United States General Accounting Office

GAO Report to Congressional Requesters

March 1998 DEFENSE DEPOT

MAINTENANCE

DOD Shifting More

Workload for New

Weapon Systems to the

Private Sector

GAO/NSIAD-98-8

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-279271 

March 31, 1998

Congressional Requesters

The Department of Defense (DOD) has a policy calling for greater reliance

on the private sector for maintenance of its weapon systems. This policy

includes a preference for contractors to provide total logistics support for

new weapon systems within the limits of existing legislative requirements.

As requested, this report addresses (1) DOD’s policy and implementation

plans for allocating depot-repair workloads for new and upgraded weapon

systems between the public and private sectors and (2) the process it uses

to make source-of-repair decisions.

Background This is one in a series of reports (see related GAO products at the end of

this report) addressing DOD’s depot maintenance policies, outsourcing

plans, depot closures, and the allocation of work between the public and

private sectors. This report analyzes the process DOD is using to determine

depot maintenance repair strategies for its new weapon systems and major

upgrades.

Depot maintenance is a key part of the total DOD logistics system that helps

to support the readiness and sustainability requirements of thousands of

major weapon systems and millions of equipment items. Depot

maintenance requires extensive shop facilities, specialized equipment, and

highly skilled technical and engineering personnel to perform major

repairs, overhauls, and modifications of weapons and components. In

fiscal year 1997, DOD spent a reported $12 billion on depot maintenance,

which is done by both public military depots and private sector

contractors.

Congress and DOD have had an ongoing debate concerning the size,

composition, and allocation of depot maintenance workload between the

public and private sectors. DOD’s management policies and plans continue

to evolve as it seeks to make greater use of private sector repair

capabilities while responding to congressional direction. Provisions

included in the National Defense Authorization Act for Fiscal Year 1998

provided further guidance from Congress regarding how DOD’s depot

maintenance program should be conducted. Finally, the recently

Page 1 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

announced Defense Reform Initiatives are likely to further impact DOD’s

management of this program.1

Depot Maintenance Policy

Debate

In recent years, DOD advisory groups and officials have called for

contracting out more depot maintenance work to the private sector. In its

May 1995 report, “Directions for Defense,” the Commission on Roles and

Missions (CORM) recommended that DOD move away from its current

reliance on public depots, in part, by outsourcing all work on new weapon

systems. The Defense Science Board (DSB), in a series of studies,2

 also

called for increased outsourcing, noting that DOD should get out of the

materiel management, distribution, and repair business by expanding

contractor logistics support to all fielded weapon systems.

The CORM and DSB studies estimated that outsourcing in a competitive

environment could reduce depot maintenance costs by 20 to 40 percent.

Based on findings of these reports, DOD has opted for a greater use of

private sector capabilities as a vehicle for achieving savings in support

operations that could be used for weapon system modernization. Our

reviews of these studies have found that, while there are opportunities to

reduce the costs of DOD’s logistics programs through such competitions,

projected cost savings by the CORM and DSB were overstated.3

In March 1996, DOD issued a new regulation4 containing the policies and

procedures for buying and supporting new weapon systems. The

regulation stated that new systems and major upgrade programs “shall

maximize the use of contractor provided, long-term, total life-cycle

logistics support that combines depot-level maintenance along with

wholesale and selected retail materiel management functions.” The

regulation further stated that program officials must obtain a waiver if

1

Reform initiatives call for (1) reengineering support activities to adopt best private sector business

practices, (2) consolidating defense management and support organizations, (3) eliminating excess

infrastructure through base closure and privatization, and (4) competing many more business

functions now performed in-house.

2

Defense Science Board Task Force on Privatization and Outsourcing Draft Interim Briefing

(Feb. 1996); Report of the DSB Task Force on Outsourcing and Privatization (Aug. 1996); and Report

of the DSB 1996 Summer Study on Achieving an Innovative Support Structure for 21st Century Military

Superiority: Higher Performance at Lower Costs (Nov. 1996).

3

Defense Depot Maintenance: Commission on Roles and Mission’s Privatization Assumptions Are

Questionable (GAO/NSIAD-96-161, July 15, 1996) and Outsourcing DOD Logistics: Savings Achievable

but Defense Science Board’s Projections Are Overstated (GAO/NSIAD-98-48, Dec. 8,1997).

4

DOD 5000.2-R, “Mandatory Procedures for Major Defense Acquisition Programs and Major Automated

Information System Acquisition Programs.”

Page 2 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

they wanted to use public support facilities. The regulation was revised in

October 1997 to remove the waiver requirement.

In April 1996, DOD issued its Policy Report Regarding Performance of

Depot-Level Maintenance and Repair. This report, which was developed

and submitted to Congress as required by the National Defense

Authorization Act for Fiscal Year 1996, set forth DOD’s plans to support

new and upgraded weapon systems in the private sector. The 1996

Authorization Act directed DOD to develop comprehensive depot policies

with the goal of eliminating legislative restrictions related to depot

maintenance workload allocations. DOD’s report endorsed the repeal of the

provision in 10 U.S.C. 2466, which at the time limited private-sector depot

maintenance funding to 40 percent of total annual depot maintenance

funding (a provision commonly referred to as the 60/40 rule). DOD’s report

also envisioned a reduction in workloads needed to retain public depot

core capabilities as required by 10 U.S.C. 2464. Core is defined by DOD as

the capabilities that DOD depots must retain to ensure a ready and

controlled source of repair to meet certain essential wartime demands,

promote competition, and sustain institutional expertise.

Congress did not respond favorably to DOD’s report. The House National

Security Committee noted that the report did not go far enough in

identifying core capabilities and, therefore, what must absolutely remain

in-house. The Senate Armed Services Committee found DOD’s report was

not responsive to congressional requirements and that the section in the

March 1996 regulation regarding depot support for new weapon systems

was inconsistent with current law and possibly inconsistent with national

security interests. The committees also criticized DOD for not allowing

public depots to compete for non-core work.5

 Congress did not repeal the

60/40 requirement at that time.

Fiscal Year 1998 Authorization

Act Contains Changes to Depot

Maintenance Legislation

The 1998 Defense Authorization Act provides changes to various depot

maintenance requirements. In summary, the act:

• Provides for a new section 2460 in title 10 of the U.S. Code, which for the

first time would establish a statutory definition of depot-level maintenance

and repair. The definition includes depot-level work performed under

interim and contractor logistics support arrangements, other similar

5

National Defense Authorization Act for Fiscal Year 1997, Report of the Committee on National

Security, House of Representatives, on H.R. 3230, May 7, 1996. National Defense Authorization Act for

Fiscal Year 1997, Report to Accompany S. 1745, Committee on Armed Services, U. S. Senate, May 13,

1996.

Page 3 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

contractor support arrangements, the installation of some modifications

and upgrades, and certain software maintenance. It excludes the

procurement of major system upgrades and safety modifications.

• Amends 10 U.S.C. 2464 to provide for a DOD-maintained core logistics

capability that is required to be government owned and operated. The

provision requires that the core capability include the capabilities that are

necessary for repairing new systems identified as requiring a core

capability (except special access programs, nuclear carriers, and

commercial items) within 4 years of the system’s achieving initial

operational capability.

• Amends 10 U.S.C. 2466 to allow DOD to use up to 50 percent of its depot

maintenance funds for private sector performance of the work.

