover for these 2 years.

The amount of work-in-process recorded monthly is affected or is 

determined by the nature of the work, the estimated/actual start date of the 

work, and the expected time to complete the work. For work that is 

planned to be completed in less than 150 days, the Air Force assumes that 

one-fifth of the work will be completed each month and records work-inprocess accordingly. The calculation for the different workload categories 

is outlined below.

• For workload categories involving exchangeable inventory items, other 

major end items, and software, the amount of work-in-process is based 

on when the work is planned to begin and assumes that the work will be 

completed within 5 months. Thus, the contractor does not have to begin 

actual work, and the items to be repaired do not even have to be at the 

contractors’ plant in order to record work-in-process on those specific 

orders.

• For workload categories involving aircraft, engines, and missiles, the 

amount of work-in-process is based on when the work actually begins at 

the contractor’s plant and assumes that the work will be completed 

within 5 months from that point in time.

For work planned to be completed in more than 150 days, the Air Force has 

a different calculation to determine the amount of work-in-process. The 

calculation for the different workload categories is outlined below.

• For workload categories involving exchangeable inventory items, other 

major end items, and software, the amount of work-in-process is based 

on when the work is planned to begin and assumes that the work will be 

completed in the estimated number of days as planned. For example, if 

the Air Force estimates that the work will be completed in 1 year, it will 

record one-twelfth of the amount of the order as work-in-process each 

month. The contractor does not have to begin actual work in order to 

start recording work-in-process. 

• For workload categories involving aircraft, engines, and missiles, the 

amount of work-in-process is based on when the work actually begins at 

the contractor’s plant and assumes that the work will be completed in 

the estimated number of days as planned.
Page 9 GAO-02-623 Air Force Depot Maintenance

For fiscal years 2000 and 2001, the amount of reported work-in-process had 

a significant impact on the amount of carryover, reducing each fiscal year’s 

carryover by at least $835 million. Table 1 shows the actual reported yearend unfilled orders, work-in process, and carryover, in dollars and months 

for fiscal year 2000 and fiscal year 2001. It also shows the amount of 

carryover in excess of the 4.5-month standard.

Table 1: Unfilled Orders, Work-In-Process, and Carryover at the End of Fiscal Year 2000 and Fiscal Year 2001

a

Figures do not add due to rounding.

b

In accordance with DOD policy, beginning in fiscal year 2001, the Air Force began excluding certain 

work, such as work for foreign countries, from its carryover. In May 2001, we recommended in 

GAO-01-559 that DOD clarify its policy on these adjustments, and DOD is currently reviewing its policy 

on calculating carryover.

Source: Air Force budget and accounting reports.

According to Air Force Materiel Command officials, the primary reason 

that they exceeded the 4.5-month standard for fiscal year 2001 was the 

receipt of a large amount of orders late in the fiscal year. Specifically, 

actual customer orders exceeded planned customer orders by $311 million 

for fiscal year 2001, with $292 million of that amount received in August 

2001. Large quantities of orders placed late in the fiscal year provide the 

Air Force limited opportunity to perform the work by the end of the fiscal 

year.

Air Force officials also stated that the current systems used by contract 

depot maintenance cannot produce a reliable work-in-process amount. 

They further stated that the assumptions used for calculating work-inprocess do not provide an accurate work-in-process amount, particularly 

the assumption that the work will begin as planned. Air Force officials told 

Dollars in millions

Description

Fiscal year 2000 Fiscal year 2001

Dollar amount Number of months Dollar amount Number of monthsa

Unfilled orders $1,819.4 10.3 $1,965.7 9.5

Less work-in-process 984.9 5.6 835.5 4.1

Carryover 834.5 4.7 1,130.2 5.5

Air Force adjustment to carryoverb 0.0 0.0 68.9 0.3

Revised carryover 834.5 4.7 1,061.3 5.1

Carryover in excess of 4.5 month standard $43.5 $133.6
Page 10 GAO-02-623 Air Force Depot Maintenance

us, and we agree, that a more accurate way to calculate work-in-process 

would be to eliminate the assumption that the contractor will start work as 

planned and base all work-in-process calculations on when the contractor 

actually starts work. The officials said making such a change to the 

calculation would provide a financial incentive for contract depot 

maintenance to ensure that data on when the work actually started is 

entered into the system in a timely manner. The incentive to do so stems 

from the fact that contract depot maintenance bills customers based on the 

work-in-process amount that is recorded in the production and cost 

system. If work-in-process is based on when the contractor actually starts 

work, the depot maintenance activity group cannot bill customers until the 

date that the work actually started is recorded in the system.

