United States General Accounting Office

GAO Report to Congressional Requesters

January 1998 DEFENSE DEPOT

MAINTENANCE

Information on Public

and Private Sector

Workload Allocations

GAO/NSIAD-98-41

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-277291 

January 20, 1998

Congressional Requesters

As requested, we reviewed the Department of Defense’s (DOD) guidelines

and procedures for identifying depot maintenance workloads and

quantifying the public and private sectors’ share of depot maintenance

funding. Specifically, this report (1) summarizes public and private

workload distributions as reported by the military departments and

defense agencies for fiscal years 1996 through 2002 and (2) analyzes the

procedures DOD uses to define and quantify depot workload distribution.

Background Depot-level maintenance and repair of military weapons and equipment

involve extensive shop facilities, specialized equipment, and highly skilled

technical and engineering personnel. In recent years, the distinction

between depot maintenance and lower levels of maintenance has become

less pronounced. Public sector depot maintenance work is currently

conducted in 22 major government-owned and government-operated

maintenance depots and a number of other government-owned facilities,

including post-production software support activities, laboratories, and

Army arsenals. According to DOD officials, private sector depot

maintenance work is conducted by commercial contractors at about 1,100

contractor-owned and -operated facilities at various geographic locations.

Legislative Requirements

on Public and Private

Sector Workload

Distribution

The allocation of depot maintenance workload between the public and

private sectors is governed by 10 U.S.C. 2466. According to the statute, at

the time of our review, not more than 40 percent of funds made available

to a military department or defense agency for depot-level maintenance

and repair was to be used to contract for performance by nonfederal

government personnel—also referred to as the 60/40 rule. The fiscal 

year 1998 Defense Authorization Act increased the percentage of

depot-level maintenance and repair work that can be contracted to

nonfederal government personnel to not more than 50 percent, from the

previous 40-percent maximum.

Other statutes that affect the extent to which depot-level workloads can be

converted to private sector performance include 10 U.S.C. 2469, which

provides that DOD-performed depot maintenance and repair workloads

valued at not less than $3 million cannot be changed to contractor

performance without a public-private competition, and 10 U.S.C. 2464,

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which, at the time of our review, provided that DOD activities should

maintain a logistics capability sufficient to ensure technical competence

and resources necessary for an effective and timely response to a national

defense emergency.

Prior GAO Statements

Concerning 60/40

Requirements and the

Accuracy and

Completeness of Reported

Public and Private

Workload Data

In April 1996, we testified before the Subcommittee on Readiness, Senate

Committee on Armed Services, and the Subcommittee on Military

Readiness, House Committee on National Security,1

 on DOD’s revised depot

maintenance policy and its report on public-private depot workload

allocations. We noted that DOD’s policy clearly intended to shift additional

workload to the private sector when readiness, sustainability, and

technology risks can be overcome. In May 1996, we reported on DOD’s

reported public-private depot workload allocations.2

 We noted that

• with few exceptions, the 60/40 rule had not affected past public-private

workload allocation decisions;

• without repeal of the 60/40 rule, the military departments would not be

able to follow through on large-scale plans to compete depot maintenance

workloads between public and private sector activities;

• DOD’s report did not provide a complete, consistent, and accurate picture

of depot maintenance workloads because it did not include (1) interim

contractor support and contractor logistics support costs, (2) labor costs

to install modification and conversion kits, and (3) software maintenance

support, most of which was obtained from private sector firms using

procurement funding; and

• DOD’s reported public sector workload allocation included costs for parts

and services the public depots purchased from private sector contractors,

some of which were costs for government-furnished material provided to

private contractors.

In our report, we suggested that Congress may wish to require that (1) all

depot maintenance workload categories3

 be included in future 60/40

reports, regardless of funding source, and (2) outlays by public depots for

1

Defense Depot Maintenance: Privatization and the Debate Over the Public-Private Mix

(GAO/T-NSIAD-96-146, Apr. 16, 1996) and Defense Depot Maintenance: Privatization and the Debate

Over the Public-Private Mix (GAO/T-NSIAD-96-148, Apr. 17, 1996).