• Provides for a new section 2469a in title 10 of the U.S. Code containing

special processes and procedures to be used in conducting competitions

for depot maintenance workloads at the closing San Antonio, Texas, and

Sacramento, California, depots.

• Provides for a new section 2474 in title 10 of the U.S. Code requiring the

Secretary of Defense to designate DOD depot-level activities as centers of

industrial and technical excellence, adopt best business practices to

improve their efficiency and cost-effectiveness, and provide for

public-private partnerships at these activities.

Provisions in the 1998 Authorization Act could significantly affect the

issues discussed in this report. A DOD team has begun evaluating potential

changes to core policies and depot workload allocations required by the

act. These could include revising the definition and composition of

workloads required to be maintained in the public depots as well as the

methodology for allocating specific maintenance workloads between the

public and private sectors. At the same time, DOD continues to propose

policy initiatives calling for increased use of contractor logistics support

for the life of new systems and fewer depot maintenance activities

performed in-house.

Results in Brief Overall, our work shows that DOD is moving to greater reliance on the

private sector for depot support of new weapon systems and major

upgrades. This condition reflects DOD’s shift from past policies and

practices, which generally preferred the public sector. DOD officials say

that the Department is doing this within the framework of existing

legislative requirements, while seeking legislative changes that would

allow it to make greater use of the private sector. We found that in those

programs where source-of-repair decisions have been made or where a

Page 4 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

specific source of repair is being strongly favored, these determinations

were not always well supported. Further, weaknesses existed in guidance

for implementing the decision-making process.

Specifically, our work shows that:

• Of 71 new system acquisition programs reviewed, 46 programs, or about

65 percent, have made a source-of-repair decision or are strongly leaning

toward one sector or the other. Of the 46 programs, 33 (about 72 percent)

are selecting the private sector for most repairs and 13 are selecting the

public sector. The other programs reviewed have either selected a mixed

workload utilizing both public and private sectors (12 programs) or are

undecided (13 programs).

• Uncertainty and unresolved issues related to DOD policy guidance, core

capabilities (workloads that must be kept in the public depots), and DOD’s

belief there may be changes in legislation relating to depot workload

allocation have caused several of the large acquisition programs to defer

long-term support decisions. In lieu of making a decision, these programs

were opting for some type of interim contractor support arrangement that

places initial support responsibilities with the original equipment

manufacturers. For example, the C-17 has deferred life-cycle support

decisions until 2003 or later and will rely on the prime contractor for

almost all logistics support and systems management tasks until then.

• Significant weaknesses exist in DOD’s implementation of the

decision-making process for determining depot-maintenance strategies for

new systems. Our review of programs where source-of-repair decisions

have been made showed that key factors were not always taken into

account during the decision process nor, when they were, were they

always consistently applied across programs. For example, cost

comparisons between public and private support options were not always

done as required or were inconclusive. Also, many managers were unsure

how or whether to consider other factors, particularly core capability

requirements. Further, programs differed in the extent to which they

coordinated with logistics officials, who are responsible for logistics

operations once the systems are fielded. Inconsistencies in the

decision-making process are partly attributable to changing and

contradictory guidance for making source-of-repair decisions and

uncertainties regarding public depot core capability requirements. DOD

revised its primary guidance in October 1997 and continues to examine

other possible changes.

Page 5 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

Greater Use Is Being

Made of Private

Sector Capabilities,

but Some Major

Decisions Are Still

Pending

Survey results from 71 new and upgraded weapon systems showed that,

consistent with DOD’s policy change, programs are deciding or leaning

toward having the private sector perform most of the depot maintenance.

The policy change is a clear shift from past experience, where programs

leaned more toward public-sector maintenance strategies. Also,

source-of-repair decisions for a number of new major programs, such as

the C-17, F-22, and F/A-18E/F aircraft and the Comanche helicopter, have

not been finalized or are pending. These are large acquisition programs

and therefore represent large future depot maintenance workloads

regardless of whether they are performed in the public or private sector.

Planning Leans Toward

Greater Use of the Private

Sector

As a general rule, life-cycle maintenance costs for new systems are

estimated at twice the system’s acquisition cost. We initially inquired

about the depot support plans for the 88 new weapon systems and major

upgrades that are generally the largest in DOD in terms of estimated

acquisition cost.6

 Based on responses to our inquiry, our analysis focuses

on the plans for 71 of these programs as summarized in table 1. (Of the

remaining 17 programs, we did not receive responses from 8;7

 7 other

programs are expected to have no or negligible depot maintenance,

according to DOD officials; and plans were not yet developed for 2.)

6

Eighty-four programs were classified by DOD as major defense acquisition programs as of October 28,

1996. A program is designated as major when estimated by the Under Secretary of Defense for

Acquisition and Technology to eventually cost more than $355 million for research, development, test,

and evaluation or more than $2.135 billion for procurement (in fiscal year 1996 constant dollars), or

when so designated by the Under Secretary. Four programs were designated as pre-major programs

that may eventually become major defense acquisition programs.

7

Six of the eight programs that did not respond were among the smaller programs in terms of total

acquisition cost. Two of the 8—the LPD-17 assault ship and the Theater High Altitude Defense

System—were among the higher cost programs but not in the top 10.

Page 6 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

Table 1: Reported Major Systems Source of Repair Decisions (as of June 1997) 

Service

Firm or leaning

to public sector

Mixeda public

and private

sectors

Firm or leaning

to private sector Undecided Total

Army 7 3 2 3 15

Navy 2 4 13 3 22

Air Force 4 3 13 5 25

DOD/BMDOb 0 2 5 2 9

Total programs 13 12 33 13 71

Percent of total 18% 17% 47% 18%

Note: In this table, we define “firm or leaning to” as meaning that a program has officially decided

or has indicated a decided preference for either the public DOD depots or private contractor

sources for the clear preponderance (two-thirds or more) of its depot workload. This does not

mean that a program will rely exclusively on that sector.

a“Mixed” means a program plans to place significant workloads in both sectors or indicated such

but did not provide sufficient detail to determine whether one sector will predominate.

bDOD/BMDO programs are centrally managed by DOD or the Ballistic Missile Defense

Organization (BMDO).

As shown above, 33 of the 46 programs that have made firm

source-of-repair decisions, or are strongly leaning toward either the public

or private sector, have selected the private sector for most repairs. If Army

programs are not considered, 31 of 37 Navy, Air Force, DOD, and BMDO

programs have decided or are strongly leaning toward the private sector.

In contrast, the Army data suggests that it plans to support relatively more

programs in its depots. More of the Army programs involve upgrades to

existing systems and officials reported that they generally plan to use

current sources of support. We note, however, that during the periods of

modification, the Army currently plans to have the contractors do much of

the depot maintenance concurrent with the upgrade programs.

Excluding the 13 undecided programs, table 1 also shows that program

managers for more than three-fourths (45 of 58) of new major systems and

upgrades have decided or are leaning toward having the private sector

handle most maintenance or are employing mixed (both private and

public) sources of repair. Relatively few programs —13 of 58— plan to rely

on DOD depots for the bulk of support.

It should be noted that our analysis above represents numbers of new

systems, not the dollar value of their depot workloads. In most cases,

programs did not provide sufficient detail to quantify projected future

Page 7 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

workloads. Quantifying the size of the workloads may produce a different

perspective on DOD’s plans. The distribution of dollar workloads between

the public and private sectors is, of course, crucial to determining future

compliance with the 10 U.S.C. 2466 statute.