Unfilled Order Data in the 

Production and Cost System 

Are Unreliable

As previously discussed, because the air logistics centers use the 

production and cost system to manage the work performed by contractors, 

it is critical that the unfilled order data be entered into the system in an 

accurate and timely manner. The data in this system are also used in the 

Air Force’s budget process and are the basis for determining the amount of 

carryover, which is reported to the Congress each fiscal year. However, we 

found that much of the unfilled order data in the system was inaccurate or 

incomplete because the production management specialists, who are 

primarily responsible for data accuracy, did not always (1) ensure that 

contractor production data in the system were correct or (2) enter contract 

information for new customer orders into the production and cost system 

in a timely manner, as the following two examples illustrate.

• Based on our analysis of a stratified random sample of unfilled 

maintenance requirements at the end of fiscal year 2000, we estimate 

that $256 million7

 of the work was actually completed but not reflected 

in the system because the production management specialists did not 

ensure that the data were correct.

• When contract depot maintenance receives a customer order for work, 

it enters into a contractual relationship for the performance of the work 

and then records information on the contract in the production and cost 

system. Any customer order for which there is no contractual 

information in the system is referred to as “unscheduled” work. We 

7

Estimate made at a 95 percent confidence level with a confidence interval of +/- $65 million.
Page 11 GAO-02-623 Air Force Depot Maintenance

found that as of September 30, 2000, contract depot maintenance had at 

least $59.9 million of unscheduled work for which the contracts were 

awarded but the contract information was not recorded in the system. 

Our analysis of the $59.9 million showed that $8.6 million was not 

entered into the system for at least 3 months to 5 months after the 

contracts were awarded, while about $15 million was not entered for at 

least 6 months or longer. For example, in one case, an order for 

$3.6 million was not entered in the system for 7 months after the 

contract was awarded. In another case, an order for $802,000 was not 

entered into the system for 20 months after the contract was awarded. 

In both cases, the lack of production management specialist oversight 

due to either heavy workload or inexperience was cited as the reason 

for not entering the data in a timely manner. Without the contract data 

in the system, there was no information in the system for managing 

repair actions and monitoring the status of the contracts.

We found that (1) in some cases, the production management specialists 

were not following the regulations regarding data accuracy, (2) in other 

cases, the production management specialists did not know the correct 

treatment for recording data accurately, and (3) standard operating 

procedures for use by the production management specialists did not exist 

to provide detailed instructions on their responsibilities for data accuracy. 

Air logistics center officials also told us that production management 

specialists need training that is specific to their day-to-day responsibilities 

and that such training would enhance the production management 

specialists’ awareness of the importance of data accuracy.

Air Force Materiel Command officials stated there is a data discipline 

problem that centered around the production management specialists not 

ensuring that the data in the production and cost system are correct and up 

to date. The officials attributed this problem, in part, to the lack of clear 

guidance and detailed operating procedures related to how the production 

management specialists should go about performing their day-to-day 

responsibilities. The officials further told us that there is a lack of internal 

controls or processes to ensure data accuracy, such as the use of metrics 

that could act as “red flags” to alert management to possible data problems. 

In discussing the data accuracy problem with Air Force headquarter 

officials, they told us that a contributing factor was the disruption to 

operations when the Air Force hired about 150 new production 

management specialists in fiscal year 2000 because of the closing of two air 

logistics centers and transferring the oversight of their contracts to the 

remaining centers.
Page 12 GAO-02-623 Air Force Depot Maintenance

New System Effort 

Terminated

Since 1996, the Air Force has recognized the need to improve the reliability 

of the data in the production and cost system and, until February 2002, was 

developing a new system, the Contract Maintenance Accounting and 

Production System—known as G501—to accomplish this. According to Air 

Force officials, implementing the new system would have helped alleviate 

the type of data problems we found because it was to be a single, fully 

integrated real-time web-based system, which, among other things, would 

have streamlined contractor reporting of production data. The Air Force 

had planned to implement the new system at the three air logistics centers 

and at approximately 900 contractor facilities. The development of the 

new system initially started in 1996 as an effort to redesign the existing 

production and cost system. It was later decided that this system and two 

other legacy systems that currently perform production and accounting 

functions for the contract portion of the depot maintenance activity group 

needed to be replaced since they interacted with each other. Thus, in 

September 1999, a contract was awarded for the development project with 

an estimated completion date of December 2001, which was later revised to 

fiscal year 2005.

In February 2002, the Air Force began to consider stopping its financing of 

the contract portion of the depot maintenance activity group in the working 

capital fund. As a result, the Air Force has stopped working on developing 

the new system after spending about $7.8 million. The Air Force plans to 

use other systems to perform the production and accounting functions. 

