GAO

United States General Accounting Office

Report to the Chairman and Ranking 

Minority Member, Committee on Armed 

Services, House of Representatives

October 1999 DEPOT 

MAINTENANCE

Army Report Provides 

Incomplete 

Assessment of 

Depot-type 

Capabilities

GAO/NSIAD-00-20

Page 1 GAO/NSIAD-00-20 Depot Maintenance

Contents

Letter 3

Appendixes Appendix I: Repair Parts Obtained at Local Levels Bypassing 

Normal Supply Process 30

Appendix II: Potential Providers of Depot Maintenance-Type 

Services Maintenance Program Within the Continental United 

States 35

Appendix III: Local Maintenance Facilities and Depots Visited 

by GAO 39

Appendix IV: Comments From the Department of Defense 40

Appendix V: GAO Contacts and Staff Acknowledgments 42

Related GAO Products 43

Table Table 1: Historical Workload Data for the Repair and Overhaul of

Various Military Engines at Three Army Depots 31

Figure Figure 1: Location of the Army’s Maintenance Facilities Within the 

Continental United States 9

Abbreviations

AMC Army Materiel Command

BRAC Base Realignment and Closure

DOD Department of Defense

SRA Special Repair Authority
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United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-283179 Leter

October 15, 1999 

The Honorable Floyd Spence

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on Armed Services

House of Representatives

Under 10 U.S.C. 2460, depot maintenance and repair involves the overhaul, 

upgrade, and rebuilding of military systems, subsystems, parts, and 

assemblies. In recent years, some depot maintenance workloads have 

become fragmented—that is, some depot maintenance workloads have 

shifted to non-depot facilities—leading to uncertainty about the magnitude 

of depot maintenance-type capabilities, workforce requirements, and the 

distribution of work to public and private sector facilities. 

In response to direction from your Committee, the Army submitted a report 

on April 14, 1999, on its study of the proliferation of depot

maintenance-type activities at non-depot facilities.1

 You also required that 

we report on the completeness and adequacy of the Army’s report along 

with any other relevant information.2

 Specifically, this report determines 

the extent to which the Army’s report (1) identifies the total amount of 

depot maintenance-type work conducted at local maintenance facilities 

and the cost efficiency of such work in view of the Army’s overall 

requirements and (2) addresses plans for consolidating fragmented 

maintenance operations. Additionally, this report highlights continuing 

challenges the Army faces in its efforts to resolve proliferation issues. 

1

 In this report we refer to depot maintenance-type activities as work performed by local 

maintenance and repair facilities that meets the definition for depot maintenance in

10 U.S.C 2460.

2

 The Committee (report number 105-532) also required that we evaluate the completeness 

and adequacy of the Army’s report on the Army’s Workload and Performance System, an 

automated system for identifying workforce requirements. We plan to issue a separate 

report addressing implementation of this system. 
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Results in Brief The Army’s report did not sufficiently identify the extent of depot 

maintenance-type work performed at non-depot facilities. The Army 

reported that 40 staff years of depot maintenance-type work was 

performed outside of the formal depot system by non-depot maintenance 

providers operating under special repair authorities. However, other 

sources of information indicate that additional amounts of depot 

maintenance-type work and capabilities exist at various non-depot 

facilities. Further, the Army was unable to develop accurate and consistent 

estimates of its depot maintenance-type work because its reporting criteria 

are not consistent with the definition in 10 U.S.C. 2460, and management 

information systems and procedures are not equipped to assess the 

magnitude and cost-effectiveness of all maintenance and supply functions. 

Citing inadequate data on the subject, the Army’s report did not make any 

recommendations for consolidating depot maintenance-type facilities to 

the public depots. Nonetheless, the report did outline a number of ongoing 

initiatives, and it recommended other actions to improve the management 

of information on facilities performing depot maintenance-type tasks. 

These actions should provide some of the data and management 

improvements needed to support future consolidation recommendations. 

Although not specifically addressed in the Army’s report, the Army has 

developed a draft strategic plan for its depot maintenance facilities. 

However, key details for implementing many of the planned actions remain 

to be developed, including plans to assess the current capabilities of and 

future requirements for the Army’s maintenance support structure. 

We identified a number of continuing challenges the Army faces in 

attempting to address the fragmentation of depot maintenance work and 

the proliferation of depot maintenance-type facilities. Key among them is 

the amount of depot maintenance-type capabilities controlled by major 

commands in the active Army and the Army National Guard. For various 

reasons, these commands are reluctant to reduce their present capability 

for performing depot maintenance-type workloads. Eliminating the 

fragmentation, duplication, and excess capacities within the Army’s 

maintenance infrastructure—while implementing solutions that are best 

from a warfighting perspective and most cost-effective to the Army as a 

whole—represents a formidable challenge for Army leadership. 

This report makes recommendations to the Secretary of Defense intended 

to strengthen the Army’s abilities to address the fragmentation of depot 
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maintenance work and the proliferation of depot maintenance-type 

facilities.

Background The Army assigns maintenance and repair work to four different levels.3

From the least to the most intensive, they are unit level, direct support, 

general support, and depot level. 

Unit and direct support workload categories are assigned to deployable 

military units located at various field locations. Maintenance at these two 

levels generally focuses on day-to-day and routine recurring maintenance, 

but it is not expected to go beyond the removal and replacement of 

components.

General support maintenance is conducted by military personnel, 

government civilians, or contractor employees, usually at fixed

(non-mobile) industrial-type facilities located on Army posts, camps, and 

stations.4

 Maintenance at this level involves the repairing and overhauling 

of parts and assemblies and some end items, such as trucks. General 

support maintenance units are under the command and control of major 

operating commands; as with lower-level maintenance facilities, these units 

are supported by direct appropriations for operations and maintenance.5

Depot-level support is the most intensive level of maintenance and repair; 

as noted, it involves overhauling, upgrading, and rebuilding of military 

systems, subsystems, parts, and assemblies. When compared to general 

support maintenance, depot-level maintenance work generally involves the 

use of higher skilled technicians and more sophisticated test and plant 

equipment. Depot-level maintenance has traditionally been performed by 

government civilians working at government-owned industrial facilities 

under the command and control of the Army Materiel Command (AMC) or 

by contractor personnel working in contractor-owned and -operated 

3

 However, the maintenance structure for Army aircraft and components is comprised of 

three levels—unit, intermediate, and depot.

4

 Military personnel operate general support units that are deployable for theater operations.

5

 Such funding is used to pay for most costs associated with establishing and operating 

maintenance facilities at this level. One key exception is the cost of military personnel that 

may be involved in such work. The cost of military personnel are accounted for in a 

separate, centrally managed, Military Personnel appropriations account.
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facilities performing work specified by AMC-managed maintenance 

contracts. The Army’s five government-operated maintenance depots are 

managed within the Army Working Capital Fund. Contract depot 

maintenance work is not managed under the working capital fund.

Army maintenance facilities obtain repair parts through a two-tiered, 

wholesale and retail logistics support system. Despite long-standing efforts 

to merge the wholesale and retail supply systems, each system continues to 

operate independently. Under the current system, Army retail supply 

managers may arrange for unserviceable repair parts to be repaired by 

local maintenance facilities or they may order replacement parts from the 

wholesale system. 

Responsibility for the Army’s wholesale system is assigned to four major 

commands subordinate to the Army Materiel Command. The subordinate 

commands manage repairable item inventories, arranging for the repairs of 

unserviceable items returned to the supply system and for the procurement 

of new items directly from vendors.6

 In addition, the Defense Logistics 

Agency arranges for the procurement and distribution of various supplies 

used in the maintenance process.7

Responsibility for the Army’s retail supply system is assigned to

field-operating commands. Retail supply activities may draw repair parts 

from wholesale inventories that are held in government warehouses to 

meet the demands of retail customers or arrange for the repair of items 

through local maintenance facilities. Since April 1992, Army wholesale 

inventory managers have been charging retail customers, such as combat 

units and retail supply support activities, for repairable items that they 

previously provided at no cost. This change was implemented as a costreduction effort to encourage retail customers to order no more than they 

needed and to fully diagnose equipment malfunctions and repair items 

within their capability. 

6

 The four subordinate commands are the Tank-Automotive and Armaments Command, the 

Communications-Electronics Command, the Soldier Biological and Chemical Command, 

and the Aviation and Missile Command. 