Major Decisions Pending The 13 programs that have not yet officially decided on a support strategy

include programs with some of the largest estimated acquisition costs in

DOD’s acquisition programs. These programs include the C-17 transport

aircraft, the F-22 fighter aircraft, F/A-18E/F fighter and attack aircraft, and

the Comanche helicopter. Several program officials told us that they were

delaying final support decisions, in part, because of the uncertain status of

DOD depot and core policies and what they viewed as the potential for

changes to the legislative requirements relating to the workload mix

between the public and private sectors. In the meantime, officials plan to

rely on interim contractor support or similar arrangements.

The C-17 program is an example. Despite several comprehensive studies

over a number of years, Air Force senior managers could not decide upon

a long-term support strategy because of uncertainties about the future

public depot structure, core capability requirements, privatization

initiatives, and the 60/40 provision—which as previously discussed was

changed to 50/50 by the 1998 Defense Authorization Act. In addition, cost

estimates did not identify significant differences between public and

private options; estimates were within 10 percent of each other and both

options were considered viable. As a result, the C-17 program office is

using an interim flexible sustainment strategy and has awarded a contract

making the prime contractor responsible for almost all logistics support

and systems management tasks. Lifetime support decisions will be

deferred until 2003 or later for depot workloads other than the engine.

Officials decided that contractor support for the engine was clearly

cost-effective and would be competed in the private sector. The C-17

engine is a commercial derivative with existing private sector repair

sources.

Depot officials noted, however, that they believe the flexible sustainment

decision on the C-17 is not so flexible and will by necessity lead to

life-cycle support by the prime contractor. On this program, as well as on

past interim contractor support programs we have reviewed, we note that

by not acquiring or budgeting for the technical data and other depot

support resources required to establish an organic depot capability, that

Page 8 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

DOD may in fact be making the decision to leave life-cycle maintenance

support with original equipment manufacturers.

Past Plans Preferred

Organic Performance

The data for the 71 new systems reflect a marked shift from past policies

and practices, which generally preferred the public sector. Officials from

all three services told us that, in the past, public depots were generally the

first option considered. A review of service data from about 10 years ago

showed that most systems were to be supported by DOD depots. Of a total

of 56 major systems with known depot-repair requirements, 75 percent of

Army systems, 76 percent of Air Force systems, and 74 percent of Navy

systems were to be supported mainly in public depots. The remainder

were to be supported by the private sector or a mix of public and private

sources. Figure 1 combines this data from the three services and contrasts

with current plans for new systems as summarized in table 1.

Page 9 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

Figure 1: Comparison of Source-of-Repair Decisions for Major Weapon Systems for Fiscal Years 1987 and 1997

Public Mixed Private Undecided

0

20

40

60

80

100

75

5

16

4

18 17

47

18

1987 1997

Weaknesses in

Guidance Contribute

to Lack of

Consistency and Rigor

in Making

Source-of-Repair

Decisions

Acquisition program managers are primarily responsible for making

source-of-repair decisions on new weapon systems. These decisions not

only drive billions of dollars in life-cycle operating and support costs but

also affect near-term investments for support equipment, repair parts,

training, and technical data (engineering drawings, technical manuals,

etc.) and can vitally impact future force readiness and sustainability. DOD

policies and standard business practices require such important decisions

to be justified through rigorous, comprehensive business case analyses.

DOD guidance and service implementing instructions generally provide that

the analyses should consider factors such as relative costs of public and

private support options, mission essentiality, core depot requirements,

existing public and private capabilities, and customer (operating

command) requirements.

Page 10 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

Our review of programs where source-of-repair decisions have been made

or where one source of support is favored showed that key factors were

not always taken into account during the decision-making process or were

not always consistently applied across programs. We found that cost

analyses comparing public and private support options were not always

done or were done inconsistently and that core capabilities were not often

considered. We also found that programs differed in the extent to which

acquisition officials coordinated with logistics officials (who are

responsible for logistics operations once the systems are fielded) and in

their plans to acquire the technical data needed to compete workloads.

Service officials attributed these problems, in large part, to the current

guidance, which they believe is inadequate, unclear, and sometimes

contradictory. Officials also cited related issues, including the continuing

depot debate, potential changes in legislation, and base closure actions as

contributing to difficulties and inconsistencies in making source-of-repair

decisions.

Inadequate Cost

Comparisons

Service instructions on source-of-repair decisions require that the relative

costs of public and private sector options be assessed. Service regulations

on cost analyses prescribe analytical techniques and requirements for

conducting cost assessments. We found that many programs were not

planning to assess costs and that, for programs that did, cost assessments

varied in comprehensiveness and how they were used to support repair

decisions.

Cost Comparisons Not

Performed

Managers for 23 (40 percent) of the 58 programs that had made or were

leaning toward a source-of-repair decision (public, private, and mixed

workloads from table 1) responded that they did not plan to do a cost

comparison or else did not provide sufficient information for us to

determine the answer. Some officials questioned the need to accomplish

comprehensive studies given DOD’s outsourcing initiatives. Some programs

determined from the outset that they would use one source of support

over another based on other decision factors and, because of that, felt cost

analyses were unnecessary. For example, Army acquisition officials had

already decided that software of the type employed on the Forward Area

Air Defense Command and Control System would be supported in-house.

Conversely, the Navy’s Strategic Sealift program procures commercial

ships that are operated and maintained by the private sector. Public sector

maintenance is not an option and cost comparisons are therefore

inappropriate, according to Navy officials.

Page 11 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

Inconsistent Cost Comparisons Managers for 35 (60 percent) of the 58 programs that had made or were

leaning toward a source-of-repair decision responded that they had or

planned to compare costs between the public depots and the private

sector. In some programs, very in-depth cost studies were performed,

while others were more rudimentary. Some program officials felt it

appropriate to disregard certain costs in their analyses, while others

thought it important to include a wide range of cost factors. Results of

such cost estimates vary widely depending on the assumptions made and

factors considered. For example, cost analysts on the B-1B Conventional

Mission Upgrade Program did several cost estimates, the varying results of

which could be used to justify performing all work in the public sector or,

conversely, nearly all in the private sector, depending on assumptions

about overhead, over and above repairs, equipment reliability rates, and

other factors.

We also noted that cost comparisons often did not indicate a clear

advantage for either sector. In the past, this would usually have resulted in

selecting a public depot to perform maintenance based on core

requirements and the perceived lower risk in using a public depot as a

ready and controlled source of repair. However, our data indicates that

such comparisons are being used in a few recent cases to support

outsourcing decisions and to justify delays in making final determinations

for other new systems. For example, the Navy decided to outsource work

on the T406 engine even though the cost comparison showed outsourcing

to be about 4 percent more expensive than the estimated cost of public

support, about $204 million higher over a 56-year life cycle. The engine is

similar, however, to commercial engines with existing private-sector repair

sources, and the Navy hopes to negotiate a lower repair price after the first

5 years of operation. The C-17 and F-22 programs also conducted

extensive cost studies that did not identify significant cost differences

between public and private sector performance and therefore deferred

selecting sources of repair.