Causes of Reported 

Carryover

Our analysis of about $1.6 billion of reported unfilled orders showed that a 

substantial amount of the work that the activity group carried over into 

fiscal year 2001 was work that it had planned to complete prior to the end 

of fiscal year 2000 but did not due to logistical and production problems. 

Specifically, we estimated that about $530 million8

 of work was not 

completed for two key reasons. First, repairs took longer than planned 

primarily because (1) parts needed to perform the repairs were not 

available from DOD, (2) more work was needed to repair the assets than 

originally planned by the Air Force, and (3) contractors had capacity 

constraints related to personnel, facilities, and equipment. Second, work 

on some assets was not started as planned because of the delayed 

induction of items into production at contractors’ facilities. Further, we 

8

Estimate made at a 95 percent confidence level with a confidence interval of +/- $81 million.
Page 13 GAO-02-623 Air Force Depot Maintenance

could not determine the causes for an estimated $191 million9 of work not 

being done primarily because Air Force officials could not provide reliable 

information on the status of contracts that were previously managed by the 

two air logistics centers that were closed in fiscal year 2001.

In addition, we estimated that about $657 million10 of the unfilled orders 

that the activity group carried over into fiscal year 2001 was for work that 

was planned to be completed in fiscal year 2001. Since this work was 

expected to be carried over, we classified it as normal carryover. The 

results of our analysis are summarized in table 2 and discussed in greater 

detail in the following sections.

Table 2: Causes of the Depot Maintenance Activity Group’s Unfilled Orders as of 

September 30, 2000

Repair Problems Are a 

Major Cause of Carryover

As shown in table 2, we estimated that about $322 million11 of the activity 

group’s unfilled orders as of September 30, 2000, were for work that was 

scheduled to be completed prior to September 30, but was not completed 

by then because of longer than expected repair times. As the following 

examples illustrate, our work showed that the primary causes of these 

longer than expected repair times were (1) shortages of component parts, 

(2) unanticipated problems, and (3) contractor capacity constraints.

9

Estimate made at a 95 percent confidence level with a confidence interval of +/- $58 million.

10Estimate made at a 95 percent confidence level with a confidence interval of 

+/- $58 million.

Cause

Dollars in millions

Point estimate

Confidence interval at 95%

confidence level

Repair problem $322.4 +/- $61.7

Induction problem $208.0 +/- $53.2

Unknown problem $191.3 +/- $57.5

Normal carryover $656.8 +/- $58.3

11Estimate made at a 95 percent confidence level with a confidence interval of

+/- $62 million.
Page 14 GAO-02-623 Air Force Depot Maintenance

Shortages of Component Parts For the exchangeable and engine workload categories, a shortage of 

component parts was a major cause of untimely repairs. For example, a 

requirement for the repair of a leading-edge aircraft part12 was placed on a 

contract in December 1999 for a unit sales price of $39,268 and with an 

expected completion date of June 2000. In January 2000, the contractor 

inspected the item and determined that defective seals would have to be 

replaced. Because the seals were government-furnished material, the 

contractor submitted a requisition to the Defense Logistics Agency. When 

the seals had not arrived by the expected delivery date (May 2000), the 

contractor requisitioned them again and, when the Defense Logistics 

Agency subsequently advised the contractor that the seals were not 

available, the contractor requested and was granted permission to 

manufacture them. As of November 2001, the projected completion date 

for the manufacture of the seals was March 2002, and the leading-edge 

aircraft part was expected to be repaired and available for shipment to the 

customer almost immediately after that—about 21 months longer than 

expected.

The Air Force Materiel Command recently completed a study of this longstanding and well-documented problem13 that the Air Force refers to as 

“awaiting parts.” Additionally, it developed an action plan to correct some 

of the underlying causes of the awaiting parts problem that were identified 

in the study. The scope of both the study and the action plan was limited to 

depot maintenance work that is performed in-house at the three air 

logistics centers and did not cover the contract portion of the activity 

group. 

Air Force Materiel Command officials have acknowledged that contract 

depot maintenance has unique awaiting parts problems because the 

contract portion of this activity group uses different systems than the inhouse portion of the group. They indicated that the plan to remove 

contract depot maintenance operations from the Air Force Working Capital 

Fund and to discontinue, as previously discussed, the development of the 

new production and cost system have caused them to put virtually all 

contract depot maintenance initiatives on hold.

12The leading edge is a part located in front of the engine on a C-5 aircraft that helps direct 

air into the engine.

