Report to the Ranking Minority 

Member, Subcommittee on Readiness, 

Committee on Armed Services, House 

of Representatives 

United States General Accounting Office 

GAO 

July 2003 DEPOT 

MAINTENANCE 

Key Unresolved Issues 

Affect the Army Depot 

System’s Viability 

GAO-03-682 
The work assigned to Army maintenance depots has declined by 36 percent, 

although the cost of the Army’s total maintenance program has increased 

since fiscal year 1987. Except for fiscal year 2003, projections for future 

work in the depots through fiscal 2008 show further decline. Depot work 

also changed from predominately overhauling Army end items to the 

increased repair of components. In addition, work from non-Army customers 

has increased from 6 to 26 percent. Army component and recapitalization 

work is projected to be the majority of depot work in the future. Depot 

planners generally do not have reliable projections of work requirements for 

non-Army customers. Because of this and other factors, including changing 

conditions, future projections have limitations. Potential increases in depot 

work resulting from the Iraq war are not yet clear. 

Various factors, including workload reductions and workload performance 

issues, have resulted in efficiency and productivity problems in Army depots. 

Such initiatives as facility and equipment rightsizing, depot maintenance 

partnerships, and “lean manufacturing” have been implemented. Trends in 

two metricscapacity utilization and employee productivityshow that, 

while more needs to be done, efficiency and productivity improvements have 

been made. Additional workloads, particularly for new and upgraded 

systems, are essential for future depot viability. However, in the past most 

new work has gone to private contractors. Some new-systems work is being 

explored for depots, and depot managers believe that partnering with the 

private sector may be the best chance for getting such work. 

The Army has not identified its depots’ core capability requirements using a 

revised DOD methodology meant to overcome weaknesses in the core 

process. At the same time, it is unclear whether the revised methodology, 

which is undergoing further changes, will correct weaknesses in the core 

process. Moreover, no one in the Army assesses the extent to which depot 

work compares with identified core capability requirements. Depot 

managers are concerned about the loss of work and the failure to obtain 

work necessary to support core capabilities. 

The Army does not have a comprehensive and current strategic plan for the 

depots and has not implemented the limited plan it developed. GAO 

concluded in a 1998 report that the Army had inadequate long-range plans 

for its depots and that such planning is essential if significant progress is to 

be made in addressing the complex, systemic problems facing the depots. 

Despite the time that has passed, the same issues remain. DOD has not 

implemented a comprehensive and current plan for resolving continuing 

issues about (1) reduced workloads being assigned to Army maintenance 

depots and (2) deficiencies in the process of quantifying both core depot 

maintenance capabilities and the workload needed to ensure cost 

efficiency and technical competence and to preserve surge capability. 

Without such a plan, the long-term viability of Army depots is uncertain. 

The Army’s five maintenance 

depots produced work valued at 

$1.5 billion in fiscal year 2002, with 

the remaining 49 percent of the 

Army’s depot work performed by 

contractors. GAO was asked to 

assess (1) the trends in and the 

reliability of depot workload 

projections; (2) whether workloads 

are sufficient for efficient depot 

operations, initiatives are under 

way to improve efficiency, and 

additional workloads are possible; 

(3) whether the Army has identified 

depots’ core capability and 

provided workload to support that 

capability; and (4) whether the 

Army has a long-range plan for a 

viable, efficient depot system. 

GAO makes two recommendations 

to improve the reliability of 

workload projections from Army 

and other service acquisition 

communities and from inter-service 

customers. GAO previously 

reported on the need for improving 

the process for identifying core 

capabilities and improving strategic 

and workforce planning. Without 

improvements in these areas, the 

future viability of Army depots is 

questionable. In commenting on a 

draft of this report, DOD concurred 

in part with our recommendations 

to improve workload projections 

for Army depots, but stated that 

needed actions involved more than 

the Army. GAO revised the two 

draft report recommendations to 

address the broader need of 

improving projections of interservice work for all the services. 

www.gao.gov/cgi-bin/getrpt?GAO-03-682.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Barry W. 

