**GAO-04-498**                      Published: Jun 17, 2004. Publicly Released: Jun 17, 2004.                  

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## Highlights

The Air Force depot maintenance activity group in-house operations generate about $5 billion in annual revenue principally by repairing aircraft, missiles, engines, and other assets. In doing so, the group operates under the working capital fund concept, where customers are to be charged the anticipated costs of providing goods and services to them. The group's average price for in-house work almost doubled between fiscal years 2000 and 2004 from $119.99 per hour to $237.84 per hour. GAO was asked to determine (1) what factors were primarily responsible for the price increase, (2) if the prices charged recovered the reported actual costs of performing the work, and (3) if the Air Force has taken effective steps to improve efficiency and control the activity group's costs.

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## Topics

National Defense

Air Force facilitiesAir Force procurementAir Force suppliesAircraft maintenanceCost analysisEquipment maintenanceLabor costsMaintenance costsMilitary cost controlOverhead costsPrices and pricingProductivity in governmentPrice increases