7

 In some instances, the Army may rely on prime vendors for repair items. Prime vendors are 

contractors that buy inventory from a variety of suppliers, store it in commercial 

warehouses, and ship it to customers when ordered. 
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Depot Maintenance 

Workloads Declining and 

Fragmented 

In recent years the amount of work assigned to the Army’s major industrial 

maintenance depots has declined significantly.8 Work at the major 

maintenance depots has declined for a number of reasons, including 

reduced force structure, increased emphasis on outsourcing, and DOD and 

Army policies that advocate placing maintenance and repair workloads at 

the lowest level maintenance facility with capability to perform the task. In 

addition, as we have previously reported, operating units sometimes 

believe they can obtain repairs at less cost at non-depot facilities that do 

not operate under the working capital fund and that are not required to 

recoup from customers the full costs of providing goods and services.9

Likewise, we have reported that in recent years the Army’s Forces 

Command and Training and Doctrine Command have operated an 

increasing number of regional repair facilities at active Army installations 

that siphon depot maintenance-type workloads from regular depot 

facilities. The Army National Guard also operates regional repair facilities 

at state-owned National Guard sites. Categorized as integrated sustainment 

maintenance (ISM) facilities, they repair Army equipment above the direct 

support level, including general support and depot-level support tasks. 

Current Army policy allows some ISM sites to perform depot-level tasks 

under a Special Repair Authority (SRA).10 While some Army officials told us 

the ISM program involves only a small amount of depot maintenance-type 

work based on their understanding of the Army’s 4-level maintenance 

process, other sources told us the amount of depot maintenance-type work 

would be substantial, given the depot maintenance definition enacted in 

1997, and codified at 10 U.S.C. 2460. 

Despite declining workloads, the Army’s maintenance organizations 

employ a large number of skilled personnel, some of which are 

8

 As a result of these declining workloads, the number of operating maintenance depots 

decreased from 10 to 5 between 1976 and 1995. Even so, Army officials have recognized that 

they continue to retain excess capacity in their depot system and that factor, along with 

continuing reductions in programmed maintenance work, results in higher operating costs. 

The Army has previously proposed reducing the number of government-owned and

-operated maintenance depots from five to three, but actions of the 1995 Base Realignment 

and Closure (BRAC) Commission resulted in five depots being retained.

9 Army Industrial Facilities: Workforce Requirements And Related Issues Affecting Depots 

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

10 Special repair authorities are approved after AMC determines that the repair sites have 

adequate facilities, equipment, and sufficient trained personnel to accomplish the tasks. 

Overall cost-effectiveness to the Army is not evaluated.
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underutilized. As we previously reported, at the end of fiscal year 1998 the 

Army’s five depots reportedly employed about 11,200 persons that were 

involved in depot maintenance-type work utilizing about 68 percent of 

available production capacity. While detailed information is not currently 

available to document the capabilities, capacity utilization, and size of the 

Army’s network of potential local maintenance providers, Army records 

show that in fiscal year 1998 about 9,800 persons were employed at

133 different local maintenance facilities worldwide. About 46 percent of 

the local maintenance personnel are employed by the National Guard,

22 percent by the Forces Command, 12 percent by the Training and 

Doctrine Command, 19 percent by the European Command, and 1 percent 

by the Army Reserve. In fiscal year 1998, the Army reportedly spent about 

$1.7 billion on depot-level maintenance work, of which $941 million, or 

about 54 percent, was provided to government-operated facilities and

$788 million, or about 46 percent, to contractor-operated facilities.

Figure 1 shows the location of the Army’s five working capital funded 

maintenance depots and the locations of the Army’s direct appropriation 

funded local maintenance facilities within the continental United States.
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Figure 1: Location of the Army’s Maintenance Facilities Within the Continental United States

Note: In addition to the sites shown above, the Army National Guard operates one or more sites in 

each state. See appendix II for a complete list.
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Concerns About Identifying 

All Depot-Level Work and 

Determining Work Force 

Requirements 

With changes in sources of repair and what appeared to be movement of 

some depot-level work to below-depot level facilities in recent years, 

questions have arisen concerning the definition of depot-level work and the 

allocations of depot maintenance workloads between the public and 

private sector facilities. The Congress enacted legislation specifying the 

characteristics of depot maintenance workloads, and requiring annual 

reports on workload allocations between the public and private sectors.11

As we have previously pointed out, under the statutory definition, depot 

maintenance work was not limited to a specific level or category of repair 

activity.12 Therefore, depot maintenance-type work performed at non-depot 

facilities that meets the definition contained in 10 U.S.C. 2460 should be 

included as part of the Army’s assessment of its maintenance programs and 

activities. 

The House National Security Committee, in its report accompanying the 

Defense Authorization Act for Fiscal Year 1999 (report number 105-532), 

voiced concern over the Army’s active and reserve component installations 

developing depot-like capabilities without assessing the impact on the 

Army’s overall maintenance infrastructure. Further, the Committee 

questioned the process the Army used to determine workforce 

requirements for depot facilities. 

11 Section 2460 of title 10 as amended by the Strom Thurmond National Defense 

Authorization Act for Fiscal Year 1999, provides that depot maintenance workloads include 

maintenance and repair requiring the overhaul, upgrade, or rebuilding of parts, assemblies, 

or subassemblies and the testing and reclamation of equipment as necessary, regardless of 

the source of funds or the location where work is performed. DOD is required by 10 U.S.C. 

2466 to prepare an annual report of public and private sector workload allocations. 

12 Defense Depot Maintenance: Public and Private Sector Workload Distribution Reporting 

Can Be Further Improved (GAO/NSIAD-98-175, July 23, 1998).
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Depot Work Performed 

by Local Maintenance 

Facilities Is 

Understated, and 

Financial Impact Is 

Uncertain

In April 1999, the Army reported that in fiscal year 1998 local maintenance 

facilities, operating under special repair authorities, completed 40

staff-years of depot maintenance-type work at a reported cost of $17.6 

million. The Army’s report acknowledged that its report did not take into 

consideration the most current definition of depot maintenance work 

contained in 10 U.S.C. 2460, and it recognized significant limitations in 

systems and procedures to fully quantify and assess the cost efficiency of 

depot maintenance-type work being done outside the formal depot system. 

A separate DOD report sent to the Congress on February 5, 1999,13 as well 

as our own assessment of other depot maintenance-type workloads being 

conducted by local maintenance providers, indicates that the amount of the 

Army’s depot-level work being performed at non-depot facilities is much 

greater than the Army’s April report indicates. 

13 DOD’s annual report of public and private sector workload allocations required by

10 U.S.C. 2466.
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Army’s Process for 

Identifying Depot-Level 

Maintenance Workload 

Does Not Reflect Statutory 

Definition and Masks Total 

Workload Volume

The Army has not yet revised its maintenance policies and technical 

manuals to reflect recently enacted legislation defining depot maintenance 

workloads. In this context, any attempt by the Army to estimate the amount 

of depot maintenance work conducted at local maintenance facilities likely 

would be misleading. Army officials at the local maintenance facilities that 

we visited had limited knowledge of the definition of depot maintenance 

contained in 10 U.S.C. 2460. When questioned about the amount of depot 

maintenance work conducted at the local level, they routinely referred to 

technical maintenance manuals and the maintenance allocation charts that 

assigned detailed work tasks according to the four levels of Army 

maintenance. These manuals and allocation charts did not address the 

statutory definition. They stated that depot-level work tasks were not 

performed unless higher commands had granted special repair 

authorities.14 Nonetheless, they acknowledged that in some instances local 

repair activities were overhauling or rebuilding various Army equipment. 

Officials said that maintenance manuals specified that the individual work 

tasks did not require that work be performed in a depot. Further, in their 

way of thinking, maintenance work that is not performed in a depot is not 

depot maintenance.15

Army headquarters officials told us they were revising maintenance 

regulations and technical manuals to reflect the statutory definition. In 

commenting on a draft of this report, Army officials stated that they 

planned to publish revised regulations during the first quarter of fiscal year 

2000 that will include the statutory definition for identifying and reporting 

depot maintenance-type workloads. However, efforts to update the Army’s 

technical manuals, will require significant labor intensive reviews and 

analyses by numerous maintenance technicians, and therefore completion 

dates are dependent upon approval of necessary funding to support the 

work. 

14 Special repair authorities are granted after AMC determines that repair sites have 

adequate facilities, equipment, and trained personnel. Once approved, they enable local 

repair sites to perform depot-level tasks on specific items for as long as 3 years. 

15 Our recent report on depot workload allocations provides additional information 

concerning limitations associated with the Army’s depot workload data. See: Depot 

Maintenance: Workload Allocation Reporting Improved, but Lingering Problems Remain

(GAO/NSIAD-99-154, July 15, 1999.)
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Special Repair Authority 

Data Files Are Inconsistent 

and Incomplete

The Army’s report based its estimate of depot maintenance-type workloads 

at non-depot facilities on work conducted under special repair authorities. 