Holman at (202) 512-8412 or 

holmanb@gao.gov. 

Highlights of GAO-03-682, a report to 

Ranking Minority Member, Subcommittee 

on Readiness, Committee on Armed 

Services, House of Representatives 

July 2003 

DEPOT MAINTENANCE

Key Unresolved Issues Affect the Army 

Depot System’s Viability 
Page i GAO-03-682 Army Depot Maintenance 

Letter 1

Results in Brief 2

Background 3

Trends in Historical and Future Workloads and Reliability of 

Future Projections 6

Workload Efficiency and Sufficiency Issues 12

Core Capability Issues 20

Strategic Planning Issues for Depots 24

Conclusions 26

Recommendations for Executive Action 26

Agency Comments and Our Evaluation 27

Appendix I Scope and Methodology 29 

Appendix II Comments from the Department of Defense 31 

Tables 

Table 1: Army Depot Workload, Workload Value, and Civilian 

Employees in Fiscal Year 2002 5

Table 2: Depot Capacity Utilization for Fiscal Years 1999-2002 16

Table 3: Employee Productivity for Fiscal Years 1999-2002 17

Table 4: Comparison of Core Capability and Its Associated 

Workload with Actual Work Performed for Fiscal Years 

1999-2002 22

Figures 

Figure 1: Location of the Five Army Maintenance Depots 4

Figure 2: Dollar Value for the Total Army Maintenance Programs, 

Fiscal Years 1987-2002 7

Figure 3: Total Number of Hours for Maintenance Programs 

Completed in Army Depots, Fiscal Years1987-2002 8

Figure 4: Corpus Christi T700 Engine Repair Line 15

Contents 
Page ii GAO-03-682 Army Depot Maintenance 

This is a work of the U.S. Government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. It may contain copyrighted graphics, images or other materials. 

Permission from the copyright holder may be necessary should you wish to reproduce 

copyrighted materials separately from GAO’s product. 
Page 1 GAO-03-682 Army Depot Maintenance 

July 7, 2003 

The Honorable Solomon P. Ortiz 

Ranking Minority Member 

Subcommittee on Readiness 

Committee on Armed Services 

House of Representatives 

Dear Mr. Ortiz: 

Army maintenance depots were established to support Army fighting units 

by providing repair and manufacturing capability, in concert with the 

private sector, to meet peacetime and contingency operational 

requirements. In recent years, we have identified deficiencies in the 

Department of Defense’s (DOD) planning for depot maintenance 

operations. For example, in 1998 we reported, “Uncertainties exist about 

the future of the Army’s depots and arsenals and the extent to which the 

functions they perform should be retained as government-owned and 

-operated facilities or performed by private sector contractors.”1

 We also 

said that recent experiences at the Army’s maintenance depots and 

arsenals indicate that the Army is facing multiple, difficult challenges and 

uncertainties in determining staffing requirements and in improving the 

efficiency and effectiveness of its industrial activities. We pointed out that 

uncertainties about the workload to be assigned to these facilities was a 

critical factor that needed to be addressed, and we recommended that the 

Secretary of the Army develop and issue a long-range plan for maximizing 

the efficient use of depots and arsenals. 

You requested that we review the following Army depot maintenance 

issues: 

• What are the trends in historical and future maintenance workloads 

assigned to the depots, and are future projections reliable? 

• Do the depots have sufficient workload to promote efficient maintenance 

operations, are initiatives being implemented to improve efficiency, and 

are additional workloads possible? 

 1

 See U.S. General Accounting Office, Army Industrial Facilities: Workforce Requirements 

and Related Issues Affecting Depots and Arsenals, GAO/NSIAD-99-31 (Washington, D.C.: 

Nov. 30, 1998). 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-03-682 Army Depot Maintenance 

• Has the Army identified the depots’ core capability requirements and 

provided its depots with workload needed to ensure cost efficiency and 

technical competence? 