Inconsistent Core

Capability Considerations

Core capabilities are those that the public depot system is required by law

to maintain in order to ensure a ready and controlled source of repair for

mission essential weapon systems. The 10 U.S.C. 2464 statute and DOD

policy require that core depot requirements be identified and the requisite

capabilities maintained in the public depots. The 1998 Defense

Authorization Act amended section 2464 to clarify core depot

requirements and added specific direction that the capability to repair

Page 12 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

mission-essential systems and equipment required in military contingency

plans be identified and maintained in public depots.

Service implementing instructions also require that workloads for new

weapon systems be assessed for core requirements and considered in

making source-of-repair decisions. In January 1996, DOD revised its

methodology for computing core requirements to include an assessment of

private sector capability and the risks of outsourcing mission essential

workloads. Since that time, the Office of the Secretary of Defense (OSD)

and the services have continued to refine the new methodology and to use

it in assessing workloads.

Regarding core considerations, only 13 (22 percent) of the 58 programs

that had finalized decisions or were leaning toward a decision had

assessed or definitely planned to assess core requirements. For the other

45 programs, program managers (1) did not plan to assess core and were

moving ahead without a core determination, (2) were unsure of their

plans, or (3) were uncertain about how or whether to consider core.

Several program officials felt it was the responsibility of higher command

levels to take core considerations into account, and not theirs, and had no

plans to do so. Some officials said they were not sure what the term “core”

meant. Some programs made support decisions without a core

assessment. For example, according to a Navy official, the AIM-9X

Sidewinder Missile program did not initially consider core and did an

“after-the-fact” study to satisfy the requirement.

Where core was considered, it was sometimes not a decisive factor in the

final determination, while in other cases, the fact that a system was

considered core dictated that depot repairs be handled in-house. Some

programs reported receiving mixed messages from logistics officials

regarding whether a system was core, contributing to delays and

confusion in finalizing support plans. Logistics officials project

commandwide core requirements and can assist acquisition officials with

specific core determinations on new systems.

Even for programs planning to consider core, the assessments on new

systems and how they contribute to the total core requirements of the

services may not be completed for some time because the services are

assessing first the workloads for weapon systems currently in the DOD

inventory. For example, the Air Force first began assessing the workloads

for the closing San Antonio and Sacramento Air Logistics Centers. It will

then move on to other existing workloads and lastly assess new systems.

Page 13 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

An Air Force official said it may be late 1998 before existing workloads are

completed. The Army and Navy have not yet determined when they would

complete their work. Navy officials charged with conducting core

assessments said naval offices were struggling with the new methodology

and that core and risk determinations invoked very complex problems.

They expected the process to be long and drawn out and were not sure

when all new systems would be assessed.

Establishing and justifying firm core requirements is a fundamental

prerequisite for determining minimum public depot workloads. Without

these determinations, decisionmakers for new systems are left without

clear direction on whether the work associated with their systems should

in fact be outsourced. However, determinations as to what total core

capabilities should be and, therefore, what work should remain in the

public depots, are still pending. Contributing to the delay and confusion

about core is the still evolving core definition and methods for computing

core requirements. An OSD official said that major changes in DOD

procedures for determining core requirements will probably have to be

made to comply with the new provisions added in the 1998 Authorization

Act.

Inconsistent Consideration

of Logistics Support Issues

DOD acquisition regulations require that logistics support plans and

requirements be identified and well integrated with the development and

production of a new system. Logistics officials are supposed to work

closely with program officials to provide technical input and expertise on

the supportability and maintainability of new systems. Logistics officials

also project commandwide core capability requirements, ensure that

legislative provisions governing workload allocations are complied with,

prescribe and assist on source-of-repair procedures, and can help assess

core requirements for new systems. Logistics officials are also responsible

for managing the DOD depot system and support of fielded weapon

systems.

Weapon system program offices, in making source-of-repair decisions, are

using different approaches in how they coordinate with logistics officials.

There were cases where program officials coordinated well and relied

substantially on the expertise of logistics officials; other cases where

program officials did not consult them at all; and others where the

working relationships were strained and there were disagreements and

dissatisfaction expressed with the degree and quality of interaction. For

example, several Army helicopter programs and the Air Force’s B-1B

Page 14 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

program regularly consulted command logisticians. On the other hand,

Bradley officials did not plan to extensively seek input from logistics

officials at the depot and some C-17 program officials said that logistics

advice was not always forthcoming and that they were still unclear about

the status and results of core determinations made by logisticians.

Because logistics officials have major responsibilities for supporting

systems once they are fielded, they historically have had the primary role

in making, or at least providing substantial input into, source-of-repair

decisions. Several command-level officials we spoke with, however,

believe the logistics community involvement in and influence over these

decisions is much less than in the past. Revised acquisition guidance has

concentrated authority for program decisions within the acquisition chain

of command (specifically, the individual program management team and

the acquisition executive offices) and has given the program manager

more latitude in determining whether and when to involve the logistics

community. Logistics officials expressed concerns that source-of-repair

decisions can be made and, in some cases, have been made without any

real say by those who must deal with the decisions once they are made.

For example, an Army Materiel Command (AMC) official wrote to his

superiors that the acquisition guidance “basically removes AMC from the

depot support equation for new weapon systems” and questioned the

command’s role and future relevance. Believing that the logistics

community needs to be heard in this discussion, he argued that his

command needed to examine the issues on outsourcing, management, and

funding responsibilities; assess their cumulative impacts on depot

operations and where the new policy direction is leading; and establish the

new roles, responsibilities, relationships, and business rules guiding depot

maintenance. Air Force and Navy logistics officials voiced similar

concerns, saying that the current guidance and how policies are

sometimes implemented inhibit and constrain the logistician’s role and

voice in the support planning process.

Technical Data Not Always

Purchased

Technical data generally consists of the engineering drawings, technical

manuals, and other information that provide details on an item’s design

and how it is repaired. DOD policies, outsourcing proponents, and logistics

officials generally agree that government access to this data is important.

Without it, the government is limited in its ability to compete maintenance

work among different contractors. Top DOD officials, as well as the CORM

and DSB studies, say competition is key to achieving the savings envisioned

Page 15 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

by outsourcing. Moreover, lack of data rights limits the government’s

ability to bring the work into public depots if repair prices charged by an

original equipment manufacturer are too high or if a contractor later

decides it does not want to handle the work.

Our review of the programs found that many do not plan to buy the

technical data that could help them avoid sole-sourcing maintenance work

to the contractors that developed the system. Of the 33 programs that plan

to rely on private sector repair capabilities, at least 14 (42 percent) do not

plan to buy the technical data for their weapon systems. Of these 14

programs, 12 (86 percent) intend to use the system’s prime contractor or

the original equipment manufacturers as their sources of repair. Of the

other 19 programs relying on contractor support, 12 plan to buy at least

part of the data and 7 had not yet decided one way or the other.

Our discussions with program officials showed that they had varying

reasons for not buying the data. For example, because of plans to rely on

the prime contractor or the original equipment manufacturers for repairs

of military-unique items, four program officials said they saw no reason to

spend the extra money on technical data. Several others thought the prices

were exorbitant and unaffordable. Five program officials acquiring

commercial off-the-shelf technologies felt that buying the technical data

for these commercial items was unnecessary. On the other hand, six

program managers and most logistics officials we talked to said it was

essential to acquire the data in order to protect the government’s interest

and to control future support costs.