2

Defense Depot Maintenance: More Comprehensive and Consistent Workload Data Needed for

Decisionmakers (GAO/NSIAD 96-166, May 21, 1996).

3

The workload categories include interim contractor support and contractor logistics support, labor

costs for installing modification and conversion kits, and computer software maintenance.

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purchases of repair parts and services be included in the private sector’s

workload share.

DOD Efforts to Address

60/40 Requirements

For fiscal years 1994 through 1996, DOD was required by law to report to

Congress on the public and private sector workload mix for each military

department and agency. Although this requirement was not effective for

fiscal year 1997, the Deputy Under Secretary of Defense (Logistics), in

January 1997, as part of his oversight responsibilities to verify current and

projected compliance with 60/40 statutory requirements, asked the

military departments to quantify planned funding for depot maintenance

workloads assigned to the public and private sectors for fiscal years 1996

through 2002.4

 The military departments were requested to follow an

approach similar to the one used in responding to previously mandated

congressional reporting requirements. The military departments and the

Defense Logistics Agency developed summary workload distribution

reports for the Office of the Secretary of Defense (OSD) based on financial

information contained in readily available budget data. In May 1997, OSD

prepared a briefing for the Defense Depot Maintenance Council that

showed the percentage of public and private sector depot maintenance

workload distribution for each military department.5

Our review does not address subsequent changes in the law impacting

public-private depot workload allocation requirements contained in the

fiscal year 1998 Defense Authorization Act, approved November 18, 1997.

This act contains an amendment to 10 U.S.C. 2466 mandating annual

reports of public and private sector workload allocations. It also contains

a new section 2460 of title 10, which specifies the kinds of work DOD is to

include within the definition of depot-level maintenance. This will impact

DOD’s future quantifications of public and private sector workload

allocations. These changes address several workload reporting issues

raised in this report. DOD’s first report to be submitted to Congress by

February 1, 1998, is to include information on public and private sector

depot-level maintenance spending for fiscal year 1997.

4

The data reported by the defense components represents obligation data for fiscal year 1996 and

planned funding for fiscal years 1997-2002. Hereafter in this report we refer to this information as

funding data.

5

The Maintenance Council provides a mechanism for senior military leaders to jointly plan, monitor,

and evaluate depot maintenance policies, programs, and activities.

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Results in Brief DOD’s May 1997 report of public and private sector depot maintenance

workload distribution for fiscal years 1996 through 2002 did not provide a

complete, consistent, and accurate assessment of DOD’s public and private

sector funding. Vague OSD guidance and incomplete and inconsistent

reporting of data by the military departments and defense agencies

contributed to this condition.

The workload distribution analysis showed that in fiscal year 1996 DOD

provided funding of $7.1 billion for work assigned to public sector

facilities and about $3.4 billion for work assigned to the private sector. In

addition, DOD’s analysis shows that DOD provided an additional $706 million

for depot maintenance-related work acquired from the private sector

through interim contractor support and contractor logistics support

arrangements.

Our review of DOD’s depot maintenance workload distribution and

supporting data shows that

• in some cases modification and conversion work obtained from private

sector contractors was not reported but similar work in public depots was

included;

• reporting of computer software maintenance work was inconsistent and

perhaps incomplete;

• public sector depot maintenance funding included substantial

expenditures for goods and services purchased from private sector

contractors, and resulted in inconsistent reporting of the allocation

between the public and private sector; and

• depot maintenance expenditures for equipment and software owned by

various defense agencies were not reported.