• Does the Army have a long-range plan for the future viability of an efficient 

depot system? 

We briefed your office on the preliminary results of our work on April 7, 

2003. This report summarizes and updates the information presented at 

that briefing. The scope and methodology for our work are discussed in 

appendix I. We conducted our review from September 2002 through June 

2003 in accordance with generally accepted government auditing 

standards. 

Work performed in Army depots declined by 36 percent from fiscal year 

1987 through fiscal year 2002, while the total depot maintenance program 

grew. With the exception of fiscal year 2003which has seen increased 

work, some of which is resulting from the Iraqi conflictfuture workload 

projections indicate further decline in the work to be performed in military 

depots, but the full impact of the Iraq conflict on future depot workload is 

not yet known. Although future workload projections are important tools 

for managing depot operations, they have limitations because some inputs 

are not reliable and because operational and budget conditions change. 

However, opportunities exist for improving future estimates. 

A number of factors, including the decline in workload performed in Army 

depots and changes in the type of work, have led to inefficient operations. 

Initiatives have been implemented to improve depot efficiency and 

productivity; and trends in two metricscapacity utilization and 

employee productivityshow that improvements have been made. 

Additional workloads could play a key role in further improving the 

cost-effectiveness of the Army depots, but other issues must also be 

addressed. Nonetheless, without new work, the depots cannot continue to 

be viable. While some new work is being explored, little work for new or 

upgraded systems is going to the depots. 

The Army has not yet identified current core capability requirements that 

are based on a new methodology put forth by the Office of the Secretary of 

Defense in January 2003. Moreover, the new methodology has continued 

to be revised and has not yet been finalized. In the past, the Army has not 

routinely assessed whether assigned workloads were adequate for its 

depots to ensure cost efficiency and technical competence and to preserve 

surge capability. Furthermore, Army depots do not have sufficient 

Results in Brief 
Page 3 GAO-03-682 Army Depot Maintenance 

workload to ensure they can either sustain or establish identified core 

capabilities. 

Neither the Office of the Secretary of Defense nor the Army has a 

comprehensive and current depot maintenance strategic plan, which is an 

essential aspect of ensuring future depot efficiency and viability. We 

previously recommended that a strategic plan for DOD-owned depots be 

developed,2

 but the Office of the Secretary of Defense has not done so, and 

the Army’s depot plan is neither current nor comprehensive and has not 

been implemented. Without the implementation of an effective plan to 

provide a vision for resolving past problems with the depot system, 

continuing issues about (1) reduced workloads being assigned to Army 

maintenance depots and (2) deficiencies in the process of quantifying both 

core depot maintenance capabilities and the workload needed to ensure 

cost efficiency and technical competence and to preserve surge capability 

raise significant questions about the long-term viability of Army depots. 

We are making two new recommendations to improve the quality of 

maintenance workload projections, and we continue to believe that DOD’s 

implementation of our prior recommendations is essential for maintaining 

a viable Army depot system in the future. In commenting on a draft of this 

report, DOD partially concurred with the two recommendations in our 

draft report. The Department’s response stated that the lack of workload 

projection data for inter-service depot workloads should be addressed 

across all the military services. We modified the two recommendations in 

the draft report to respond to the Department’s comments. 

The Army maintains maintenance depots for overhauling, upgrading, and 

maintaining missiles, combat vehicles, tactical vehicles, and 

communication and electronic equipment for the Army, other military 

services, and foreign countries. These depots, which were established 

from 1941 through 1961, repair end itemssuch as ground combat 

systems, communication systems, and helicoptersand reparable 

secondary itemsvarious assemblies and subassemblies of major end 

items, including helicopter rotor blades, circuit cards, pumps, 

 2

 See U.S. General Accounting Office, Defense Logistics: Actions Needed to Overcome 

Capability Gaps in the Public Depot System, GAO-02-105 (Washington, D.C.: Oct. 12, 

2001). 