Not buying technical data for new weapon systems may, therefore, result

in higher life-cycle support costs and difficult logistics decisions in the

future. Our prior work shows that much of the depot maintenance

currently contracted to the private sector was awarded sole source

(usually to the prime contractor and/or original equipment manufacturer)

and that the justification for sole source most often cited was that

competition was not possible because DOD did not own the technical data

rights for the items to be repaired. Command officials told us that DOD

would have to make costly investments in order to promote full and open

competition for many of its weapon systems.8 DOD officials also told us

that steadily escalating prices are typical of sole-source arrangements.

8

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

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

Page 16 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

Inadequate, Unclear, and

Contradictory Guidance

DOD Regulation 5000.2-R provides the primary policy guidance on

source-of-repair decisions. Issued in March 1996, it stated that long-term

contractor support is the preferred approach for new and modified

systems. An approved waiver from the acquisition management authority

was required before a public depot could perform the work, justified in

cases where, for example, contractors were unwilling to perform support

or where there was a clear, well-documented cost advantage. The

regulation discussed the need to retain limited core capabilities in public

depots, but it also pointed to life-cycle costs and use of the manufacturer’s

existing production capabilities as key considerations. After congressional

criticism, OSD officials revised DOD 5000.2-R in October 1997 to place more

emphasis on core and remove the requirement for a waiver.

Logistics officials responsible for prescribing source-of-repair guidance

have expressed concern that, despite the October revision, DOD 5000.2-R

does not require a deliberative weighing of factors in making

source-of-repair decisions. In commenting on the regulation in 1996, the

Air Force noted that the regulation assumed contractor support is the

most cost-effective option. The Air Force disagreed with this assumption

and commented that the regulation should require a detailed analysis to

determine the most cost-effective approach. The DOD working group that

reviewed these comments disagreed with the Air Force’s position,

however, saying that the new regulation was consistent with the

Department’s privatization initiatives, CORM recommendations, and DOD

policy on core.

Many program and logistics officials we talked to said they interpreted the

revised guidance and the emphasis on related outsourcing initiatives to

mean that contracting with the prime contractor was the top priority. As a

result, even though the waiver was dropped and core requirements

reemphasized, many officials still thought it would be difficult to get

approval to place work in the public depots. Service logistics officials also

said the regulation did not provide adequate guidance for considering core

capability requirements, contractors’ past performance, compliance with

the then existing 60/40 rule, customer requirements, and cost impacts on

existing workloads in the public depot system.

DOD Directive 4151.18 “Maintenance of Military Materiel,” dated August 12,

1992, and the services’ more detailed implementing instructions require

managers to employ a more deliberative, business case analysis process in

deciding whether to support new weapon systems and subsystems in the

public depots or on contract. This guidance was historically used by

Page 17 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

program managers in making source-of-repair decisions. It required

considering factors such as cost, mission essentiality, core requirements,

existing public and private capabilities, and customer (operating command

units) requirements. While we noted that some past decisions did not

always follow this guidance, it nonetheless established a more

comprehensive analytical approach to making support decisions in

contrast with the original and revised 5000.2-R.

Service officials said there was confusion over how to apply what

appeared to them to be conflicting guidance. They questioned whether

5000.2-R superseded 4151.18 and service instructions; 5000.2-R neither

references that directive nor rescinds it, creating doubts about whether its

requirements are still in force. Service guidance is not always helpful in

clearing up the ambiguity. The services have revisited their existing

guidance to meet the changes contained in 5000.2-R and in the revised

core methodology. The revised Army and Air Force instructions are still in

draft, however, while the Navy has directed program offices to use either

its old guidance, which was rescinded some time ago, or to apply portions

of DOD’s new methodology for determining core requirements. The Air

Force acquisition office instructed programs to use 5000.2-R for direction,

while Air Force Materiel Command—home to program offices and

logistics officials—told them to also use the Command’s draft internal

instructions, which prescribes a decision logic process consistent with DOD

Directive 4151.18.

An OSD policy official said that DOD Directive 4151.18 is still in effect, that

there is ambiguity surrounding the several sets of guidance, and that DOD

has started to address these issues. This official further stated that the

provisions on public depot core capabilities and weapon system support

plans contained in the 1998 Defense Authorization Act require that the

department review and possibly revise policies and processes for making

source-of-repair decisions based on consideration of the revised core

language.

Program officials and cost analysts also said better DOD and service

guidance on how to perform cost analyses is needed. According to these

officials, more explicit instruction on how to do the analyses, the specific

cost factors and weights to use, and the types of assumptions to be made

would help ensure consistency among programs and better justify

source-of-repair decisions. Accordingly, the results from cost analyses can

vary widely depending on the factors considered and assumptions made,

as previously discussed on the B-1B upgrade program.

Page 18 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

In the area of technical data, DOD guidance in 5000.2-R states that

programs are to “provide for long-term access to data required for

competitive sourcing of systems support throughout its life cycle.” Our

discussions with program officials, however, showed that such direction is

less clear-cut when taken together with other DOD guidance on

source-of-repair decisions and acquisition initiatives.

For example, guidance places increased emphasis on keeping costs down,

and it encourages programs to use long-term contractor support. As

previously discussed, some program officials did not plan to spend the

extra money on data since they expected to contract out repairs to the

prime contractors or the original equipment manufacturers. DOD

acquisition policies and initiatives provide managers with more flexibility

in determining what support resources should be acquired and also press

programs to give contractors more configuration control over their

weapon systems, that is, giving them more freedom to change the design

of subsystems and components. According to logistics officials,

continually changing designs can make buying the associated technical

data costly. Program offices may decide that it is easier and cheaper to let

the contractor handle support and forgo buying the data altogether.

Conclusions The policy debate continues between DOD and Congress regarding how to

allocate defense depot maintenance between the public and private

sectors to achieve national security goals. Within this policy debate, the

decision-making process for determining source of repair for new weapon

systems continues. Data from program offices indicates DOD’s new policy

of making greater reliance on contractor capabilities for maintenance is

starting to result in program offices more frequently choosing to rely on

contractor supported maintenance than they did previously.

However, the data also shows that source-of-repair maintenance decisions

regarding several of the largest dollar value acquisition programs are yet to

be made. Consequently, it is uncertain whether the maintenance

workloads for these systems will ultimately be done in the public or

private sector or partially in both sectors. Because these workloads are

relatively large, where they are ultimately done will have a significant

impact on the percentage of maintenance performed in the public and

private sectors. The services will have to manage these decisions within

the 50/50 legislative requirement.

Page 19 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

Lastly, the process for making source-of-repair decisions has changed

several times due to legislation and revisions to relevant DOD regulations

and directives. At the current time, program offices are unclear how

certain DOD regulations and guidance are to be applied in the

source-of-repair decision-making process. Consequently, workload

decision analyses are not being made consistently. Some include detailed

analysis relating to cost and military capability factors, while others do

not. This situation could lead to uneconomical and ineffective

source-of-repair decisions. Provisions in the 1998 Defense Authorization

Act may also require DOD to substantially revise policies and procedures

for determining public depot core capabilities, workload allocations, and

support plans for mission-essential weapon systems.