DOD’s Analysis of

Workload Distribution

DOD’s analysis of depot maintenance workload distribution showed that it

provided funding of about $10.5 billion for depot maintenance

requirements in fiscal year 1996, of which workload valued at $7.1 billion,

or 68 percent, was assigned to public sector facilities and about $3.4

billion, or 32 percent, was assigned to the private sector. In addition, DOD’s

data showed that it provided an additional $706 million for work acquired

from the private sector through interim contractor support (ICS) and

contractor logistics support (CLS) contracts. At the time of our review, the

law did not specifically state whether such contractor-provided

maintenance should be considered in 60/40 calculations. The recently

passed provisions at 10 U.S.C. 2460 would establish a statutory definition

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of depot-level maintenance and repair. Among other things, it specifies

that both ICS and CLS are to be included within the definition. As a result

both ICS and CLS must be included in private sector workload calculations

required under the newly amended provision of 10 U.S.C. 2466.

DOD’s Analysis Shows

Impact of ICS/CLS Funding

According to the data in DOD’s analysis, Army and Navy depot maintenance

funding provided to the private sector will not exceed 40 percent in any

year from fiscal year 1996 to 2002, whether or not ICS and CLS are included.

The percentage of Air Force depot maintenance funding provided to the

private sector will vary considerably depending on the outcome of planned

public and private sector workload competitions.6

 In September 1997, the

Air Force announced that Warner Robins Air Logistics Center won a

public-private competition for the C-5 aircraft depot-level workload.

Should the private sector win the remaining competitions, DOD data shows

that its share will only exceed 40-percent when ICS and CLS costs are

included.

The percentage of public and private sector depot maintenance work

reported by the military departments for fiscal years 1996 through 2002

and the potential impact of including ICS and CLS funding in the private

sector workload distribution are shown in table 1. For the Air Force, the

table provides percentage allocations for two scenarios. The first scenario

assumes that public depots win all ongoing public-private workload

competitions, and the second reflects that the public sector wins the C-5

workload and that the private sector wins all others.

6

These competitions are being conducted to determine the most cost-effective means for transitioning

workloads currently performed by government employees assigned to the Sacramento and San

Antonio Air Logistics Centers, facilities recommended for closure by the 1995 Base Realignment and

Closure Commission.

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Table 1: Public and Private Workload Mix as Quantified by OSDa

Dollars in millions

FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02

Army:

Public $ 838 810 888 763 993 918 999

Private $ 403 482 429 442 460 425 464

ICS/CLS $ 73 49 51 57 58 56 51

Public/private % 68/32 63/37 67/33 63/37 68/32 68/32 68/32

Public/private % (with

ICS/CLS)

64/36 60/40 65/35 60/40 66/34 66/34 66/34

Navy: (includes Marines)

Public $ 3,460 3,662 3,796 3,770 3,959 3,743 4,220

Private $ 1,886 2,047 1,858 2,121 2,186 2,190 2,204

ICS/CLS $ 33 45 49 52 52 52 52

Public/private % 65/35 64/36 67/33 64/36 64/36 63/37 66/34

Public/private % (with

ICS/CLS)

64/36 64/36 67/33 63/37 64/36 63/37 65/35

Air Force:

(Public wins all)

Public $ 2,828 2,678 3,174 3,011 3,122 3,036 3,068

Private $ 1,128 1,122 1,262 1,199 1,242 1,301 1,315

ICS/CLS $ 600 537 582 534 550 582 550

Public/private % 71/29 70/30 72/28 72/28 72/28 70/30 70/30

Public/private % (with

ICS/CLS)

62/38 62/38 63/37 63/37 64/36 62/38 62/38

(Public wins C-5; private wins others)

Public $ 2,828 2,678 2,923 2,768 2,882 2,798 2,832

Private $ 1,128 1,122 1,513 1,442 1,482 1,539 1,551

ICS/CLS $ 600 537 582 534 550 582 550

Public/private % 71/29 70/30 66/34 66/34 66/34 65/35 65/35

Public/private % (with

ICS/CLS)

62/38 62/38 58/42 58/42 59/41 57/42 57/43

aThe above information was developed by the military departments. As discussed on the

following pages, we found that the workload allocation data does not provide a complete,

consistent, and accurate assessment of DOD’s public and private sector depot-level

maintenance funding.

Source: OSD.