Background 
Page 4 GAO-03-682 Army Depot Maintenance 

transmissions, and thousands of other components.3 The number of these 

facilities has been reduced from 10 in 1976 to the existing 5 as of June 

2003, and 2 of the remaining 5 were significantly downsized and realigned 

as a result of implementing the 1995 Base Realignment and Closure 

(BRAC) decisions. Figure 1 shows the locations of the remaining five 

Army maintenance depots. 

Figure 1: Location of the Five Army Maintenance Depots 

 3

 Several of the depots also do some manufacturing but generally for small quantities of 

individual items needed in support of depot overhaul and repair programs. 
Page 5 GAO-03-682 Army Depot Maintenance 

In fiscal year 2002, the depots reported that the total value of work 

performed was $1.5 billion. In a separate report on the distribution of 

depot maintenance funds between the public and private sector, the Army 

stated that DOD employees performed about 51 percent of the work 

included in the Army’s fiscal year 2002 depot maintenance program. 

Table 1 provides the name and location of each of the five Army depots, 

the primary work performed in each, the hours of work performed in fiscal 

year 2002, the value of that work, and the number of civilian personnel 

employed at each depot in fiscal year 2002. 

Table 1: Army Depot Workload, Workload Value, and Civilian Employees in Fiscal Year 2002 

Depot Principal work 

FY 2002 

workloada,b

FY 2002 

value of 

workload 

executedc,d

FY 2002 

number of 

civilian depot 

employees

Anniston Army 

Depot, Anniston, 

Alabama 

This depot performs maintenance on heavy- and lighttracked combat vehicles and components and is the 

designated center of technical excellence for the M1 Abrams 

tank. 2.5 $421.6 2,429

Corpus Christi Army 

Depot, Corpus 

Christi, Texas 

As the Army’s only aviation facility, the depot overhauls and 

repairs DOD rotary wing aircraft and components, such as 

the AH-64 Apache, CH-47 Chinook, and UH-60 Blackhawk. 2.9 $500.2 2,869

Letterkenny Army 

Depot, 

Chambersburg, 

Pennsylvania 

This depot provides repair and overhaul support for air 

defense and tactical missiles such as the Patriot, Hawk, 

Avenger, Multiple Launch Rocket System, and Sidewinder. 

0.9 $108.0 1,082

Red River Army 

Depot, Texarkana, 

Texas 

For combat and tactical systems, the depot supports 

systems such as the Bradley Fighting Vehicle, Multiple 

Launch Rocket System, and vehicles for the Patriot and 

Hawk missiles. 1.2 $236.7 1,478

Tobyhanna Army 

Depot, Tobyhanna, 

Pennsylvania 

From handheld radios to satellite communication, the depot 

provides repair of or overhaul support for hundreds of 

communications and electronic systems. 2.6 $251.3 2,237

Sources: U.S. Army data (data); GAO (presentation). 

a

 Maintenance mission direct labor hours not including overtime. 

b Hours in millions. 

c Value of the workload executed for all customers, or total revenue. 

d

 Dollars in millions. 
Page 6 GAO-03-682 Army Depot Maintenance 

Depot maintenance work performed in Army depots has declined 

significantly since fiscal year 1987. However, the total depot maintenance 

program, of which the work assigned to the depots is a part, has grown in 

dollar value by 72 percent from $1.55 billion to $2.66 billion over that 

period. The decline in the amount of work performed in Army depots 

reflects the downsizing in the number of systems that followed the end of 

the Cold War, the trend toward greater reliance on the private sector, and 

the use of regional repair activities at Army active installations and Army 

National Guard activities for depot-level maintenance. 

The type of work performed in the depots also changed from fiscal year 

1987 through fiscal year 2002. While workloads were once predominately 

the overhaul of Army end items, the percentage of work for non-Army 

customers4

 and for repair of Army secondary items has increased over the 

last 16 years. Projections of future work indicate further decline, except 

that 2003 is likely to have a slight increase at least partially because of 

support for Operation Iraqi Freedom (the recently completed conflict in 

Iraq). The extent to which Operation Iraqi Freedom will result in increases 

in future years is not clear. Future projections may not be a reliable 

indicator, since they change with changing conditions. The reliability of 

the estimates decreases with an increase in the projection beyond the 

current year. 