Recommendations To provide for consistent and comprehensive source-of-repair decisions,

we recommend that the Secretary of Defense direct that action be taken to

clarify the inconsistencies among DOD Regulation 5000.2-R, DOD Directive

4151.18, service implementing instructions, and provisions in the 1998

Defense Authorization Act. In taking this action, at a minimum, the

approach for analyzing core, cost, readiness, and sustainability factors for

making source-of-repair decisions should be clearly defined. We also

recommend that the Secretary of Defense direct that the service

secretaries assess the adequacy of the analyses supporting

source-of-repair decisions made over the last 2 years. These reviews

should be done based on the previously recommended clarifications to the

decision-making approach. Where weaknesses in the analysis are

identified, new analyses should be done and adjustments made to the

source-of-repair decisions where appropriate and feasible.

Agency Comments DOD officials commented on a draft of this report. They concurred with the

report and with our first recommendation to clarify inconsistencies in

guidance. DOD concurred, in part, with our second recommendation that

the service secretaries assess the adequacy of the analyses supporting

source-of-repair decisions made over the last 2 years and, where

weaknesses are identified, make new analyses as appropriate and feasible.

DOD stated that the services draw their guidance for these reviews from

existing DOD policy and that the service secretaries will determine whether

previous decisions must be revisited when there are changes in guidance.

They further stated that the services continually assess weapon system

programs and make changes in depot repair decisions to improve

affordability and to maintain depot capability and efficiency.

Page 20 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

We acknowledge that acquisition programs are periodically reviewed by

top management and that source-of-repair decisions may be reassessed

and changed during an individual system’s life cycle. DOD’s required

management reviews and subsequent reassessments of logistics support

decisions made as a result of new legislation and internal policy changes

would meet, in part, the objectives of our recommendation. However, our

review of 71 new programs found so much confusion about guidance and

widely disparate approaches to decision-making that we believe analyses

of recent decisions are warranted. Analyses of individual programs could

be accomplished concurrently and as an integral part of DOD’s standard

acquisition program management reviews. If weaknesses are identified

and reassessments required, the life-cycle savings resulting from good

support decisions should more than pay for the additional up-front costs

of the new analyses.

Appendix I describes our objectives, scope, and methodology. Appendix II

lists the systems we surveyed. Agency comments are contained in

appendix III. We made several technical corrections to address their

comments and suggestions.

We are sending copies of this report to the Secretaries of Defense, the

Army, the Navy, and the Air Force and to interested congressional

committees. Copies will be made available to others upon request.

Please contact me at (202) 512-8412 if you or your staff have any questions

concerning this report. Major contributors to this report are listed in

appendix IV.

David R. Warren, Director

Defense Management Issues

Page 21 GAO/NSIAD-98-8 Defense Depot Maintenance
B-279271 

List of Congressional Requesters

The Honorable James M. Inhofe

Chairman

The Honorable Charles S. Robb

Ranking Minority Member

Subcommittee on Readiness

Committee on Armed Services

United States Senate

The Honorable Neil Abercrombie

The Honorable Saxby Chambliss

The Honorable Tillie K. Fowler

The Honorable James V. Hansen

The Honorable John N. Hostettler

The Honorable Ernest J. Istook

The Honorable Walter B. Jones, Jr.

The Honorable Solomon P. Ortiz

The Honorable Norman Sisisky

The Honorable J. C. Watts, Jr.

House of Representatives

Page 22 GAO/NSIAD-98-8 Defense Depot Maintenance
Page 23 GAO/NSIAD-98-8 Defense Depot Maintenance
Contents

Letter 1

Appendixes Appendix I: Objectives, Scope, and Methodology 26

Appendix II: Major New Acquisition Programs Surveyed 29

Appendix III: Comments From the Department of Defense 33

Appendix IV: Major Contributors to This Report 35

Related GAO Products 38

Table Table 1: Reported Major Systems Source of Repair Decisions 7

Figure Figure 1: Comparison of Source-of-Repair Decisions for Major

Weapon Systems for Fiscal Years 1987 and 1997

10

Abbreviations

AMC Army Materiel Command

BMDO Ballistic Missile Defense Organization

CORM Commission on Roles and Missions

DOD Department of Defense

DSB Defense Science Board

OSD Office of the Secretary of Defense

Page 24 GAO/NSIAD-98-8 Defense Depot Maintenance
Page 25 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix I 

Objectives, Scope, and Methodology

The Chairman and Ranking Minority Member of the Senate Armed

Services Readiness Subcommittee asked us to review the Department of

Defense’s (DOD) current policy on depot maintenance for new weapon

systems. Subsequent to that request, members on the House National

Security Committee and other House members asked us to evaluate the

effects on cost, depot responsiveness, and readiness from DOD’s decision

to outsource maintenance on new systems. For this report, we addressed

(1) DOD’s policy and implementation plans for allocating depot-repair

workloads for new and upgraded weapon systems between the public and

private sectors and (2) the decision-making process it used to make

source-of-repair decisions.

To perform our review, we visited or obtained information from

• the Office of the Secretary of Defense; the Joint Staff; and Army, Navy, and

Air Force headquarters, all in the Washington, D.C., area;

• Air Force Materiel Command headquarters at Wright-Patterson Air Force

Base, Ohio, and its subordinate depot operations at Oklahoma City Air

Logistics Center, Tinker Air Force Base, Oklahoma, and Warner Robins Air

Logistics Center, Robins Air Force Base, Georgia;

• Army Materiel Command headquarters in Alexandria, Virginia, and its two

subordinate commands, Aviation and Troop Command, St. Louis,

Missouri, and Tank-Automotive and Armaments Command, Warren,

Michigan;

• Naval Air Systems Command in Arlington, Virginia, and its subordinate

depot operations at Jacksonville Naval Aviation Depot, Jacksonville,

Florida;

• Naval Sea Systems Command, Arlington, Virginia;

• the Joint Depot Maintenance Analysis Group, Wright-Patterson Air Force

Base, Ohio; and

• major DOD system acquisition offices (see app. II).

To determine current depot support plans and the allocation of workload

between the public and private sectors, we sent structured interviews to

88 new acquisition and major upgrade programs (see app. II). Eighty-four

of these programs were taken from DOD’s October 28, 1996, list of major

defense acquisition programs and are generally the largest acquisition

programs within DOD. At the suggestion of DOD officials, we also sent

interviews to four other programs classified as “pre-major” programs

(efforts that may eventually become major defense acquisitions). We

asked the programs to respond to a series of questions on the decisions

made, the process used to arrive at those decisions, the factors

Page 26 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix I 

Objectives, Scope, and Methodology

considered, and other support-related issues. Eighty programs responded,

for a 91-percent response rate. We do not believe that data from the

nonresponding programs would materially affect the results of our

analysis. Six of the eight programs that did not respond were among the

smaller programs in terms of total acquisition cost. Two of the eight—the

LPD-17 assault ship and the Theater High Altitude Defense System—were

among the higher cost programs but not in the top 10.

The programs’ responses were supplemented by follow-up phone calls or

in-person visits with more than half of these programs. We used this

information to determine and quantify depot support plans for these

systems. We did not independently verify all the information contained in

the programs’ responses but did spot checks of portions of the information

against other records.

We also obtained and summarized information on support plans and

workload allocations from acquisition programs in 1987. Our purpose was

to provide an historical perspective from which to compare and contrast

current source of support plans and results with prior programs.