However, the report noted that inconsistencies existed between automated 

SRA databases maintained by various Army headquarters and field-level 

organizations. For example, the Army’s April 1999 report shows 2,233 

approved SRAs based on information obtained from the Army Materiel 

Command’s database and about 1,274 SRAs based on information obtained 

from major operating commands’ automated databases. Further, our 

discussions with members of the Army’s depot proliferation study team 

indicate that the major operating commands have not developed complete 

and accurate reports of SRA expenditure data. For example, the Forces 

Command reported that Fort Hood, Texas, completed SRA workloads 

costing about $369,000, while Fort Hood’s records value the SRA work at 

about $487,000. Further, the reserve components reported only limited 

involvement with SRA workloads, but the actual amount could be higher 

than reported because they routinely performed depot-level tasks that were 

not specifically authorized by a special repair authority. For example, 

during our January 1999 visit to the Aviation Classification Repair Activity 

Depot in Gulfport, Mississippi, we learned that National Guard personnel 

routinely performed depot-level work on older non-mission critical 

helicopters without seeking authority from higher headquarters. An official 

at the Gulfport facility stated that about 10 percent of their workload could 

be considered depot maintenance tasks. However, based on their 

understanding of internal operating procedures formulated by the National 

Guard Bureau, the aviation depots thought they were not required to seek 

approval or report on the value of SRA-related workloads for non-mission 

critical aircraft. Subsequent to our visit, the Gulfport facility initiated 

requests for about 34 individual SRAs, as of July 1999. 

Examples of Significant 

Depot Maintenance 

Workloads Conducted at 

Non-Depot Facilities

While the Army’s report was focused on quantifying the amount of depot 

maintenance work conducted under special repair authorities, it identified 

several examples of significant equipment overhaul and rebuild programs 

that were assigned to local maintenance facilities and that could be 

considered as depot maintenance work under the 10 U.S.C. 2460 definition. 

However, due to uncertainties and inconsistencies in the Army’s criteria for 

categorizing and reporting depot maintenance-type workloads and 

ineffective management information systems, the Army’s April 1999 report 

did not identify the total magnitude of work being conducted, or the 

number of local repair facilities and personnel performing depot 

maintenance-type services. Specifically, our review of these programs 

shows the following:
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• The Army overhauls and rebuilds numerous components—including 

engines, transmissions, circuit cards, and generators—at more than

100 local maintenance facilities managed under the integrated 

sustainment maintenance program. In fiscal year 1998 the integrated 

sustainment maintenance program coordinated secondary item repair 

programs with a reported cost exceeding $260 million. While much of 

this work meets the definition of depot maintenance as specified by

10 U.S.C. 2460, current Army policies and procedures allow it to be done 

at non-depot locations.16 Appendix II provides a list of the maintenance 

organizations currently involved in the Army’s integrated sustainment 

maintenance program within the continental United States. 

• The Army authorizes 20 different local maintenance facilities to repair 

and rebuild tank engines and modules. The Army does not maintain 

records indicating the costs associated with each engine repair action or 

the number of units being repaired at each of the facilities. Army 

officials told us the M1 tank engine work was traditionally assigned to 

the Anniston Army Depot, but later it was partially assigned to the local 

level to avoid the perceived higher prices charged by the working capital 

funded depot. Additionally, Army officials cited readiness advantages in 

having maintenance resources located close to the end users. We noted 

that in some instances M1 engine maintenance capabilities have been 

established and continue to operate in relatively close proximity to one 

another. For example, three units operate in the area of Fort Hood, 

Texas, while two operate in the area of Fort Riley, Kansas, and two 

within the Korean theater of operations. Further, we found that 

capabilities at one of the Fort Riley facilities were recently expanded to 

enable the Kansas National Guard to perform depot-level overhauls that 

will provide work for about 55 full-time employees. A Kansas National 

Guard official estimated that his repair activity has capacity to 

completely overhaul 100 M1 engines per year and plans to become the 

maintenance provider of choice within the National Guard community 

by offering lower rates than can be obtained from working capital 

funded depots. 

16 Over time, the Army’s major operating commands developed extensive local maintenance 

facilities at multiple installations that supported similar capabilities and workloads. In 1996 

the Army established the integrated sustainment maintenance program to consolidate 

workloads and to eliminate some of the proliferation that had occurred.
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• Local maintenance facilities are receiving millions of dollars to repair 

and rebuild tactical wheeled vehicles. For example, between fiscal years 

1995 and 1999 contractor-operated repair facilities at Fort Polk and Fort 

Riley received about $48 million to rebuild and refurbish 1,586

semi-trailers; 225 fuel tankers; 802 cargo trucks and tractors; and 712 

general-purpose vehicles. The contractor operated facilities received 

funding through the Army Forces Command. Further, the Mississippi 

National Guard was completing a multiyear program to repair and 

refurbish 1,182 vehicles under the European retrograde program at a 

budgeted cost of $64 million.17 Also, the Army’s supporting 

documentation for the fiscal year 1998 workload allocations shows that 

the Maine, Mississippi, Kansas, and Texas National Guard organizations 

received about $2 million to rebuild 5-ton trucks. Army officials said 

they were assigned this work because the Army’s remaining depots were 

unaffordable. Based on the Army’s current workload allocation process, 

Army officials commented that the work did not need to be performed 

in a depot. Following the Base Realignment and Closure Commission 

(BRAC) directed closure of the Tooele Army Depot in 1993, the Army 

downgraded all of its tactical-wheeled vehicle maintenance work, 

directing that it be performed at the general support level and below. 

More recently, Army headquarters officials told us they were 

considering changing some of the tactical-wheeled vehicle workload 

classifications to once again reflect depot-level tasking, but it is unclear 

how this change in policy will impact future workload assignments. 

• AMC has established several forward repair activities18 to perform 

depot-level tasks at local installations having a high concentration of 

fielded equipment within a selected geographic area. Personnel assigned 

to the forward repair activities are depot employees paid by the Army 

working capital fund. For example, in fiscal year 1997, the Command 

established a forward repair activity at Fort Bliss, Texas, to support field 

artillery repair programs. As of December 1998, the forward repair 

activity employed 25 civilian personnel under the control and 

supervision of the Army’s Letterkenny, Pennsylvania, depot. Army 

17 This work was accomplished on vehicles that had been returned to the United States as a 

result of downsizing initiatives within the European Theater. The work was intended to 

return the vehicles to operating condition and, according to National Guard officials, 

involved mostly general support and direct support tasks.

18 The forward repair activities are also called logistics centers of excellence. These 

activities are funded, directed, and controlled by the Army Materiel Command and provide 

depot-level support at non-depot locations to lower operating costs at the unit level. 
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briefing documents indicate that concentrating equipment specialists in 

close proximity to users reduced repair costs by 30 percent and repair 

turnaround times by 50 percent. While potentially beneficial, the Army 

has not completed such an analysis on a broader scale. Army officials 

explained that the forward repair activity concept reduced costs and 

repair turnaround times through use of higher skilled personnel and 

more sophisticated test equipment than are normally available at local 

maintenance facilities. To enhance warfighting readiness, AMC is 

planning to establish a forward repair activity in Korea for support of 

various aviation and missile systems.

While we were unable to fully evaluate the costs associated with these 

maintenance providers, they do suggest the presence of significant

depot-level repair capabilities in the Army’s non-depot facilities.

Overall Cost Efficiency of 

Local Repair Programs Is 

Uncertain

The Army’s report stated that major operating commands were taking 

extraordinary measures to avoid placing orders for repair parts with 

wholesale inventory managers due to the perceived higher cost of the 

depot repair programs, but did not evaluate the cost efficiency of the 

alternative local repair sources in view of the Army’s overall requirements. 

Further, the report stated that the Army lacks effective management 

information and procedures to determine the cost tradeoffs of more 

frequent local repair programs versus less frequent and more extensive 

depot overhaul programs. 

Although the Army was unable to fully evaluate the cost benefits of local 

repair programs, the current separation of the wholesale and retail supply 

support systems sub-optimizes resources, leading to the accumulation of 

excess stocks and duplication of repair workloads and infrastructure. For 

example, we found that multiple local maintenance facilities were repairing 

items for which the Army’s wholesale inventory managers already had 

supplies of serviceable items on hand in excess of requirements. As 

indicated in appendix I, the Army’s current fragmented depot maintenance 

management and workloading process may not lead to the most

cost-effective decisions and can undermine efforts to maximize

cost-effectiveness of the Army’s overall logistics support.

In commenting on a draft of this report, Army officials acknowledged that 

local maintenance facilities were repairing items when the Army’s overall 

inventory of serviceable items exceeded requirements. However, they 

stated that this practice would cease upon implementation of the evolving 
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national maintenance program. While the national maintenance program 

will likely reduce the volume of unnecessary and uneconomical local 

repairs, the evolving program is dependent upon timely and effective 

completion of ongoing initiatives to consolidate wholesale and retail level 

stocks. Further, as currently planned, the evolving national maintenance 

strategy will allow local repair activities to continue performing depot 

maintenance-type workloads if repaired items are returned to using 

organizations rather than a supply system shelf. Thus it is unclear to what 

extent these ongoing initiatives will resolve the fragmentation and 

duplication problems we have discussed in this report. 