Comparing the amount of maintenance work accomplished in the Army 

depots with the Army’s total maintenance program shows that the total 

program has increased, while the amount of work assigned to the depots 

has declined. Figure 2 shows the dollar value of the total Army depot 

maintenance program from fiscal year 1987 through fiscal year 2002. The 

dollar value of the total Army depot maintenance program grew by 

72 percent from fiscal year 1987 through fiscal year 2002.5

 4

 For our analyses, non-Army customers include the Air Force, Navy, Marine Corps, 

Defense Logistics Agency, foreign militaries, and unspecified DOD and non-DOD agencies. 

5

 For our analysis, we characterized the total maintenance program by dollar value since 

the private sector does not report the work it does in terms of the amount of time spent. 

Trends in Historical 

and Future Workloads 

and Reliability of 

Future Projections 

Dollar and Labor Hour 

Trends 
Page 7 GAO-03-682 Army Depot Maintenance 

Figure 2: Dollar Value for the Total Army Maintenance Programs, Fiscal Years 1987-

2002 

As reflected in figure 3 the labor hours for maintenance programs 

completed in each of the fiscal years from 1987 to 2002 at the five current 

Army depots show a significant overall decline in work during much of 

this period, with a slight upturn from fiscal year 2000 to fiscal year 2002. 

The total number of hours for depot maintenance programs completed in 

Army depots in fiscal year 2002 was 11.0 million—-36 percent less than the 

17.3 million hours for maintenance programs completed in fiscal year 

1987. 
Page 8 GAO-03-682 Army Depot Maintenance 

Figure 3: Total Number of Hours for Maintenance Programs Completed in Army 

Depots, Fiscal Years 1987-2002 

Figure 3 indicates that in fiscal year 2000, the number of hours for 

maintenance programs completed in Army depots were the lowest since 

1987. In fiscal year 1999, the Army completed the transfer of operational 

command and control of Army depots to the depots’ major customers, the 

Army Materiel Command’s (AMC) subordinate commands,6

 which are also 

 6

 The Army Tank-automotive and Armaments Command manages the Anniston and Red 

River depots; the Army Aviation and Missile Command manages the Corpus Christi and 

Letterkenny depots; and the Army Communications-Electronics Command manages the 

Tobyhanna depot. 
Page 9 GAO-03-682 Army Depot Maintenance 

the coordinating inventory control points for the depots’ products. In 

making these realignments, the Army has tasked AMC to pay more 

attention to the amount of work assigned to the depots, since these 

commands are now responsible for the depots’ budgets and operations. 