13This problem is discussed in our report entitled, U.S. General Accounting Office, Air Force 

Supply: Management Actions Create Spare Parts Shortages and Operational Problems, 

GAO/NSIAD/AIMD-99-77 (Washington, D.C.: April 29, 1999).
Page 15 GAO-02-623 Air Force Depot Maintenance

Unanticipated Problems Unanticipated problems were another major cause of repairs not being 

performed as planned, especially for the aircraft workload category. For 

example, for the last several years, the contract repair of KC-135 aircraft, 

which have an average age of about 40 years, has been a large and 

problematic workload. Specifically, due primarily to unanticipated 

problems, such as the need for major structural repairs, work on these 

aircraft has taken much longer than expected to complete. According to 

data in the production and cost system, as of September 30, 2000, a 

contractor had not completed work on 11 KC-135 aircraft that were 

originally scheduled to be completed during fiscal year 2000 and two 

aircraft that were originally scheduled to be completed during fiscal years 

1997 and 1999, respectively. Additionally, as of September 30, 2000, another 

contractor had not completed work on 16 KC-135 aircraft that were 

originally scheduled to be completed during fiscal years 1999 and 2000.

The magnitude of this problem is illustrated in table 3, which compares the 

initial and actual repair times for KC-135 aircraft at the second contractor’s 

facilities during fiscal years 1999 and 2000.

Table 3: Delayed Repair Times for KC-135 Aircraft Due to Unanticipated Work 

a

Does not include one aircraft that work was started on in September 1999 and was still not finished as 

of February 2002.

b

Does not include one aircraft that work was started on in November 1999 and was still not finished as 

of February 2002.

Source: Aircraft and Missile Maintenance Production/Compression Report.

Altogether, the 29 KC-135 aircraft that were scheduled to be completed 

prior to the end of fiscal year 2000, but were not, had an unfilled order 

value of about $86.6 million.

Contractor Capacity Constraints Contractor capacity constraints are a third cause of repair problems. For 

example, one of the items in the sample was a $1.4 million requirement to 

repair 15 power supply units at a unit sales price of $94,879 and with an 

estimated repair time of 45 days. All work on this item, which is a 

component of an electronic warfare system, was scheduled to be 

completed by June 30, 2000. However, as of September 30, 2000, only eight 

Fiscal year

Number of aircraft

repaired

Average negotiated

repair days

Average actual

repair days Variance

1999 11a 202 433 231

2000 21b 175 418 243
Page 16 GAO-02-623 Air Force Depot Maintenance

items had been repaired and, as of September 30, 2001, one item had still 

not been repaired. The prime contractor attributed the delayed repairs to 

personnel constraints. Specifically, at one time, there was a steady repair 

workload for this item, and a subcontractor employed three to four people 

to work on nothing but this requirement. When the workload declined, the 

subcontractor released all but one of the employees trained to make the 

repairs. According to the prime contractor, when an order was received in 

late 1999, the subcontractor had difficulty finding qualified people to do the 

work. However, the prime contractor also indicated that the subcontractor 

has gradually redeveloped a repair capability in this area, is now repairing 

two items a month, and expects to build up his capability to three a month 

in the near future. 

Delayed Induction of Assets 

Is Another Major Cause of 

Carryover

As shown in table 2, we estimated that about $208 million14 of the activity 

group’s unfilled orders as of September 30, 2000, were for work that was 

scheduled to be completed prior to September 30, but was not completed 

by then because work on the items was not started as planned at 

contractors’ facilities. A $9.8 million order to repair 24 exchangeable 

inventory items is an example of a requirement that we placed in the 

delayed induction category. In this case, the estimated repair time was 90 

days, and data in the production and cost system indicated that the 

contractor was expected to complete work on all 24 items by the end of 

fiscal year 1999. However, as of the end of fiscal year 2000, the contractor 

had received only 19 of the inventory items. The remaining five inventory 

items—which had an unfilled customer order value of about $2 million—

were not received by the contractor until the third quarter of fiscal year 

2001 and we, therefore, included $2 million in the delayed induction 

category.

One of the underlying causes of the activity group’s induction problem is 

that the Air Force Materiel Command has not established effective internal 

control procedures to ensure that production management specialists are 

complying with its policy guidance. For example, Air Force Materiel 

Command Instruction 21-113 states that, at a minimum, “review of asset 

generation should be done on a quarterly basis and, if assets will not 

generate within a reasonable period of time (60 days), the scheduled input 

quantities and obligated dollars must be reduced accordingly.” However, 

14Estimate made at a 95 percent confidence level with a confidence interval of 

+/- $53 million.
Page 17 GAO-02-623 Air Force Depot Maintenance

our analysis showed and the Air Force Materiel Command agreed that 

there is no systematic process or effective internal controls to ensure that 

the production management specialists are complying with this guidance. 