No Consolidation 

Recommendations 

Made, but Ongoing 

Initiatives Should 

Strenghten 

Management 

Information and 

Promote Consolidation 

Efforts 

The Army’s report noted that better data about the amount and nature of 

the maintenance performed by local repair and maintenance facilities is 

needed before any conclusions can be drawn regarding the potential for 

consolidation of depot maintenance-type facilities. Consequently, the 

report did not include any recommendations for consolidations. 

Nevertheless, the report did outline a number of ongoing initiatives and 

recommended actions to improve the management of information on 

facilities performing depot maintenance-type tasks, which could provide 

management information and organizational controls to identify and 

implement future options for consolidating fragmented depot

maintenance-type workloads. In summary, these initiatives include plans to 

implement a new maintenance strategy and a centralized process for 

evaluating logistics requirements. Although not specifically addressed in 

the report, the Army is implementing a recommendation we made in a 

previous report to develop a strategic plan for depot maintenance-type 

facilities.19 However, key details for implementing many of the planned 

actions remain to be developed. 

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

and Arsenals (GAO/NSIAD-99-31, Nov. 30, 1998).
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Army Plans to Group 

Maintenance Requirements 

Into Two Broad Categories, 

but Impact on Maintenance 

Depots and Local Repair 

Facilities Is Uncertain

The Army is drafting changes to its maintenance policies and procedures 

that will group the four levels of maintenance into two maintenance 

categories—field-level maintenance and national-level maintenance.20 The 

current plans are as follows: 

• The field-level maintenance category will include support from

non-depot activities, including unit level, direct support, and general 

support maintenance facilities. Field-level maintenance will be focused 

on the repair and return of parts and assemblies to the users. Field-level 

maintenance is intended to support the near term readiness of military 

units and will be controlled and financed by the users. 

• The national-level maintenance category will include support from 

regular maintenance depots, industrial base contractors, and qualified 

local maintenance providers. National-level maintenance will be 

focused on the repair and return of parts and assemblies to the supply 

system. National-level maintenance will be distributed by a single 

manager and require the total overhaul of items to like new condition. 

The planned policy revision will more closely align the Army’s maintenance 

categories with the 10 U.S.C. 2460 definition of depot maintenance work. 

As a result, the total range of depot maintenance-type workloads will be 

more visible, which will enable Army leaders to better identify 

opportunities for consolidating fragmented and duplicative workloads. 

Army headquarters officials told us the Army’s major operating commands 

received notice of these emerging changes in a message issued on July 14, 

1999, and estimated that the Army would formally publish the policy 

change in November 1999. We were advised that the Army was developing 

phased implementation plans for this change. However, at this point, 

completion dates and the affect on workload distributions to the regular 

maintenance depots and the Army’s network of local maintenance facilities 

are unclear. Army headquarters officials told us the policy change could 

possibly result in shifting some work from local maintenance providers to 

regular depots. However, commanders may be reluctant to change sources 

of repair, given the perceived lower costs offered by local maintenance 

providers and the existing capabilities and capacity of local providers to 

accomplish necessary repair tasks. 

20 The Army’s four levels of maintenance are unit level, direct support, general support, and 

depot level. The Army’s maintenance policies and structure are described in Army 

Regulation 750-1.
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Army Plans to Centralize 

Maintenance and Logistics 

Management Practices

Key to the Army’s ongoing maintenance restructuring is the 

implementation of a single stock fund to replace the current dual system. In 

November 1997 the Army’s Vice Chief of Staff approved a strategy to 

implement a centralized management process for evaluating logistics 

requirements and managing maintenance facilities. Army officials stated 

that by fiscal year 2001 the current wholesale and retail repair parts 

inventories will be centrally owned and managed; thus customers will no 

longer have financial incentives to seek and obtain maintenance support 

from alternative repair sources. The goal is that future repair program 

requirements will be based on the overall needs of the Army, rather than 

the sub-optimized needs of individual commands. 

In July 1999 the Army designated the Commander of the Army Materiel 

Command as the National Maintenance Manager with responsibility for 

overseeing the Army’s logistics and maintenance support programs. To gain 

purview over the maintenance capabilities and work being performed by 

the Army National Guard and major operating commands within the active 

duty component, the national maintenance office is developing plans to 

transfer command and control of a small number of employees from the 

major operating commands to AMC. Army officials told us they initially 

identified 210 personnel spaces for transfer from the operating commands 

to AMC; however, more recent information indicates the number will be 

substantially lower. Army headquarters officials told us the major operating 

commands are reluctant to transfer resources to AMC because they fear 

such transfers could adversely affect readiness. Additionally, the major 

operating commands do not have visibility over the impact of the 

maintenance actions they take with regard to the Army’s total logistics 

costs. It is unclear to what extent the major operating commands may 

erode the authority of the national maintenance program.

Upon implementation, the national maintenance management office plans 

to centrally coordinate the allocation of depot maintenance-type work to 

private sector contractors, regular working capital funded maintenance 

depots, and a relatively small number of local maintenance facilities. As the 

national maintenance office gains purview over the full range of potential 

providers of depot maintenance-type services, it plans to award future 

maintenance workloads on the basis of best value analysis, and consolidate 

duplicative and redundant workloads as appropriate. Army officials told us 

that ultimately this approach could result in several “mini depots” being 

strategically placed throughout the continental United States to provide for 

the repair and overhaul of items for which the regular depots and 

maintenance contractors lack sufficient capability or capacity. However, at 
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this point it is unclear how these facilities would be organized or the basis 

on which such decisions would be made. In addition, the national 

maintenance office has no firm plans or procedures for assessing the 

capabilities or cost-effectiveness of each depot maintenance-type facility—

critical information that the Army needs for assessing opportunities for 

consolidating or eliminating unneeded maintenance infrastructure. 

Army Report Recommended 

Actions to Improve 

Maintenance Management 

and Oversight

The Army’s report to the Congress recognized opportunities for additional 

improvements to the management of information and coordination of work 

performed by depot maintenance-type facilities. For example, it 

recommended that senior Army leaders and major Army commands 

• expand and institutionalize the Army’s definition of depot maintenance 

in accordance with 10 U.S.C. 2460 and also clarify and reach agreement 

with the Congress on the distinction between field-level repair and 

depot-level maintenance;

• modify and standardize Army data systems to provide for the full 

accounting of depot maintenance-type work at all locations;

• improve processes, procedures, and accounting systems for managing 

SRAs and require all active and reserve component maintenance 

organizations to submit annual SRA production reports to the Army 

Materiel Command; and

• establish policies, decision structure, and analysis tools for determining 

whether opportunities exist for reaching specific conclusions on the 

consolidation of local depot maintenance-type facilities to the depots.

These actions recognize the Army’s inability to provide sufficient 

information on the proliferation of depot maintenance-type work at

non-depot facilities. The report does not provide a time frame for 

accomplishing these actions; therefore it is uncertain when the Army will 

be able to formulate plans for consolidating duplicative and fragmented 

depot maintenance-type workloads.
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Strategic Plan Being 

Developed 

Our November 1998 report on Army industrial facilities recommended that 

the Army develop a strategic plan to guide future downsizing of regular 

depots and manage the full spectrum of local maintenance facilities with 

capabilities to perform depot maintenance-type work.21 While the Army’s 

April 1999 report on depot proliferation did not address the Army’s ongoing 

efforts to develop a strategic plan for its depot maintenance-type facilities, 

we reviewed draft documents associated with the development of the 

strategic plan, and we found that its goals and objectives would be key to 

addressing the proliferation issue, although specific implementation details 

are not yet developed. The five strategic goals, objectives, and performance 

measures associated with the Army’s draft strategic plan are summarized 

as follows:

• Centrally identify and manage all depot maintenance requirements. The 

current depot customer base is fragmented between various commands 

and does not provide an accurate estimate of future work. To achieve 

this goal, the Army plans to develop a process within 1 year to 

coordinate Army-wide depot requirements, improve information 

systems, and evaluate and analyze customer satisfaction. Customers 

will also be required to commit resources to deliver at least 80 percent 

of the forecasted workload to the designated source of repair, and 

depots will be required to rightsize their workforces to support the 

forecasted workload estimates.

• Develop processes and procedures to ensure that source-of-repair 

decisions support overall Army goals and objectives. This process 

affects the amount of work the central depot maintenance manager has 

to distribute across the full spectrum of potential providers and affects 

the stability of workload forecasts, depot maintenance costs, and 

mission readiness. To achieve this goal, the Army plans to develop 

revised source-of-repair processes and policies within 1 year. 

• Maintain a sustainable, multiskilled workforce capable of meeting 

future depot requirements. The depots have been faced with a hiring 

freeze for the last 13 years and are in danger of losing significant 

numbers of skilled personnel as large numbers of employees become 

eligible for retirement. To achieve this goal, the Army will determine and 

publicize the core competencies for each depot and establish a timeline 

for depots to have their workforces proficient in the selected 

competencies. The depots will work with employee unions to establish 

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

and Arsenals (GAO/NSIAD-99-31, Nov. 30, 1998).
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employment practices that rely more heavily on cross-trained artisans 

and temporary employees to supplement the regular depot workforce. 