The Deputy Under Secretary’s January 1997 request for data on depot

maintenance funding required that the military departments develop

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supplemental information for certain maintenance-related funding

obtained through ICS contracts, CLS contracts, and other innovative

logistics support arrangements. OSD program officials told us they asked

the military departments to report these data separately because without

collection of these data, DOD would have no vehicle for determining the

impact on the public and private sector’s workload allocation.

Vague Guidance and

Inconsistent

Reporting Has

Resulted in

Inaccurate,

Inconsistent, and

Incomplete Workload

Distribution Data

DOD does not have accurate data on public and private sector workload

distributions. OSD’s January 1997 guidance to the military departments for

identifying and reporting public-private depot maintenance activities, and

workload distribution was vague and subject to interpretation.

Consequently, the military departments used what OSD officials described

as an ad hoc data collection process. As a result, workload distribution

data reported by the services was inconsistent and incomplete.

Vague Guidance and Ad

Hoc Procedures

DOD directives, regulations, and publications provide a broad working

definition for depot maintenance workloads, including the repairing,

rebuilding, and major overhaul of major end items, parts, assemblies and

subassemblies and limited manufacture of parts, technical support,

modifications, testing, reclamation, and computer software maintenance.

We found that the military departments’ efforts to accurately define and

quantify their depot maintenance workloads were complicated by vague

and conflicting supplemental OSD guidance. For example, the Deputy

Under Secretary’s January 1997 request for public and private sector depot

maintenance funding information states that 60/40 reporting (1) should

consider all depot maintenance work, irrespective of funding source, and

(2) should be based on only “maintenance and repair work,” while

modification work was to be considered “non-maintenance work.”

Our discussions with officials from the services and the defense agencies

showed that officials responsible for public-private workload data

collection and quantification differed on which defense activities and

components should be reporting, and which types of workloads should be

included. For example, service and defense agency officials stated that

guidance is unclear if repair and maintenance funding for items not

normally repaired in a traditional depot environment are to be included.

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These workloads include repair and maintenance funding of space

systems, medical equipment, computer hardware, and classified programs.

Inconsistent and

Incomplete Data Analysis

OSD has not established a uniform and consistent approach for collecting

and quantifying current and planned public and private sector depot

maintenance funding. As a result the military departments adopted an ad

hoc data collection process, relying on what they considered to be the best

available information and their interpretation of DOD reporting guidance.

Consequently, we found the data reported by the services and agencies to

be inaccurate, inconsistent, and incomplete.

Private Sector Funding for

Installing Modification and

Conversion Kits Not

Consistently Reported

Our review of pertinent DOD and military department regulations and

directives indicates that teardown, overhaul, and repair work

accomplished by public and private sector activities concurrent with

modification, conversion, and upgrade programs is included under DOD’s

broadly defined list of depot maintenance workload categories. However,

some military department officials responsible for workload allocation

data collection told us that OSD had advised them to include such work in

quantifying the portion of depot funds provided to the public sector but

suggested excluding similar funding from the private sector workload

quantification. The military departments spend over a billion dollars

annually to install modification kits to upgrade and modernize existing

weapon systems in the private sector.

Due to the ad hoc nature of the data collection process, each of the

military departments treated modification, conversion, and upgrade

projects differently. For example, the Air Force and the Naval Air Systems

Command included funding for installing modification kits provided

through procurement appropriations in their quantifications of both the

public and private sector workload allocations, while the Naval Sea

Systems Command for fleet modernization programs included such

funding in public sector expenditures but excluded them for programs

performed by private sector activities. The Army excluded such funding

for modification programs accomplished by both public and private sector

activities.

Adding the funding for teardown, overhaul, repair, and installation of

modification and conversion kits in the Army’s workload mix calculations

could show as much as 60 percent of the available fiscal year 1996 depot

maintenance funding going to the private sector, rather than the 

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32 percent the Army reported. For example, audit work being conducted

by the Army Audit Agency shows that funding for installing modification

and upgrade hardware on two major modification efforts—the M1 Abrams

upgrade and Apache Longbow conversion programs—could total more

than $700 million in fiscal year 1996, with most work being done by private

sector activities.