To evaluate the policies, factors considered, and decision-making

processes used to decide whether to support new systems in the public or

private sectors, we used information from the structured interviews and

also visited 20 programs to gain more in-depth perspectives on how

decisions were justified and to understand other issues that affect logistics

support plans. The programs we visited are highlighted in appendix II. We

studied numerous documents, including DOD regulatory guidance and

other direction, comparing and contrasting past and present guidance at

both the DOD and service level. Wherever possible, we supplemented this

information from other GAO work in depot maintenance management,

weapon system acquisition, and defense privatization.

We also spoke with officials from the Office of Secretary of Defense, the

Joint Staff, service headquarters, and service acquisition and logistics

commands. We obtained policy and programmatic materials to ascertain

DOD’s strategic direction and future expectations about the public depots,

top-level outsourcing initiatives, and responses to congressional criticism.

We wanted to better understand the culture and operating environment

that impacts policy implementation and the management of individual

programs as well as the entire depot maintenance system.

Page 27 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix I 

Objectives, Scope, and Methodology

We conducted this review of depot support plans for new weapon systems

from October 1996 to November 1997 in accordance with generally

accepted government auditing standards.

Page 28 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix II 

Major New Acquisition Programs Surveyed

Below is the list of programs that were included in our survey.1 The

programs with asterisks are those we visited to obtain more in-depth

information above and beyond the data provided through the

questionnaire survey.

Army • ATACMS-BAT—Army Tactical Missile System-Brilliant Anti-Armor

Submunitions

• Comanche (RAH-66)—Light Helicopter*

• Crusader (AFAS/FARV)—Advanced Field Artillery System/Future

Armored Resupply Vehicle

• FOTT—Follow-on to TOW

• Javelin—Advanced Anti-Tank Weapon System - Medium

• JSTARS GSM—Joint Surveillance and Target Attack Radar System Ground

Station Module*

• MCS (ATCCS)—Maneuver Control System (Army Tactical Command and

Control System)

• M1A2 Abrams Upgrade—Abrams Tank Upgrade*

• AFATDS (ATCCS)—Advanced Field Artillery Tactical Data System (Army

Tactical Command and Control System)

• ASAS (ATCCS)—All Source Analysis System (Army Tactical Command

and Control System)

• ATACMS-APAM—Army Tactical Missile System/Anti-Personnel

Anti-Materiel Blocks I/IA

• Black Hawk (UH-60L)—Utility Helicopter*

• Bradley FVS Upgrade—Bradley Fighting Vehicle System Upgrade*

• CSSCS (ATCCS)—Combat Service Support Control System (Army Tactical

Command and Control System)

• FAAD C2I (ATCCS)—Forward Area Air Defense Command, Control and

Intelligence (Army Tactical Command and Control System)

• FMTV—Family of Medium Tactical Vehicles

• Kiowa Warrior (OH-58D)—Armed OH-58D*

• Longbow Apache—Radar-Based Target Acquisition and Fire Control

System, including airframe modifications on the Apache helicopter*

• Longbow Hellfire—Hellfire Missile System compatible with the Longbow

Fire Control Radar

• SADARM—Sense and Destroy Armor

• SINCGARS—Single-Channel Ground and Airborne Radio System-VHF*

• SMART-T—Secure Mobile Anti-Jam Reliable Tactical - Terminal

1

There were two additional programs that we examined more closely in person but were not included

in our survey. They are the Air Force’s AC-130U Gunship and the Army’s Paladin programs.

Page 29 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix II 

Major New Acquisition Programs Surveyed

Navy • AAAV—Advanced Amphibious Assault Vehicle

• AIM-9X—Air-to-Air Missile Upgrade*

• F/A-18E/F—Hornet Naval Strike Fighter*

• JSOW—Joint Stand-Off Weapon

• LPD 17—Amphibious Assault Ship

• MIDS-LVT—Multi-Functional Information Distribution System-Low

Volume Terminal

• NSSN—New Attack Submarine

• USMC H-1 Upgrades (4BW/4BN)—United States Marine Corps Midlife

Upgrade to AH-1W Attack Helicopter and UH-1N Utility Helicopter

(originally COBRA VENOM)

• V-22—Osprey Joint Advanced Vertical Aircraft*

• AN/SQQ-89—Surface Ship Antisubmarine Warfare System

• AOE 6—Fast Combat Support Ship

• AV-8B Remanufacture—Short Takeoff and Landing (V/STOL) Close Air

Support Aircraft

• CEC—Cooperative Engagement Capability

• CVN 68—Nimitz Class Nuclear Powered Aircraft Carriers

• DDG 51—Guided Missile Destroyer, including basic ship and all variants

• E-2C Reproduction—Hawkeye Carrier-Based Early Warning Aircraft

• LHD 1—Amphibious Assault Ship

• MHC 51—Coastal Mine Hunter

• NESP—Navy Extremely High Frequency Satellite Communications

Program

• SH-60R (LAMPS MK III Block II)—Multi-Mission Helicopter Upgrade

• SM 2 (Blocks I/II/III/IV)—Standard Surface-to-Air Missile

• SSN 21/AN/BSY-2—Seawolf Class Nuclear Attack Submarine/Combat

System*

• Strategic Sealift—Naval Transport Ship

• T-45TS—Undergraduate Jet Pilot Training System

• Tomahawk—Sea Launched Cruise Missile

• Trident II Missile—Sea Launched Ballistic Missile

• UHF Follow-on—Ultra High Frequency Follow-on Communications

Satellite

Air Force • ABL—Airborne Laser

• B-1 CMUP-DSUP—Lancer Penetrating Bomber Conventional Mission

Upgrade —Defensive Systems Upgrade (formerly ECM upgrade)*

• EELV—Evolved Expendable Launch Vehicle

• F-22—Advanced Tactical Fighter*

Page 30 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix II 

Major New Acquisition Programs Surveyed

• JASSM— Joint Air-to-Surface Standoff Missile (TSSAM replacement)

Vehicle

• JDAM—Joint Direct Attack Munitions

• JTIDS—Joint Tactical Information Distribution System

• MILSTAR—Satellite and User Equipment

• SBIRS—Space-Based Infrared System Program, efforts include SBIRS

(high) and SBIRS (low) (formerly known as Space Missile Tracking

System)

• Titan IV—Space Booster

• AMRAAM—Advanced Medium Range Air-to-Air Missile

• AWACS RSIP (E-3)—Airborne Warning and Control System Radar

Systems Improvement Program

• B-1 CMUP-Computer Upgrade—Lancer Penetrating Bomber Conventional

Mission Upgrade - Computer Upgrade*

• B-1 CMUP JDAM—Lancer Penetrating Bomber Conventional Mission

Upgrade/Joint Direct Attack Munitions*

• B-2—Stealth Bomber*

• C-17A—Globemaster III Advanced Cargo Aircraft*

• C-130J—Cargo Plane

• CIGS (JSIPS)—Common Imagery Ground/Surface; Joint Services Imagery

Processing System

• CMU—Cheyenne Mountain Upgrade

• DMSP—Defense Meteorological Satellite Program

• DSP—Defense Support Program Satellite System

• JPATS—Joint Primary Aircraft Training System

• JSTARS—Joint Surveillance and Target Attack Radar System (Aircraft)

• Minuteman III GRP—Guidance Replacement Program

• Minuteman III PRP—Propulsion Replacement Program

• NAS—National Airspace Traffic Control System

• NAVSTAR GPS—Global Positioning System (includes satellites and user

equipment)

• SFW—Sensor Fused Weapon

DOD Defense

Acquisition Board

• Chemical Demilitarization—Chemical Demilitarization Program,

consisting of both the stockpile and non-stockpile programs

• JSF—Joint Strike Fighter

• NPOESS—National Polar-Orbiting Operational Environmental Satellite

System

Page 31 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix II 

Major New Acquisition Programs Surveyed

Ballistic Missile

Defense Organization

• Patriot PAC3—Patriot Advanced Capability

• Navy Area TBMD—Navy Area Theater Ballistic Missile Defense

• NMD—National Missile Defense

• THAAD—Theater High Altitude Area Defense

Pre-Major Defense

Acquisition

Programs—

Unmanned Aerial

Vehicles

• Outrider

• DarkStar

• Global Hawk

• Predator

Page 32 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix III 

Comments From the Department of Defense

Page 33 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix III 

Comments From the Department of Defense

Now on p. 20.