Within 1 year the Army will draft a plan for hiring and training new 

workers to replace skilled workers that will likely retire in the near 

future.

• Improve the management of material (parts) to provide for more 

efficient depot operations. Currently, the unavailability of high value, 

long-lead time parts prevents the depots from completing maintenance 

work on time. To achieve this goal, the Army plans to improve parts 

forecasting techniques and revise parts ordering policies to enable 

depots to place higher priority requisitions with supply system 

managers. 

• Improve the competitiveness of organic depots by making their rates 

more comparable with private sector contractors. To lower depot rates, 

the Army plans to eliminate one half of the non-value added costs from 

depot rates within 2 years and validate the costs and requirements for 

maintaining unutilized plant capacity during peacetime for use during 

contingencies.

Army officials told us they expect to finalize their plan by September 1999, 

but the final plan’s degree of specificity is unclear. As of June 1999 the draft 

planning documents contained limited implementing details, milestones, or 

funding requirements necessary to achieve the plan’s objectives. Further, 

the plan did not address specific goals and objectives concerning the 

allocation of depot maintenance-type workloads between regular 

maintenance depots and local maintenance providers in both the active and 

reserve component forces, nor did it address methods and goals for 

reducing excess capacity—concerns that we highlighted in our November 

1998 report.

Ongoing Challenges 

Must Be Addressed to 

Eliminate 

Fragmentation and 

Proliferation

Although the Army is taking actions designed to achieve better control over 

its maintenance resources and increase operating efficiencies at its regular 

maintenance depots, we identified several factors that could significantly 

limit its progress unless they are adequately addressed. For example, the 

Army has not clearly articulated plans for evaluating options for effectively 

utilizing maintenance resources at the various types of depot

maintenance-type facilities, including plans for downsizing or 

consolidating unneeded infrastructure. Also, until the Army completes 

ongoing efforts to fully integrate its logistics systems, Army customers may 

continue to choose local sources of repair, rather than ordering depotrepaired items from the Army supply system. 
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Specifically, our work showed that the physical plant infrastructure of the 

Army’s regular maintenance depots and local repair facilities were 

generally sized to accomplish a volume of work in excess of current 

requirements. As already noted, we found that the Army’s major operating 

commands have developed and continue to operate modern and extensive 

industrial maintenance facilities that are similar in appearance when 

compared to the five major maintenance depots, but smaller in size. In 

some cases, active and reserve components independently operate similar 

sized maintenance and repair facilities in close proximity to one another. 

We visited local maintenance facilities at active and reserve component 

units located in five states. (Comparative organizational, staffing, and other 

information for these local repair and maintenance organizations and the 

Army’s five maintenance depots is shown in appendix III.) 

Plans for reducing fragmentation and inefficiencies in depot maintenance 

capabilities will likely be hampered by the Army’s lack of information 

concerning its full capacity for completing depot maintenance-type work at 

existing depot facilities as well as at other locations. Likewise, information 

is lacking on the comparative cost-effectiveness of each category of facility. 

Such information is essential to formulating optimum plans for 

consolidating fragmented, duplicative, and excessive capabilities and 

infrastructure.

Significant reductions in excess capacity, to the extent it involves 

elimination of facilities, will likely be difficult absent legislation authorizing 

future BRAC rounds. As the Army and the Department of Defense (DOD) 

continue to seek authority from the Congress for additional BRAC rounds 

to reduce excess facilities, the Army will need to develop more complete 

information on its depot capabilities and their cost-effectiveness if it is 

going to realistically determine the full extent of its excess facilities. In the 

past, the Army has stated that it only needed to retain three of its 

maintenance depots, but more recent actions indicate that excess capacity 

could be much greater if all depot repair capabilities, as well as greater 

reliance on the private sector for this work were considered. Complete and 

reliable cost information will be essential to sound decisions about the 

most cost-effective location and source for depot-level maintenance.

Progress has been limited in reforming the Army’s logistics supply system 

that supports maintenance facilities. Army officials told us they are 

continuing with plans announced several years ago to integrate the 

wholesale- and retail-level logistics systems; however, completion has been 

delayed until fiscal year 2001. The primary reasons given for delay are
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(1) the inability of the Army’s outdated computer systems to share 

information and (2) the need for approval of financial resources to support 

system changes. While the Army has been slow in implementing logistic 

reform initiatives, actions taken a few years ago to charge customers for 

repairable items previously provided at no cost continue to stimulate 

efforts of field-level customers to seek alternate sources of supply through 

the use of local maintenance and repair facilities. Our work shows that 

customers have minimized their local equipment support costs, even 

though inefficiencies were created in the larger maintenance support 

system (see app. I). Therefore, any plan to reduce the proliferation of depot 

maintenance-type capabilities at the local level is highly dependent upon 

timely implementation of the Army’s logistics support system reforms. 

Conclusions The Army incompletely quantified the extent of depot maintenance-type 

work performed at non-depot facilities. Data was not obtained using the 

recently enacted statutory definition of depot maintenance work. 

Consequently, the Congress and Army managers do not know the extent to 

which depot repair capabilities have spread to other locations. However, 

our work indicates the extent of proliferation is greater than reported by 

the Army and is contributing to excess depot repair capabilities within the 

Army. 

The Army’s report, citing inadequate data on the subject, did not make any 

recommendations for consolidating depot-type facilities to the public 

depots. Nonetheless, the report did present a number of related initiatives 

and recommendations to improve the management of information on 

organizations performing depot maintenance-type work, reforms which 

could provide a framework for developing information in support of future 

consolidations. These initiatives include actions to centralize maintenance 

and logistics management practices under a national manager responsible 

for overseeing the program; however, it is unclear how or when the 

national manager will gain authority over maintenance capabilities and 

work currently provided by the Army National Guard and major operating 

commands within the active duty component. The Army recognizes that it 

needs to modify and standardize Army data systems to fully account for 

depot maintenance-type work at all locations, but it has not established 

clear action plans, milestones, and funding requirements for doing so. The 

Army is also taking steps to develop a strategic plan for depot maintenance 

facilities. However, key details for implementing many of the planned 

actions have not been supplied.
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Lastly, we identified a number of ongoing challenges the Army faces in 

attempting to address the fragmentation of depot maintenance-type 

workloads. Key among them is the significant amount of depot 

maintenance-type capabilities operated by major commands in the active 

Army and the National Guard, each with its own high-level proponents. 

Further, the Army currently lacks complete information on the magnitude 

of its capabilities for performing depot-level maintenance at various 

locations, and it lacks information on the cost-effectiveness of each 

category of maintenance and repair facility, including related supply 

support. Accordingly, Army leaders are faced with a formidable challenge 

as they attempt to eliminate fragmentation, duplication, and excess 

capacities, and at the same time implement solutions that are best from a 

warfighting perspective and, most cost-effective to the Army as a whole.

Recommendations We recommend that the Secretary of Defense require that the Secretary of 

the Army, in developing and implementing the Army’s strategic plan for 

depot maintenance facilities, ensure that the strategic plans and tactical 

implementing plans

• identify requisite action items, time frames, and funding requirements 

for improving the Army’s information management systems to fully 

identify the magnitude and cost-effectiveness of depot

maintenance-type work at various locations within the Army; 

• establish (1) clear time frames and action plans for assessing 

requirements for the various types of depot maintenance facilities and 

(2) plans for achieving necessary consolidations and reductions of 

excess capabilities; and 

• incorporate the depot maintenance-type capabilities of both active and 

reserve components under the national maintenance program and 

assign the national maintenance manager with requisite responsibility 

and authority for depot maintenance capabilities in active and reserve 

components.

Agency Comments and 

Our Evaluation 

The Department of Defense provided written comments that are included 

as appendix IV and technical comments that have been incorporated in the 

body of the report as appropriate. DOD’s comments stated that the 

Department generally concurred with our recommendations. 
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With regard to the first two recommendations, DOD said that the Army has 

developed a strategic plan for improving its depot maintenance program 

from a corporate perspective. Further, the next step in this planning 

process is to establish timelines and assign responsibility for each goal and 

objective to specific organizations. More specific strategic action plans are 

expected to be developed through a series of project action teams by the 

second quarter of fiscal year 2000. We believe the completion of a 

corporate strategic plan is a step in the right direction. However, we are 

concerned that available information about this plan does not confirm how 

the Army plans to identify and obtain necessary funding to support 

implementation of effective management information systems for 

determining the magnitude and analyzing the cost-effectiveness of depot 

maintenance-type work at various locations within the Army. Further, the 

Army has not determined how or when it might develop plans and goals for 

achieving consolidations of redundant maintenance infrastructure and 

reductions in costly excess industrial capabilities. 