A second cause is that some of the guidance is inconsistent. For example, 

Air Force Materiel Command Instruction 21-113, “Contract Maintenance 

Program for Depot Maintenance Activity Group (DMAG),” states that work 

must be started on at least one asset during the fiscal year that an order is 

placed. However, the Air Force Logistics Command supplement to Air 

Force Regulation 170-8 states that the contract depot maintenance activity 

group has until December 31 to get a customer’s requirement in a contract 

(January 31 for some requirements). Accordingly, one regulation requires 

work to be started on an asset before the fiscal year-end, but another 

regulation does not even require that the contract be awarded until the end 

of the calendar year.

The Activity Group Is Not 

Managing a Major Portion of 

Its Contract Workload

As shown in table 2, we could not determine the cause of the problem for 

about $191 million15 of unfilled orders that were scheduled to be completed 

prior to September 30, 2000, but were not. We could not make this 

determination because production management specialists did not have 

documentation on the status of the repairs needed to make this 

determination. The two primary reasons that information was not 

available were that production management specialists (1) did not have 

required documentation for many of the contracts that were transferred 

from the Sacramento and San Antonio Air Logistics Centers to two of the 

three remaining centers in October 2000 and (2) did not maintain 

information on the status of software projects.16

Inadequate Documentation on 

Transferred Contracts Prevents 

Effective Management

In October 2000, the Sacramento and San Antonio Air Logistics Centers 

discontinued their contract depot maintenance operations17 and 

transferred management responsibility for their contracts to the three 

15Estimate made at a 95 percent confidence level with a confidence interval of

+/- $58 million.

16Although this problem applied primarily to software workloads, we found similar 

problems with other workloads that have an output expressed as a level of effort, such as 

months or hours of work, rather than items repaired.

17In fiscal year 2001, the Air Force completed the closure of the Sacramento and San 

Antonio Air Logistics Centers, as directed by the 1995 Base Realignment and Closure 

Commission.
Page 18 GAO-02-623 Air Force Depot Maintenance

remaining centers (Warner Robins, Oklahoma City, and Ogden). As part of 

this management transfer, the Sacramento and San Antonio centers 

shipped contract files and related customer order files to the three centers 

that assumed responsibility for the work. However, in many instances, two 

of the centers that assumed responsibility for the work either did not 

receive the required files or received incomplete files. Additionally, for the 

files they did receive, they found numerous and significant discrepancies 

between the information in the contract files and related customer files. 

Discrepancies were also found between these manual records and the data 

in the production and cost system. As a result of these problems, two of 

the three remaining centers have had to reconstruct many of the files and 

reconcile numerous discrepancies.18 Because the Air Force does not know 

the status of these contracts, (1) it is potentially vulnerable to paying for 

goods and services not received or performed and is subject to fraud, 

waste, and abuse, (2) work may have been accomplished but not recorded 

in the system, or (3) the Air Force may not be taking prompt and 

appropriate action to resolve problems that are delaying the completion of 

the work. 

A contract depot maintenance manager at one of the remaining centers 

characterized this records reconstruction and reconciliation effort as 

“overwhelming.” Specifically, he noted that his center had assumed 

responsibility for 627 contracts (about 20 percent of its total workload), 

and pointed out that the contracts went back to 1981 and each contract 

could have as many as 800 line items. The manager also stated that, as of 

October 2001 (1 year after the transfer), center staff had not even looked at 

many of the contracts and had unreconciled problems with many of the 

contracts that they had reviewed. To further illustrate the magnitude of the 

reconciliation problem, he pointed out that their research thus far had 

determined that (1) they did not have contracts for $41 million of work that 

was recorded in the production and cost system and about $3 million in 

contractor payments, (2) the production and cost system contained no 

information on 74 contracts with a total contract amount of $12.6 million, 

18We did not find this to be a significant problem at one of the remaining air logistics centers 

primarily because an entire product directorate, including key personnel from the contract 

depot maintenance function, transferred with the workload from one of the closing air 

logistics centers. Personnel from the contract function brought the contract information 

(e.g., contract files) with them in order to avoid any problems with missing data. According 

to officials at the remaining center, the work that the transferred product directorate 

performs accounts for about 65 percent of the remaining center’s total workload.
Page 19 GAO-02-623 Air Force Depot Maintenance

and (3) contractors were providing automated production data for less 

than 15 percent of the transferred contracts.

The lack of documentation for contracts that were transferred from a 

closing facility had resulted in the lack of management oversight. For 

example, 10 of the sample items, with a total unfilled order value of 

$4.5 million as of September 30, 2000, were requirements for work on hush 

houses19 that were contracted for by one of the closing air logistics centers. 