The type of work performed in Army depots has changed significantly 

from fiscal year 1987 through fiscal year 2002. While Army depot work in 

fiscal year 1987 predominately involved the overhaul of Army end items 

(such as tanks, helicopters, and wheeled vehicles), in fiscal year 2002, the 

percentage of work for repairing Army secondary items (reparable 

components such as engines, transmissions, and rotor blades) was greater 

than that for end item repair. Our analysis of the labor hours for 

maintenance programs completed in fiscal years 1987 through 2002 

showed that the overhaul of Army end items steadily decreased from 68 to 

26 percent of the total workload over that period, while the repair of Army 

secondary items increased from 4 to 31 percent of the workload total.7

In addition, the percentage of work performed for non-Army customers 

increased from fiscal year 1987 through fiscal year 2002 from 6 to 26 

percent of the total hours for maintenance programs completed in those 

years. At the Tobyhanna depot, which now has the largest amount of 

non-Army work, Air Force work accounted for only 4 percent of the hours 

of all maintenance programs completed at the depot from fiscal year 1987 

through fiscal year 1997. However, from fiscal year 1998 through fiscal 

year 2002, repair work on Air Force systems was 23 percent of the total 

amount of work completed at this depot. At Corpus Christi, labor hours 

for Navy work accounted for 9 percent of the hours for all programs 

completed from fiscal year 1987 through fiscal year 1995. The hours spent 

for Navy work grew to 22 percent of the hours for all programs completed 

from fiscal year 1996 through fiscal year 2002. However, since the Navy 

withdrew some of its helicopter work from Corpus Christi in fiscal year 

2003, that level of Navy work is not likely to continue unless new Navy 

workloads are designated for repair at Corpus Christi. At the Letterkenny 

depot, labor hours for foreign military sales accounted for 4 percent of the 

hours for all programs completed from fiscal year 1987 through fiscal year 

 7

 This analysis did not include all of the depots’ work, since the data we analyzed did not 

break out the repair category for non-Army customers and for a small amount of Army 

work. 

Workload Type and 

Customer Trends 
Page 10 GAO-03-682 Army Depot Maintenance 

1999. For fiscal years 2000 through 2002, foreign military sales work at that 

depot increased to 15 percent of the total hours of work completed. 

Workload projections suggest that in fiscal year 2003, the small upward 

trend begun in fiscal year 2001 will continue for another year, but another 

period of decline may occur from fiscal year 2004 through fiscal year 2008. 

Army component and recapitalization workload is projected to be the 

majority of the depots’ work. These projections are an April 2003 estimate 

from the Army Workload and Performance System (AWPS), an analytically 

based workload-forecasting system that projects future workloads and 

coordinates personnel requirements.8

 This projection includes some recent 

increases in prior estimates for fiscal year 2003 to reflect revised estimates 

for reparable components to support Operation Iraqi Freedom. Officials at 

several depots said they are working overtime and have hired some 

temporary employees to support this increased requirement, but an official 

at one depot said it is not likely to be able to produce the amount of work 

currently estimated for fiscal year 2003 in AWPS because it does not have 

enough people. Depot officials said they do not know if reconstitution9

requirements following Operation Iraqi Freedom will result in increases in 

depot workload in fiscal year 2004 and beyond, and AWPS does not reflect 

increases in the out-years resulting from Operation Iraqi Freedom. 

According to an AMC official, the Army does not yet have a plan for 

managing the reconstitution, but one is being developed. 

Army officials said and we have confirmed that out-year estimates are not 

always reliable predictors of the specific work that will be performed in a 

future year. These projections are only as good as the knowledge of the 

personnel preparing them about future requirements. As we have reported 

in the past, workload estimates for Army maintenance depots vary 

substantially over time owing to the reprogramming of operations and 

 8

 We reviewed the status of the AWPS development as required by the Congress. See U.S. 

General Accounting Office, Army Logistics: Report on Manpower and Workload System 

Inadequate and System Interface Untested, GAO-03-21 (Washington, D.C.: Oct. 30, 2002). 

9

 Reconstitution is the process, after a contingency/surge operation, of making a unit or 

activity available again for steady-state operational commitments. Reconstitution planning 

begins during the initial stages of surge operations, and actual reconstitution of the forces 

continues beyond the end of the contingency operation. Factors to be considered in 

reconstitution planning include the maintenance of equipment, restoring levels of 

consumables, lost training, an examination of the impact of operations on personnel and 

attrition rates, and post-contingency steady-state operational requirements. 

Workload Projections 
Page 11 GAO-03-682 Army Depot Maintenance 

maintenance appropriation funding and unanticipated changes in 

customer orders. Workload estimates are subject to much uncertainty and 

to frequent fluctuations with changing circumstances. For example, as 

previously noted, fiscal year 2003 requirements in AWPS have increased 

during the year as Operation Iraqi Freedom’s demands have generated 

more work than previously expected. On the other hand, reductions to 

future requirements frequently occur. For example, to fund other 

priorities, the Army has been considering reducing recapitalization work,10

which is forecasted to be about 29 percent of the depots’ future workload. 