With regard to the third recommendation, DOD stated that the Army is 

implementing a national maintenance manager program that will be the 

focal point for sustainment maintenance requirements. As currently 

planned, the national maintenance program, which will be managed by the 

Army Materiel Command, includes plans for consolidating future 

requirements for the overhaul of component parts returned to the supply 

system. These workloads will be competitively distributed to maintenance 

activities with existing capability and capacity. Under this concept the 

Materiel Command could choose to distribute some portion of work to 

local maintenance activities remaining under the command and control of 

active and reserve component operating forces. The evolving national 

maintenance program concept appears to be a reasonable start toward 

addressing problems identified in our report. However, a variety of factors 

make it unclear to what extent this concept can be successfully 

implemented to achieve desired consolidations and reductions in excess 

capacity within the Army’s maintenance infrastructure. For example, while 

the evolving national maintenance program is intended to consolidate and 

distribute overhaul work for components returned to the supply system, 

the evolving management framework will continue to allow local 

maintenance activities to repair items returned directly to using 

organizations—work which could meet the statutory definition of depot 

maintenance. Additionally, some other depot maintenance-type work is not 

covered by the national maintenance program. For example, it does not 

address the allocation of depot maintenance-type requirements for 

overhauling, rebuilding, or upgrading of major end items, such as tactical 
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wheeled vehicles, that are currently being overhauled in field-level 

maintenance activities or by contracts managed by field-level organizations 

even though this work meets the statutory definition of depot

maintenance-type work.

Scope and 

Methodology

To evaluate the completeness and accuracy of the Army’s report to the 

Congress on the proliferation of depot maintenance-type facilities—

including (1) the amount of depot maintenance-type work assigned to local 

maintenance facilities and the cost efficiency of such work and (2) plans 

for consolidating fragmented maintenance operations—we interviewed 

officials and obtained documentation from the Office of the Army’s Deputy 

Chief of Staff for Logistics, Army Materiel Command, Army Forces 

Command, Army Training and Doctrine Command, Army Reserve 

Command, National Guard Bureau, and the Eighth U. S. Army (Korea). We 

also interviewed members of the Army’s study group to gain insight into the 

varying approaches that exist within the Army community for identifying 

the detailed characteristics of depot maintenance-type workloads and 

reviewed copies of backup documentation supporting the Army’s depot 

proliferation study. We reviewed copies of current and proposed changes to 

Army maintenance regulations and compared current and emerging policy 

statements with the depot maintenance definition in 10 U.S.C. 2460. We 

also reviewed the Army’s report to the Congress concerning the allocation 

of depot maintenance-type workloads to public and private sector 

providers. We made site visits to observe ongoing work and discussed 

depot proliferation issues with officials at three of the Army’s five working 

capital funded maintenance depots and selected local maintenance 

facilities located in Texas, Kansas, Louisiana, North Carolina, Mississippi, 

and several locations in Korea. In addition, we obtained summary 

information from a recently completed analysis by the Army’s Materiel 

Systems Analysis Agency and judgmentally selected and analyzed 43 items 

repaired by local maintenance facilities under the integrated sustainment 

program during fiscal year 1998. We also discussed and obtained comments 

from inventory management officials as deemed appropriate.

To determine the challenges the Army faces in its efforts to resolve depot 

maintenance proliferation and infrastructure fragmentation, we 

interviewed officials representing the Army’s Deputy Chief of Staff for 

Logistics, the Army Materiel Command, and Army contractors assisting in 

the development of the Army’s draft strategic plan. We reviewed 

background documentation describing the Army’s tentative strategic goals 

and objectives for the depot maintenance enterprise, and we relied heavily 
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on information obtained in prior GAO reviews of Army depot maintenance 

programs.

We conducted our review from October 1998 to June 1999 in accordance 

with generally accepted government auditing standards.

We are sending copies of this report to Senator John W. Warner, Chairman, 

and Senator Carl Levin, Ranking Minority Member, Senate Committee on 

Armed Services; the Honorable William S. Cohen, Secretary of Defense; the 

Honorable Louis Caldera, Secretary of the Army; and the Honorable Jacob 

J. Lew, Director, Office of Management and Budget. We will also make 

copies available to others on request. 

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

concerning this report. Other GAO contacts and acknowledgments are 

listed in appendix V.

David R. Warren, Director

Defense Management Issues
Page 29 GAO/NSIAD-00-20 Depot Maintenance
Page 30 GAO/NSIAD-00-20 Depot Maintenance

Appendix I

Repair Parts Obtained at Local Levels 

Bypassing Normal Supply Process ApendxIi

Retail supply managers and local combat units claim substantial cost 

avoidance by having items repaired locally versus ordering replacement 

items from the wholesale supply system. Wholesale system managers store 

items in government warehouses that have been repaired in regular 

maintenance depots and new items purchased from private contractors. 

For example, in fiscal year 1998, the retail supply customers had 19 UH-1 

helicopter engines repaired by local maintenance organizations. (These 

engines have a replacement price of $167,500 per unit or approximately 

$75,000 when repairable carcasses are returned to the wholesale manager.) 

As an alternative, the retail supply managers arranged for the unserviceable 

engines to be repaired by direct-funded local repair facilities at a reported 

unit cost of $5,000 per engine. The cost avoidance, at the user activity level, 

totals $1.3 million, or 19 engines with a cost avoidance of $70,000 per 

engine. 

To the user, the local source appears to be a less costly alternative to more 

centrally managed supply sources operating under the Army’s working 

capital fund—a funding source that, unlike direct- or mission-funded 

facilities, seeks to recoup the full costs of the products and services it 

provides to customers. Whether the local source is less expensive is 

unclear since comparable cost and performance data are not readily 

available. However, the perception of lower costs for maintenance repairs 

and parts obtained at below depot levels was followed by a downward 

trend in workloads at Army depots following the change in policy that 

required retail customers, such as combat units, to pay for depot repairs 

that were previously provided at no cost. Table 1 shows such decreases in 

workloads involving various military engines at three of the Army’s depots.
Appendix I

Repair Parts Obtained at Local Levels 

Bypassing Normal Supply Process

Page 31 GAO/NSIAD-00-20 Depot Maintenance

Table 1: Historical Workload Data for the Repair and Overhaul of Various Military Engines at Three Army Depots

a

Armored Personnel Carriers.

Source: Army depots.

Our work shows that local maintenance facilities were expected to rebuild 

end items and components and return them to normal operating 

condition—a maintenance concept the Army refers to as

reliability-centered, inspect and repair only as necessary. In comparison, 

depots are expected to overhaul and rebuild items to like new condition—a 

maintenance concept requiring that most assemblies or sub-assemblies be 

rebuilt or replaced with little or no regard to current operability and 

remaining useful life.

Army Lacks Data to 

Adequately Compare 

Cost-Effectiveness of 

Local Repairs and 

Depot Overhauls 

We found that the Army currently has only limited historical data to 

evaluate the cost benefits of more frequent local repairs versus less 

frequent but more comprehensive depot overhaul programs. For example, 

information recently developed at the Army’s National Training Center at 

Fort Irwin, California, shows a reported 21-percent reduction in operating 

and support costs for Abrams tanks supported by more extensive depot 

overhauls compared to operating costs of tanks repaired under the 

reliability-centered maintenance process. Army documents indicate that 

overhauled tanks are completely disassembled and rebuilt to like new 

condition, including replacement or refurbishment of all components with 

any evidence of wear. In comparison, local maintenance and repair 

facilities performing work under the reliability-centered maintenance 

concept generally do not replace or refurbish component parts until they 

fail. 

Fiscal year

Tank turbine engines at

Anniston, Alabama, depot

Helicopter turbine engines at

Corpus Christi, Texas, depot

APCa

 diesel engines at

Red River, Texas, depot

1991 506 1,518 1,721

1992 348 1,063 1,646

1993 57 853 52

1994 33 740 77

1995 5 440 741

1996 76 393 816

1997 55 472 721

1998 100 295 186
Appendix I

Repair Parts Obtained at Local Levels 

Bypassing Normal Supply Process

Page 32 GAO/NSIAD-00-20 Depot Maintenance

For several reasons, the Army lacks comparative information on the 

relative cost-effectiveness of the two sources of repair for its other weapon 

systems. First, the Army does not routinely track maintenance and 

operating costs for individual supply items. Further, many of the Army’s 

current weapon systems are designed on a modular basis; therefore 

operating costs for such items (e.g. aircraft and tank engines) cannot be 

easily tracked due to regular and routine exchanges of modular 

components. 