Work on several of these hush houses was supposed to be completed prior 

to the end of fiscal year 2000, and work on all of them was supposed to be 

completed prior to the end of fiscal year 2001. However, as of December 

2001, the air logistics center that assumed management responsibility for 

the contracts was still trying to determine the status of the work since it 

had not received the required documentation from the closing center.

The two centers that have a significant problem in this area have recently 

dedicated several personnel to the resolution of problems related to the 

transferred contracts. However, this work is a time-consuming and laborintensive process, and the Air Force Materiel Command has not established 

either a milestone for completing the work or a methodology for 

monitoring progress. Consequently, it is uncertain when the centers will 

have all of the information they need to manage these transferred 

contracts. 

Lack of Actual Production Data 

Makes Software Unfilled Order 

Data Highly Questionable

We estimate that $68 million20 of the unfilled orders in the software 

workload category of the sample was for work that was scheduled to be 

completed prior to September 30, 2000, but was not completed as of that 

date. However, we were unable to determine why the completion of this 

work was delayed because production management specialists are not 

required to monitor the status of software projects and did not have the 

documentation needed to identify problems and determine their underlying 

causes. 

For most nonsoftware workloads, the requirement is to repair a specific 

quantity of items within a specified period of time, and contractors are 

19Hush houses are structures that contain noise suppression systems. They are used to 

reduce the noise associated with engine tests.

20Estimate made at a 95 percent confidence level with a confidence interval of

+/- $10 million.
Page 20 GAO-02-623 Air Force Depot Maintenance

required to submit automated production reports that show when they

(1) receive the items that are to be repaired, (2) started work on the items, 

(3) complete the repairs, and (4) ship repaired items to customers. 

Additionally, production management specialists are required to develop 

schedules that show when work on the items is scheduled to start and 

when repairs are expected to be completed. If done properly, this 

approach ensures that production management specialists have the 

information they need to (1) monitor the status of the work, (2) identify 

problems, and (3) take prompt corrective action, when appropriate.

However, for software workloads, the requirement is not to repair a certain 

number of items, but rather to accomplish certain tasks. For example, the 

task could be to (1) attend and support any lab, ground, and flight tests 

performed on a weapon system, (2) analyze test data, or (3) revise weapon 

system software that does not perform as intended, such as an electronic 

warfare system that does not perform effectively in high electro-static 

environments. As a result, most software workloads are expressed as a 

level of effort, such as in number of hours or months to be worked.

Because production management specialists do not have reliable data on 

the status of software projects, the “actual” production data that they enter 

into the production and cost system are estimates that are based on the 

frequently erroneous assumption that work will begin and be accomplished 

as planned. This problem, which is similar to the previously discussed 

problem with the activity group’s work-in-process data, makes the reported 

value of software unfilled orders highly questionable. Further, because the 

reported value of software carryover is based on highly questionable 

estimates for both work-in-process and undelivered orders, it cannot be 

relied on.

Conclusions The Air Force does not have reliable information on the dollar amount of 

carryover for its contract depot maintenance operation due to faulty 

assumptions used in calculating work-in-process and records not 

accurately reflecting work done at year-end. Until the problems are 

corrected, congressional and Defense decisionmakers will be forced to 

make key budget decisions, such as whether or not to enhance or reduce 

customer budgets, based on unreliable information. In addition, due to 

logistical and production problems, hundreds of millions of dollars of work 

was not done as planned and was carried over into the next fiscal year. 

These problems resulted in idle funds that could have been used for nearterm readiness or other priorities. For the contract portion of this activity 
Page 21 GAO-02-623 Air Force Depot Maintenance

group to operate more effectively, managers at the Air Force Materiel 

Command and the air logistics centers must be held accountable for (1) the 

accuracy and timeliness of the production and financial management 

information used for decision-making and (2) ensuring that the work is 

completed as planned. Until these weaknesses are resolved, concerns will 

continue to be raised about the amount of carryover related to the contract 

portion of this activity group. 

Recommendations for 

Executive Action

We recommend that the Secretary of the Air Force direct the Commander, 

Air Force Materiel Command, to do the following. 

• Use the date contractors actually start work, rather than the planned 

start date, to calculate work-in-process for all workload categories as 

long as the contract portion of the activity group remains in the working 

capital fund.

• Improve the accuracy of the data in its systems that track repair actions 

and account for costs by (1) holding managers accountable for ensuring 

the accuracy of the data, (2) developing standard operating procedures 

that provide detailed guidance on production management specialists’

day-to-day responsibilities, particularly in the area of ensuring data 

accuracy, (3) providing additional training to production management 

specialists on these procedures, and (4) developing metrics that act as 

“red flags” to alert management of possible data problems. At a 

minimum, the systems should provide timely and accurate information 

on when contractors receive broken items for repair, repair work starts 

on the items, repairs are completed, and repaired items are returned to 

customers. 