Army program officials told us they excluded funding for teardown,

overhaul, and repair work involved with modification and conversion

programs from 60/40 reporting because (1) they interpreted the 60/40

statute to only address work funded by the operations and maintenance

appropriation and (2) OSD data collection guidelines specifically state that

modification and conversion work was to be considered 

“non-maintenance” work for purposes of 60/40 reporting. In commenting

on a draft of this report, Army officials stated that procurement

appropriation funded modification and conversion work was not

considered for 60/40 reporting because the data was not readily available.

However, they indicated that this reporting deficiency would be corrected

for future quantifications of public and private sector workload data.

Reported Software

Maintenance Funds Are

Inconsistent and

Incomplete

DOD directives and regulations specify that depot maintenance includes all

aspects of software maintenance; however, DOD has not clearly defined the

kinds of software maintenance work that should be quantified and

considered in its 60/40 reports. Our work shows that the military

departments reported some software maintenance support funding when

they were readily identifiable but excluded others. The value of the

excluded software maintenance workloads could exceed $1 billion. For

example:

• The Air Force’s analysis included software maintenance support funding

for workloads funded by the Air Force Materiel Command but excluded

most software maintenance funding for the Centralized Integration

Support Facility in Colorado Springs, Colorado, a facility funded by the Air

Force Space Command. Air Force officials acknowledged that funds for

this activity should have been included in its workload analysis and stated

that this deficiency will be corrected in future reports.

• The Navy’s analysis included software maintenance support costs for

workloads funded through traditional depot facilities, including naval

aviation depots, naval shipyards, or Marine Corps logistics centers, using

operational and maintenance appropriation funding. However, software

support obtained with procurement funding was not included. For

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example, the Marine Corps did not report funding for software

maintenance work performed by an approximate 300-person support

center located at Camp Pendleton, California, which reports to the Marine

Corps Systems Command—an organization not traditionally recognized as

being a provider of depot maintenance support.

We also found that when software work was included in the 60/40 report,

the public sector workload quantification included funding for work being

accomplished by private sector personnel assigned to work on

government-owned and -operated installations. For example, our work

showed that the Army’s analysis included $37.7 million under the public

sector for software support workloads assigned to the Communications

and Electronics Command, Fort Monmouth, New Jersey; the Tank

Automotive Command, Warren, Michigan; and the Aviation and Missile

Command, Redstone Arsenal, Alabama; even though 734 of the 1,150

software specialists at these locations are private sector employees. In

addition the Army’s analysis included $97.4 million under the private

sector share for software maintenance workloads assigned directly to

private sector contractors.

In discussing a draft of this report, DOD stated that only depot-level

software maintenance was to be included in public-private workload

allocation reports. As stated previously, the distinction between the

depot-level and lower levels of maintenance has become less pronounced.

Subsequent to DOD’s response, in December 1997 the Deputy Under

Secretary of Defense (Logistics) issued a memorandum to more clearly

define depot-level software maintenance.

Inconsistent Reporting of

Transportation Command

Equipment

The U.S. Transportation Command, which has principal components

including the Military Traffic Management Command, the Air Mobility

Command, and the Military Sealift Command, was not specifically tasked

by OSD to develop public and private sector depot maintenance funding

information. We found that the Air Force’s analysis of fiscal year 1996

depot maintenance funding included $295 million for support of the Air

Mobility Command aircraft. Military Sealift Command officials told us they

provided funding of about $83.5 million in fiscal year 1996 for

maintenance-related activities, but the portion of the funding attributable

to depot-level maintenance was not included in the Navy’s workload

allocation analysis. Military Sealift Command officials told us they could

not readily determine the public and private sector distribution of

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maintenance workloads but indicated that most services were obtained

from private contractors.