The Army’s April 1999 report to the Congress stated that major operating 

commands were taking extraordinary measures to avoid placing orders 

with wholesale inventory managers due to the perceived higher cost of the 

depot repair programs. Further, the report stated that local repair and 

maintenance organizations were not actively seeking to take work formerly 

assigned to major depots, but the report did not assess the

cost-effectiveness and need for local repair programs in relation to the 

Army’s overall requirements. A study by the Army’s Materiel Systems 

Analysis Activity showed that 42 percent of the items repaired by local 

maintenance facilities during the first three quarters of fiscal year 1998 

could have been avoided if the Army had issued replacement items from 

existing inventories of serviceable items. Our work shows that wholesale 

item managers were generally not aware of the local repair programs, and 

they commented that these actions contribute to excessive stock build-up. 

In one instance, we found that a wholesale item manager had sent excess 

engines to disposal that were subsequently reclaimed by a retail supply 

manager, repaired outside the formal depot system, and entered into the 

retail stock accounts for later sale to retail customers at reduced prices.

Inefficiencies in Multiple 

Uncoordinated Supply 

Sources

While the Army’s report did not adequately address the inefficiencies 

inherent to the Army’s current logistics systems, our work shows that 

multiple local maintenance facilities were repairing items for which Army 

wholesale managers already had supplies of serviceable items on hand in 

excess of requirements. Such inefficiencies could have been avoided if the 

Army had integrated management responsibility for its wholesale- and 

retail-level inventories. Our limited review of selected items managed by 

three of the Army’s wholesale inventory management commands shows 

repairs of some items were being accomplished by local maintenance 

facilities even though central logisticians had available stocks of usable 

items. The following examples illustrate this problem:
Appendix I

Repair Parts Obtained at Local Levels 

Bypassing Normal Supply Process

Page 33 GAO/NSIAD-00-20 Depot Maintenance

• We reviewed the wholesale supply records for 10 items managed by the 

Army’s Communications-Electronics Command, but which had been 

repaired by local maintenance facilities. For 7 of the 10 items, we found 

that existing wholesale inventories would have likely satisfied

retail-level requirements. For example, Army records show that local 

maintenance facilities at Forts Riley and Gordon repaired a total of 57 

power supplies at an estimated cost of $5,000 when the wholesale 

inventory contained 6,932 serviceable units to support a total 

requirement of 2,052 units. Additionally, Army records indicate that Fort 

Hood repaired 25 radios used on weather radar systems at an estimated 

cost of about $30,000 when the wholesale-level inventory contained 314 

serviceable units to support a requirement of only 25. In both instances, 

the item managers were unaware that repairs were being accomplished 

at field locations. 

• We reviewed the wholesale supply records for 19 items managed by the 

Army’s Aviation and Missile Command, but which had been repaired by 

local maintenance facilities. For 8 of the 19 items, we found that existing 

wholesale inventories would have likely satisfied some of the retail-level 

requirements. For example, Army records show that Forts Carson and 

Bragg repaired a total of 65 flutter dampeners used on the UH-60 aircraft 

for a total estimated cost of about $25,500 when wholesale inventory 

contained 1,459 units on hand to support a requirement of 784. 

Additionally, Army records indicate that Fort Hood repaired 5 night 

sensor assemblies for a total estimated cost of about $60,000 when the 

wholesale inventory contained 25 units to support estimated 

requirements of 6.

• We reviewed the wholesale supply records for 14 items managed by the 

Army’s Tank-Automotive and Armaments Command, but which had 

been repaired by local maintenance facilities. For 6 of the 14 items, we 

found that existing wholesale inventories would have likely satisfied 

some of the retail-level requirements. For example, Forts Bliss and 

Bragg repaired 18 engines for 5-ton trucks in fiscal year 1998 at a total 

estimated cost of $40,674 during which time the wholesale item manager 

determined that 37 serviceable items were excess to the Army’s needs 

and had them sent to disposal yards. 
Appendix I

Repair Parts Obtained at Local Levels 

Bypassing Normal Supply Process

Page 34 GAO/NSIAD-00-20 Depot Maintenance

Reclamation and Repair of 

Excess Items Further 

Indicates Degree of 

Inefficiencies Present in 

Logistics System

The Army’s Forces Command currently has contractor operated materiel 

management and repair centers at seven active Army installations. These 

contractor-operated facilities repair and refurbish more than

350 component parts and maintain inventories that were reportedly valued 

at about $40 million near the end of fiscal year 1998. In fiscal year 1998, the 

contractor-operated centers withdrew excess material from the Defense 

Marketing and Reutilization Service with an estimated replacement value 

of about $60 million, of which items valued at about $41 million were 

considered unserviceable. During the same period, the repair centers 

received about $1.8 million to repair and refurbish unserviceable items. 

Forces Command representatives told us that none of the repair work was 

considered depot level and most involved only limited testing and servicing 

to ensure operability. Once the items are repaired, the Forces Command 

offers them for resale to customers at reduced prices.