Now on p. 20.

Page 34 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix IV 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

James Wiggins, Associate Director

Julia Denman, Assistant Director

Glenn Knoepfle, Senior Evaluator

Jacqueline Snead, Senior Evaluator

Edward Waytel, Senior Evaluator

Paul Newton, Evaluator

Office of General

Counsel, Washington,

D.C.

John Brosnan, Assistant General Counsel

Chicago/Dayton

Office

Bruce Fairbairn, Evaluator-in-Charge

Jeanne Willke, Senior Evaluator

Page 35 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix IV 

Major Contributors to This Report

Page 36 GAO/NSIAD-98-8 Defense Depot Maintenance
Appendix IV 

Major Contributors to This Report

Page 37 GAO/NSIAD-98-8 Defense Depot Maintenance
Related GAO Products

Depot Maintenance: Lessons Learned From Transferring Armeda Naval

Aviation Depot Engine Workloads (GAO/NSIAD-98-10BR, Mar. 25, 1998).

Public-Private Competitions: DOD’s Determination to Combine Depot

Workloads Is Not Adequately Supported (GAO/NSIAD-98-76, Jan. 20, 1998).

Public-Private Sector Competition: Processes Used for C-5 Aircraft Award

Appear Reasonable (GAO/NSIAD-98-72, Jan. 20, 1998).

DOD Depot Maintenance: Information on Public and Private Sector

Workload Allocations (GAO/NSIAD-98-41, Jan. 20, 1998).

Air Force Privatization-in-Place: Analysis of Aircraft and Missile System

Depot Repair Costs (GAO/NSIAD-98-35, Dec. 22, 1997).

Outsourcing DOD Logistics: Savings Achievable but Defense Science

Board’s Projections Are Overstated (GAO/NSIAD-98-48, Dec. 8, 1997).

Air Force Depot Maintenance: Information on the Cost-Effectiveness of

B-1B and B-52 Support Options (GAO/NSIAD-97-210BR, Sept. 12, 1997).

Navy Depot Maintenance: Privatizing the Louisville Operations in Place Is

Not Cost-Effective (GAO/NSIAD-97-52, July 31, 1997).

Defense Depot Maintenance: Challenges Facing DOD in Managing Working

Capital Funds (GAO/T-NSIAD/AIMD-97-152, May 7, 1997).

Depot Maintenance: Uncertainties and Challenges DOD Faces in

Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-111, Mar. 18,

1997) and (GAO/T/NSIAD-112, Apr. 10, 1997).

Defense Outsourcing: Challenges Facing DOD as It Attempts to Save

Billions in Infrastructure Costs (GAO/T-NSIAD-97-110, Mar. 12, 1997).

Navy Ordnance: Analysis of Business Area Price Increases and Financial

Losses (GAO/AIMD/NSIAD-97-74, Mar. 14, 1997).

High Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997).

Air Force Depot Maintenance: Privatization-in-Place Plans Are Costly

While Excess Capacity Exists (GAO/NSIAD-97-13, Dec. 31, 1996).

Page 38 GAO/NSIAD-98-8 Defense Depot Maintenance
Related GAO Products

Army Depot Maintenance: Privatization Without Further Downsizing

Increases Costly Excess Capacity (GAO/NSIAD-96-201, Sept. 18, 1996).

Navy Depot Maintenance: Cost and Savings Issues Related to

Privatizing-in-Place the Louisville, Kentucky, Depot (GAO/NSIAD-96-202, 

Sept. 18, 1996).

Defense Depot Maintenance: Commission on Roles and Mission’s

Privatization Assumptions Are Questionable (GAO/NSIAD-96-161, 

July 15, 1996).

Defense Depot Maintenance: DOD’s Policy Report Leaves Future Role of

Depot System Uncertain (GAO/NSIAD-96-165, May 21, 1996).

Defense Depot Maintenance: More Comprehensive and Consistent

Workload Data Needed for Decisionmakers (GAO/NSIAD-96-166, May 21, 1996).

Defense Depot Maintenance: Privatization and the Debate Over the

Public-Private Mix (GAO/T-NSIAD-96-146, Apr. 16, 1996) and (GAO/T-NSIAD-96-148,

Apr. 17, 1996).

Military Bases: Closure and Realignment Savings Are Significant, but Not

Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).

Depot Maintenance: Opportunities to Privatize Repair of Military Engines

(GAO/NSIAD-96-33, Mar. 5, 1996).

Closing Maintenance Depots: Savings, Personnel, and Workload

Redistribution Issues (GAO/NSIAD-96-29, Mar. 4, 1996).

Navy Maintenance: Assessment of the Public-Private Competition Program

for Aviation Maintenance (GAO/NSIAD-96-30, Jan. 22, 1996).

Depot Maintenance: The Navy’s Decision to Stop F/A-18 Repairs at Ogden

Air Logistics Center (GAO/NSIAD-96-31, Dec. 15, 1995).

Military Bases: Case Studies on Selected Bases Closed in 1988 and 1991

(GAO/NSIAD-95-139, Aug. 15, 1995).

Military Base Closure: Analysis of DOD’s Process and Recommendations

for 1995 (GAO/T-NSIAD-95-132, Apr. 17, 1995).

Page 39 GAO/NSIAD-98-8 Defense Depot Maintenance
Related GAO Products

Military Bases: Analysis of DOD’s 1995 Process and Recommendations for

Closure and Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).

Aerospace Guidance and Metrology Center: Cost Growth and Other

Factors Affect Closure and Privatization (GAO/NSIAD-95-60, Dec. 9, 1994).

Navy Maintenance: Assessment of the Public and Private Shipyard

Competition Program (GAO/NSIAD-94-184, May 25, 1994).

Depot Maintenance: Issues in Allocating Workload Between the Public and

Private Sectors (GAO/T-NSIAD-94-161, Apr. 12, 1994).

Depot Maintenance (GAO/NSIAD-93-292R, Sept. 30, 1993).

Depot Maintenance: Issues in Management and Restructuring to Support a

Downsized Military (GAO/T-NSIAD-93-13, May 6, 1993).

Air Logistics Center Indicators (GAO/NSIAD-93-146R, Feb. 25, 1993).

Defense Force Management: Challenges Facing DOD as It Continues to

Downsize Its Civilian Workforce (GAO/NSIAD-93-123, Feb. 12, 1993).

(709199, 709240) Page 40 GAO/NSIAD-98-8 Defense Depot Maintenance
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100