Reported Public Sector

Expenditures Include

Outlays to Private Sector

Our work also shows that a substantial portion of the funds provided to

public depots is ultimately contracted out to the private sector for parts,

materials, and labor. OSD’s guidance mentions that public sector depots

typically obtain support directly from the private sector for items such as

raw materials, replacement parts, and personnel services, but it provides

no direction as to how these items should be treated in computing the

public and private sector workload mix. This results in inconsistent

reporting that overstates the public sector share and understates the

private sector share. For example, parts purchased from the private sector

and furnished to private sector contractors as government-furnished

material are sometimes counted as a public sector cost. An Army official

told us that about 40 percent of the total fiscal year 1996 funding provided

to the Army’s five public sector depots will be used to purchase materials,

supplies, and services from private sector contractors. In addition, the

Army’s major depots currently have 181 contractor-employed artisans,

working with government employees, and these costs were included for

reporting purposes as public sector funding. In commenting on a draft of

this report, DOD officials noted that there is nothing in the legislative

history indicating how parts, material, and labor costs are to be counted

for the 60/40 requirement.

Some Agencies Do Not

Report Depot Maintenance

Workload Data

The 60/40 statute applies to the military departments and defense agencies

receiving depot maintenance funds; however, OSD only asked the three

military departments and the Defense Logistics Agency to report on its

current and planned public and private sector depot maintenance funding.7

Our limited review showed that several defense agencies received funding

for depot-level maintenance and that some received a substantial amount

of their depot maintenance support from private sector contractors. For

example:

• Officials from the National Security Agency told us they received funding

of about $15 million per year to maintain equipment and about $83 million

per year to maintain computer software. The agency employs a full-time

staff of federal and nonfederal employees to repair equipment on-site and

if equipment can not be fixed in-house it is discarded. Officials also told us

7

The Defense Logistics Agency reported that in fiscal year 1996 it spent $13 million for depot

maintenance work on equipment owned by the services.

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the agency employs a substantial number of computer software

specialists, who develop and maintain computer software programs.

• Officials from the National Imagery and Mapping Agency told us their

depot maintenance budgets for fiscal years 1996 and 1997 averaged about

$85 million for each year, of which about 90 percent was attributable to

private sector support.

• Officials from the Defense Intelligence Agency did not report any

depot-level maintenance. It reported that the Air Force is the executive

agent and maintains the Imagery Exploitation Support System, which

involves complex computer programs. However, neither the Air Force nor

the Defense Intelligence Agency reported the funding for maintaining this

software.

In discussing a draft of this report, DOD stated that some of the previously

described maintenance funding for the defense agencies may have been

for other than depot-level maintenance support. However, they stated that

they would clarify these uncertainties before the next reporting cycle.

Subsequently, in December 1997 the Deputy Under Secretary of Defense

(Logistics) asked each of the aforementioned defense agencies to provide

public and private sector depot maintenance spending data for the fiscal

year 1997 reporting cycle.

Navy Workload at

Louisville Depot Not

Completely Reported

The Navy collected planned depot maintenance funding for the newly

privatized Louisville depot, but due to the ad hoc nature of the data

collection process, funding totaling $70 million for fiscal years 1997, 1998,

and 1999 was excluded from the Navy’s quantification of private sector

depot maintenance data. Navy officials told us the funding projections for

Louisville were not readily available when the current 60/40 report was

developed for OSD. They stated that future reporting will include funding

information for the Louisville facility under the private sector share.

Conclusion DOD’s current approach for collecting information on the allocation of

depot maintenance workload between the public and private sectors

results in incomplete and inconsistent reporting. This is because the

guidance provided to the military departments is imprecise, leaving room

for varying interpretations on the data to be reported. Further, it appears

that a number of defense components that perform depot maintenance

were not included in the data collection effort. Given these conditions,

DOD, while reporting that about 68 percent of its depot maintenance is

performed by the public sector, does not have complete, consistent, and

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accurate information on this public/private sector workload distribution. If

DOD’s analysis of its compliance with 10 U.S.C. 2466 is to be meaningful,

improvements are needed in the data collection and reporting process.