This practice has the potential for creating significant inefficiencies in the 

wholesale supply system. It is essentially a duplicate wholesale supply 

system that operates without coordination with the formal system. While 

the Forces Command has claimed cost avoidance totaling

$195 million over a 4-1⁄2 year period, we cannot be certain of the

cost-effectiveness of such logistics practices to the Army as a whole, given 

the duplication in repair capabilities and wholesale inventory management 

functions. Further, this practice likely contributes to inventory items being 

declared as excess because actual demands are not known to the 

wholesale inventory managers.
Page 35 GAO/NSIAD-00-20 Depot Maintenance

Appendix II

Potential Providers of Depot MaintenanceType Services Maintenance Program Within 

the Continental United States ApendxIi

Number of personnel

Maintenance activity Direct labor Indirect labor

National Guard

CSMS Montgomery, Ala. 92 19

CSMS Windsor Locks, Conn. 33 14

CSMS New Castle, Del. 10 4

CSMS Starke, Fla. 57 14

CSMS Atlanta, Ga. 61 17

CSMS Springfield, Ill. 36 11

CSMS Riverside, Ill. 27 9

CSMS Indianapolis, Ind. 66 15

CSMS Frankfort, Ky. 49 13

CSMS Pineville, La. 75 17

CSMS Augusta, Maine 26 9

CSMS Havre De Grace, Md. 42 10

CSMS Fort Devens, Mass. 69 13

CSMS Lansing, Mich. 65 19

CSMS Hattiesburg, Miss. 99 28

CSMS Concord, N.H. 12 5

CSMS Bordentown, N.J. 48 9

CSMS West Orange, N.J. 35 9

CSMS Peekskill, N.Y. 35 17

CSMS Staten Island, N.Y. 37 16

CSMS Rochester, N.Y. 39 11

CSMS Raleigh, N.C. 81 20

CSMS Newark, Ohio 64 19

CSMS Annville, Pa. 86 17

CSMS Eastover, S.C. 85 27

CSMS Smyrna, Tenn. 85 17

CSMS Richmond, Va. 32 14

CSMS Point Pleasant, W.Va. 20 9

CSMS Edinburgh, Ind. 19 7

CSMS Cullman, Ala. 50 18

CSMS Coraopolis, Pa. 26 6

MATES Fort Stewart, Ga. 152 48

MATES Camp Grayling, Mich. 57 21

(continued)
Appendix II

Potential Providers of Depot MaintenanceType Services Maintenance Program Within 

the Continental United States

Page 36 GAO/NSIAD-00-20 Depot Maintenance

Number of personnel

Maintenance activity Direct labor Indirect labor

MATES Fort Polk, La. 88 19

MATES Fort Pickett, Va. 86 24

MATES Fort Knox, Ky. 47 20

MATES Fort Bragg, N.C. 95 28

MATES Fort Drum, N.Y. 69 28

CSMS Phoenix, Ariz. 42 8

CSMS Little Rock, Ark. 69 18

CSMS Stockton, Calif. 45 28

CSMS Long Beach, Calif. 65 13

CSMS Longmont, Colo. 26 10

CSMS Boise, Idaho 57 33

CSMS Johnston, Iowa 53 16

CSMS Topeka, Kans. 26 10

CSMS Little Falls, Minn. 68 14

CSMS Jefferson City, Mo. 58 15

CSMS Helena, Mont. 27 8

CSMS Lincoln, Nebr. 20 13

CSMS Santa Fe, N. Mex. 43 8

CSMS Norman, Okla. 51 18

CSMS Clackamus, Oreg. 70 17

CSMS Mitchell, S. Dak. 22 9

CSMS Fort Worth, Tex. 61 22

CSMS Austin, Tex. 79 20

CSMS Draper, Utah 42 19

CSMS Tacoma, Wash. 47 19

CSMS Camp Douglas, Wis. 51 16

CSMS Rapid City, S. Dak. 9 6

MATES Colorado Springs, Colo. 27 15

MATES San Miguel, Calif. 159 29

MATES Fort Irwin, Calif. 69 23

MATES Fort Sill, Okla. 17 6

MATES Fort Hood, Tex. 190 49

MATES Yakima, Wash. 125 45

MATES Sparta, Wis. 45 21

MATES Fort Riley, Kans. 84 23

AVCRD Gulfport, Miss. 84 21

(continued)
Appendix II

Potential Providers of Depot MaintenanceType Services Maintenance Program Within 

the Continental United States

Page 37 GAO/NSIAD-00-20 Depot Maintenance

Number of personnel

Maintenance activity Direct labor Indirect labor

AVCRD Groton. Conn. 105 26

AVCRD Springfield, Mo. 100 25

AVCRD Fresno, Calif. 81 20

Army Reserve

DOL Fort Dix, N.J. 19 21

DOL Fort McCoy, Wis. 59 34

Active Army-government operated

DOL Fort Bragg, N.C. 90 88

GS MAINT Fort Bragg, N.C. 215 104

DOL Fort Benning, Ga. 18 251

DOL Fort Campbell, Ky. 55 81

DOL Fort Drum, N.Y. 56 44

DOL Fort Eustis, Va. 57 53

DOL Fort Gordon, Ga. 66 51

DOL Fort Jackson, S.C. 24 55

DOL Fort Knox, Ky. 29 133

DOL Fort Lee, Va. 13 34

DOL Fort Polk, La. 231 67

DOL Fort Rucker, Ala. 47 25

DOL Fort Stewart, Ga. 61 70

DOL Fort Bliss, Tex. 66 154

DOL Fort Carson, Colo. 95 51

DOL Fort Huachuca, Ariz. 87 18

DOL Fort Hood, Tex. 113 139

GS MAINT Fort Hood, Tex. 120 147

DOL Fort Leonard Wood, Mo. 55 62

DOL Fort Riley, Kans. 158 55

DOL Fort Sill, Okla. 101 36

Active Army-contractor operated

DOL Fort Campbell, Ky. 48 11

DOL Fort Stewart, Ga. 29 29

DOL Fort Bragg, N.C. 27 3

DOL Fort Bliss, Tex. 34 8

DOL Fort Hood, Tex. 125 93

DOL Fort Polk, La. 51 9

DOL Fort Sill, Okla. 106 69

Table notes on next page. (continued)
Appendix II

Potential Providers of Depot MaintenanceType Services Maintenance Program Within 

the Continental United States

Page 38 GAO/NSIAD-00-20 Depot Maintenance

DOL—Directorate of Logistics

CSMS—Consolidated Support Maintenance Shop

MATES—Maneuver Area Training Site 

GS Maint—General Support Maintenance Companies (active duty military)

AVCRAD—Aviation Classification Repair Activity Depot

Source: U.S. Army Materiel Command.
Page 39 GAO/NSIAD-00-20 Depot Maintenance

Appendix III

Local Maintenance Facilities and Depots 

Visited by GAO ApendxIi

DOL—Directorate of Logistics

AVCRAD—Aviation Classification Repair Activity Depot

MATES—Maneuver Area Training Equipment Sites

CSMS—Consolidated Support Maintenance Shop

GSM—General Support Maintenance

Location Organization

Government

staff

Contractor

staff

Facility size in

square feet

Year facility

constructed/

renovated

Fort Bliss, Texas DOL-Surface 113 6 160,747 1997

Fort Hood, Texas DOL-Surface 188 0 462,000 1980/1990s

DOL-Aviation 0 385 211,000 1970s

National Guard MATES 243 0 252,000 1980/1992

190th General Support 267 10 33,848 1958

Fort Riley, Kansas DOL-Surface 10 139 186,000 1980s

National Guard MATES 83 0 130,000 1981/1993

Fort Polk, Louisiana DOL-Surface 220 9 175,673 1995

DOL-Aviation 1 59 250,600 1989

National Guard MATES 106 0 207,119 1976/1995

Fort Bragg, North Carolina DOL-Surface 165 18 318,000 1994

DOL-Aviation 21 30 115,000 1995

National Guard MATES 116 0 87,500 1992

Mississippi National Guard AVCRAD−Gulfport 112 31 356,000 1988

Camp Shelby− CSMS 93 0 79,301 1995

Camp Shelby− GSM 63 0 113,598 1940s/1999

Camp Shelby− MATES 108 0 138,000 1983

Anniston Army Depot Maintenance depot 1,771 0 1,392,000 1950s/1990s

Corpus Christi Army Depot Maintenance depot 2,690 88 2,119,652 1941/1999

Letterkenny Army Depot Maintenance depot 1,090 0 894,232 1940s/1990s

Red River Army Depot Maintenance depot 841 25 556,262 1940s/1980s

Tobyhanna Army Depot Maintenance depot 2,506 0 1,400,000 1951/1994
Page 40 GAO/NSIAD-00-20 Depot Maintenance

Appendix IV

Comments From the Department of Defense ApendxiIV
Appendix IV

Comments From the Department of Defense

Page 41 GAO/NSIAD-00-20 Depot Maintenance
Page 42 GAO/NSIAD-00-20 Depot Maintenance

Appendix V

GAO Contacts and Staff Acknowledgments ApenxdVi

GAO Contacts Barry Holman, (202) 512-8412

Julia Denman, (202) 512-8412

Acknowledgments In addition to those named above, Glenn Knoepfle, David Epstein, Bonnie 

Carter, Paul Newton, Edward Waytel, David Marks, and Kate Monahan 

made key contributions to this report.
Page 43 GAO/NSIAD-00-20 Depot Maintenance

Related GAO Products

Depot Maintenance: Status of the Navy’s Pearl Harbor Pilot Project

(GAO/NSIAD-99-199, Sept. 10, 1999).

Depot Maintenance: Maintenance of T700 Series Engines for U.S. Forces in 

Korea (GAO/NSIAD-99-234R, Aug. 13, 1999).

Depot Maintenance: Workload Allocation Reporting Improved, but 

Lingering Problems Remain (GAO/NSIAD-99-154, July 13, 1999.

Air Force Logistics: C-17 Support Plan Does Not Adequately Address Key 

Issues (GAO/NSIAD-99-147, July 8, 1999).

Army Logistics: Status of Proposed Support Plan for Appache Helicopter

(GAO/NSIAD-99-140, July 1, 1999). 

Air Force Depot Maintenance: Management Changes Would Improve 

Implementation of Reform Initiatives (GAO/NSIAD-99-63, June 25, 1999).

Public-Private Competitions: Reasonable Processes Used for San Antonio 

Engine Depot Maintenance Award (GAO/NSIAD-99-155, May 27, 1999).

Public-Private Competitions: Reasonable Processes Used for Sacramento 

Depot Maintenance Award (GAO/NSIAD-99-124, May 12, 1999).

Navy Ship Maintenance: Allocation of Ship Maintenance Work in the 

Norfolk, Virginia, Area (GAO/NSIAD-99-54, Feb. 24, 1999).

Army Industrial Facilities: Workforce Requirements and Related Issues 

Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30, 1998).

Navy Depot Maintenance: Weaknesses in the T406 Engine Logistics 

Support Decision (GAO/NSIAD-98-221, Sept. 14, 1998). 

Defense Depot Maintenance: Public and Private Sector Workload 

Distribution Reporting Can Be Further Improved (GAO/NSIAD-98-175,

July 23, 1998).

Defense Depot Maintenance: Contracting Approaches Should Address 

Workload Characteristics (GAO/NSIAD-98-130, June 15, 1998).

Defense Depot Maintenance: Use of Public-Private Partnering 

Arrangements (GAO/NSIAD-98-91, May 7, 1998).
Related GAO Products

Page 44 GAO/NSIAD-00-20 Depot Maintenance

Navy Ship Maintenance: Temporary Duty Assignments of Temporarily 

Excess Shipyard Personnel Are Reasonable (GAO/NSIAD-98-93, Apr. 21, 

1998).

Public-Private Competitions: DOD’s Additional Support for Combining 

Depot Workloads Contains Weaknesses (GAO/NSIAD-98-143, Apr. 17, 

1998).

Defense Depot Maintenance: DOD Shifting More Workload for New 

Weapon Systems to the Private Sector (GAO/NSIAD-98-8, Mar. 31, 1998).

Depot Maintenance: Lessons Learned From Transferring Alameda Naval 

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

Force Structure: Army’s Efforts to Improve Efficiency of Institutional 

Forces Have Produced Few Results (GAO/NSIAD-98-65, Feb. 26, 1998).

Defense Depot Maintenance: Information on Public and Private Sector 

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

Outsourcing DOD Logistics: Savings Achievable but Defense Science 

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

Navy Regional Maintenance: Substantial Opportunities Exist to Build on 

Infrastructure Streamlining Progress (GAO/NSIAD-98-4, Nov. 13, 1997).

Defense Depot Maintenance: Challenges Facing DOD in Managing Working 

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

Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in 

Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-112,

May 1, 1997) and (GAO/T-NSIAD-97-111, Mar. 18, 1997). 

Defense Outsourcing: Challenges Facing DOD as It Attempts to Save 

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

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

Army Depot Maintenance: Privatization Without Further Downsizing 

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

(709375) Letr
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