• Develop accurate and complete information on contracts that were 

awarded by the San Antonio and Sacramento Air Logistics Centers and 

subsequently transferred to the three remaining centers to avoid loss of 

control that may result in fraud, waste, and abuse. This will require, at a 

minimum, (1) establishing milestones for completing both the review of 

transferred contracts and resolving data problems identified during the 

reviews, (2) using metrics to monitor progress, and (3) ensuring that 

sufficient resources are dedicated to the resolution of the problem. 

• Identify the underlying causes of the contract depot maintenance 

“awaiting parts” problem. 
Page 22 GAO-02-623 Air Force Depot Maintenance

• Develop an action plan to address the underlying causes for the 

“awaiting parts” problems similar to the plan that was recently 

developed to address the “awaiting parts” problems for the air logistics 

centers’ in-house depot maintenance operations.

• Provide clear and consistent guidance on how, when, and by whom the 

induction of assets should be monitored. 

• Establish internal control procedures to ensure that the guidance on the 

induction of assets is followed.

Agency Comments and 

Our Evaluation

DOD provided written comments on a draft of this report. DOD concurred 

with our seven recommendations and identified actions it was taking to 

correct the identified deficiencies. For example, to improve the accuracy 

of the data in its systems that track repair actions and account for costs, 

the Air Force is in the process of developing and providing training courses 

to the production management specialists. DOD’s comments are reprinted 

in appendix III.

We are sending copies of this report to the Secretary of Defense; the 

Secretary of the Air Force; the Chairmen and Ranking Minority Members of 

the Senate Committee on Armed Services; the Subcommittee on Readiness 

and Management Support, Senate Committee on Armed Services; the 

Subcommittee on Defense, Senate Committee on Appropriations; the 

House Committee on Armed Services; the Subcommittee on Military 

Readiness, House Committee on Armed Services; the Ranking Minority 

Member, Subcommittee on Defense, House Committee on Appropriations; 

and other interested parties. Copies will be made available to others upon 

request. Please contact Greg Pugnetti, Assistant Director, at (703) 695-6922 
Page 23 GAO-02-623 Air Force Depot Maintenance

if you or your staff have any questions concerning this report. Other key 

contributors to this report are listed in appendix IV.

Sincerely yours,

Gregory D. Kutz,

Director, Financial Management and Assurance

David R. Warren,

Director, Defense Capabilities and Management
Page 24 GAO-02-623 Air Force Depot Maintenance

Appendix I

Scope and Methodology ApApenednxidexiIs

To determine if the reported carryover balances accurately reflected the 

amount of unfinished work on hand at the end of fiscal year 2000, we 

obtained and analyzed the air logistics centers’ logistical and financial 

reports that provided information on unfilled orders. We also reviewed the 

computation that the Air Force uses to determine the dollar amount and 

number of months of carryover. This computation is the dollar amount of 

unfilled orders at fiscal year-end less the dollar amount of work-in-process 

which equates to the amount of funds that carryover to the next fiscal year. 

We reviewed the two factors (unfilled orders and work-in-process) that are 

used in the computation and obtained documentation that supported the 

information. Since the work-in-process amount is a calculated figure and is 

not based on actual work performed by the contractors, we obtained and 

analyzed the methodology used by the Air Force Materiel Command and 

the air logistics centers to compute the amount of work-in-process. In 

addition, to determine if any of the work had actually been completed, we 

selected and reviewed a stratified random sample of unfilled orders.

To identify the primary causes of contract depot maintenance carryover, 

we reviewed a stratified random sample of 369 contract depot maintenance 

requirements that, according to the group’s production and cost system, 

had been funded by customers, but not yet completed by contractors as of 

September 30, 2000. These 369 depot maintenance requirements were 

selected from five major workload categories (aircraft, engines, 

exchangeable inventory items, missiles and other major end items, and 

software). They accounted for $744.1 million, about 41.2 percent, of the 

$1.806 billion of unfilled orders that the activity group reported at the end 

of fiscal year 2000. Of the $1.806 billion, about $124 million of the 

September 30, 2000, unfilled orders were customer requirements that, 

according to the production and cost system, had not yet been placed on 

contract. These requirements and an additional $48 million of relatively 

small orders were excluded from our analysis. The remaining $1.634 billion 

represents total unfilled orders. The confidence level used for estimating 

the value of completed and uncompleted work was 95 percent and the 

expected tolerable amount in error (test materiality) was $163,392,642. See 

appendix II for the Sample Element Disposition Table. Table 4 discloses 

the estimates and confidence intervals in total and individually for normal 

carryover, total problem carryover, and each of the carryover problems for 

the carryover balances as of September 30, 2000.
Appendix I

Scope and Methodology

Page 25 GAO-02-623 Air Force Depot Maintenance

Table 4: Population Estimates as of September 30, 2000, for Normal and Problem Carryover Balances

a

Normal carryover--an unfilled order at the end of a fiscal year that is planned to be completed after 

fiscal year 2000 because the order arrived too late in the fiscal year for production to be completed or 

the nature of the work required a long time.