Recommendation To improve the accuracy of reporting on the amount of funding for depot

maintenance in the public and private sectors, we recommend that the

Secretary of Defense develop a standardized methodology for annually

collecting depot maintenance funding data for the public and private

sectors. This should include (1) a specific definition of the types of

activities to be reported, (2) the defense components that should be

reporting, and (3) specific data collection processes and procedures the

military departments are to follow to insure complete, accurate, and

consistent reporting of the amount of funding provided for public and

private sector depot maintenance workloads.

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

findings and recommendations. We made technical corrections in several

areas to address their comments. DOD’s response is included in appendix I.

Subsequent to DOD’s response, the Deputy Under Secretary of Defense

(Logistics), in a memorandum dated December 5, 1997, established an

annual process for reporting public and private sector maintenance costs

as required by the fiscal year 1998 Defense Authorization Act, which

amended 10 U.S.C. 2466. The Secretary’s memorandum also provided new

guidance to more clearly define the types of workloads that are to be

included in future workload allocation reports, and the defense

components that should be reporting. This should lead to more accurate

and consistent reporting of public and private sector workload allocations.

Scope and

Methodology

We reviewed OSD’s analysis of public and private sector depot maintenance

workload distribution and accompanying reports prepared by the Army,

the Navy, the Marine Corps, the Air Force, and the Defense Logistics

Agency. We also reviewed pertinent DOD, OSD, and military department

directives, regulations, and publications to determine how DOD, OSD, and

the military departments define depot maintenance work. We drew

extensively from our prior work concerning the public and private sector

workload mix. We also reviewed preliminary results of ongoing audit work

being conducted by the U.S. Army Audit Agency and a study of depot

maintenance software activities being conducted by the Logistics

Management Institute.

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From each of the military departments and OSD, we obtained and reviewed

pertinent correspondence and back-up documentation supporting OSD’s

public and private sector workload report. Back-up documentation

included budget exhibits, computerized worksheets, and summary reports.

We did not independently assess the accuracy of the data contained in

back-up documentation. We interviewed officials and examined

documents at OSD, Army, Navy, Marine Corps, and Air Force headquarters,

Washington, D.C.; the Army Materiel Command, Alexandria, Virginia; the

Air Force Materiel Command, Dayton, Ohio; the Naval Sea and Air

Systems Commands, Arlington, Virginia; and the National Security Agency,

Fort Meade, Maryland.

To determine if defense agencies and organizations received depot

maintenance funds that were not included in OSD’s analysis of public and

private sector depot maintenance workload distribution, we selected

several defense agencies and nontraditional depot maintenance

commands. At the selected agencies and commands, we interviewed

officials to determine the extent of maintenance funding received and the

distribution between the public and private sectors. These activities

included the U.S. Transportation Command, the Military Traffic

Management Command, the Air Mobility Command, the Military Sealift

Command, the National Security Agency, the Defense Intelligence Agency,

and the National Imagery and Mapping Agency.

We conducted our review from May to August 1997, and except where

noted, in accordance with generally accepted government auditing

standards.

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

Army, the Navy, and the Air Force; the Directors of the Defense Logistics

Agency, National Security Agency, Defense Special Weapons Agency,

National Imagery and Mapping Agency, and Defense Intelligence Agency;

and the Commander, U. S. Transportation Command. Copies will be made

available to others upon request.

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

concerning this report. Major contributors to this report were Julia

Denman, Glenn Knoepfle, and David Epstein from the National Security

and International Affairs Division and John Brosnan from the Office of

General Counsel.

David R. Warren

Director, Defense Management Issues

Page 15 GAO/NSIAD-98-41 Defense Depot Maintenance
B-277291 

List of Requesters

The Honorable James M. Inhofe

The Honorable Charles S. Robb

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 16 GAO/NSIAD-98-41 Defense Depot Maintenance
Page 17 GAO/NSIAD-98-41 Defense Depot Maintenance
Appendix I 

Comments From the Department of Defense

(709267) Page 18 GAO/NSIAD-98-41 Defense Depot Maintenance
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