b

Problem carryover--an unfilled order at the end of a fiscal year that was planned to be completed by 

the end of the fiscal year but for various reasons was not completed, according to the contract 

production and cost system.

c

Induction problem--work not started at contractor facilities as of September 30, 2000, as scheduled or 

was started late in the fiscal year, which prevented the work from being completed as planned.

d

Repair problem--work not repaired by the contractor as planned because of a parts problem, a 

capacity problem, such as manpower shortages, or more work needed to be performed than originally 

planned.

e

Unknown problem--neither air logistics center officials nor we could determine the cause or the dollar 

amount of work not completed as planned as of September 30, 2000, because the information was not 

available.

f Reporting problem--work that was completed as of September 30, 2000, but shown as not completed 

in the contract production and cost system.

We obtained information on the contractor performing the work, financial 

data, and production data for each item in the sample from the production 

and cost system. This information follows: (1) contract number, 

(2) contract line item number, (3) end item identity, (4) fiscal year of order 

financing the work, (5) production management specialist office 

responsible for overseeing the work, (6) unit sales price for the work, 

(7) quantities of items planned to be repaired and when, (8) quantities of 

items repaired as of September 30, 2000, and September 30, 2001, and 

(9) dollar amount of unfilled orders as of September 30, 2000. We analyzed 

the above information to determine if the work was accomplished in fiscal 

year 2000 as planned and, if not, we obtained explanations from the air 

logistics centers about why the work was not completed.

Dollars in millions

Description

Problem carryover and type of problem 

Normal

carryovera

Total problem

carryoverb

Induction

problemsc

Repair

problemsd

Unknown

problemse

Reporting

problemsf

Point estimate $656.8 $721.3 $208.0 $322.4 $191.3 $255.8

Confidence interval +(-) @ 95% 

confidence level

$58.3 $72.2 $53.2 $61.7 $57.5 $65.3

Lower error limit $598.5 $649.2 $154.8 $260.7 $133.8 $190.5

Upper error limit $715.1 $793.5 $261.2 $384.0 $248.8 $321.0
Appendix I

Scope and Methodology

Page 26 GAO-02-623 Air Force Depot Maintenance

We performed our review at the headquarters offices of the Under 

Secretary of Defense (Comptroller) and the Secretary of the Air Force, 

Washington, D.C.; Air Force Materiel Command, Wright-Patterson Air 

Force Base, Ohio; the Oklahoma City Air Logistics Center, Tinker Air Force 

Base, Oklahoma; the Ogden Air Logistics Center, Hill Air Force Base, Utah; 

and the Warner Robins Air Logistics Center, Robins Air Force Base, 

Georgia. Our review was performed from July 2001 through May 2002 in 

accordance with U. S. generally accepted government auditing standards. 

The production and financial information referred to in this report was 

provided by the Air Force. We worked with Air Force officials to validate 

the reliability of the information in the system to determine the reasons for 

the work not being completed at the end of fiscal year 2000. We requested 

comments on a draft of this report from the Secretary of Defense or his 

designee. DOD provided written comments and these comments are 

presented in the “Agency Comments and Our Evaluation” section of this 

report and are reprinted in appendix III. 
Page 27 GAO-02-623 Air Force Depot Maintenance

Appendix II

Sample Element Disposition Table ApendxiI
Appendix II

Sample Element Disposition Table

Page 28 GAO-02-623 Air Force Depot Maintenance

Source: GAO.
Page 29 GAO-02-623 Air Force Depot Maintenance

Appendix III

Comments from the Department of Defense ApendxiI
Appendix III

Comments from the Department of Defense

Page 30 GAO-02-623 Air Force Depot Maintenance
Appendix III

Comments from the Department of Defense

Page 31 GAO-02-623 Air Force Depot Maintenance
Page 32 GAO-02-623 Air Force Depot Maintenance

Appendix IV

GAO Contact and Staff Acknowledgments ApendxiIV

GAO Contact Greg Pugnetti, (703) 695-6922

Acknowledgments Staff who made key contributions to this report were Sharon Byrd, 

Francine DelVecchio, Karl Gustafson, William Hill, Ron Tobias, and Eddie 

Uyekawa.

(192027)
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