Furthermore, the impact that reconstitution requirements could have on 

the Army depots following Operation Iraqi Freedom is unclear. 

Additionally, according to Army officials, AWPS does not receive actual 

programs planned for the out-years of all depot customers. Customers 

whose actual programs are entered into AWPS vary by subordinate 

command. Out-year workload for customers that are not based on actual 

programs must be estimated by the subordinate commands on the basis of 

past history and discussions with their customers about workload planned 

for the depots. Thus, these estimated workloads may not represent future 

workloads. Moreover, since work from other customers has become a 

much more substantial share of the total Army depot workload, the impact 

of these estimates’ accuracy will be more significant. 

Finally, future workloads that Army acquisition officials might have 

planned for the depots are difficult to identify, and AWPS will not 

accurately reflect these workloads unless acquisition officials provide the 

subordinate commands with such information. The Army acquisition 

community is primarily responsible for establishing future capability at the 

depots on the basis of the results of source-of-repair decisions and other 

factors such as core requirements. However, as discussed later, the 

amount of such work likely to be assigned to the depots is unclear. Army 

officials explained that the acquisition community does not enter these 

workloads into AWPS and that no central database exists of systems 

undergoing source-of-repair decisions to help the subordinate commands 

identify planned workloads and adjust AWPS projections accordingly.11

For these reasons, depot managers do not consider workload projections 

from AWPS reliable beyond 2 years, and they recognize that changes will 

occur even in the first 2 years. 

 10 Recapitalization is the rebuilding and upgrading of currently fielded systems to ensure 

operational effectiveness and a like-new condition. 

11 The Air Force has such a database. 
Page 12 GAO-03-682 Army Depot Maintenance 

As previously discussed, the reliability of out-year projections in AWPS is 

affected by a number of factors such as changing requirements, funding 

limitations, and the work that may be planned but has not been identified 

and included in AWPS. While requirements and funding changes are 

expected occurrences, the Army is faced with the possibility that 

incomplete projections in AWPS regarding the size of the direct labor 

force required in the future can occur. This is because the Army’s current 

capability to identify maintenance workloads that are being planned for its 

depots is limited. Specifically, officials stated that the Army has no 

standard business rules or procedures for identifying the work that the 

Army acquisition community and non-Army customers may be planning 

for Army depots. They said that, at best, the current process is a hit-ormiss situation, depending on how aggressive the Army commands are in 

requesting such customers to identify their forecasted workloads, if it is 

done at all. Moreover, an Army official told us that the Army does not have 

a mechanism in place to adjust these estimates when it becomes clear that 

such forecasts are inaccurate. Improvements in this area could increase 

the reliability of future depot workload projections, as well as depot 

planners’ ability to manage depot operations efficiently. In its comments 

on a draft of this report, DOD officials stated that the lack of workload 

projection data for inter-service depot workloads should be addressed 

across all the military servicesnot just at Army depots. Consequently the 

Department will initiate a study to examine how the identification and 

reporting of depot inter-service workload projections across all the 

military services can be improved. 

Army depots have had some efficiency problems, caused by several 

factors, including the loss of work to the private sector and field-level 

maintenance activities. Initiatives such as facility and equipment 

downsizing, depot partnerships, and “lean manufacturing” 12 have been 

implemented to address depot inefficiencies. Trends in two key metrics—

capacity utilization and employee productivity—-show that progress has 

been made in recent years, although further improvements are still 

desirable. Additional workloads could play a key role in further improving 

the cost-effectiveness of the Army depots, and acquiring work for new 

systems is essential for long-term depot viability. Whether new systems 

 12 Lean manufacturing is an industry best practice that is being implemented in the five 

Army depots. Lean manufacturing focuses on cutting costs while also shortening 

production lead times and time-to-market; improving quality; and providing customers with 

what they want, precisely when they want it. 

Workload Efficiency 

and Sufficiency Issues 
Page 13 GAO-03-682 Army Depot Maintenance 

work will be assigned to the depots is unclear, but depot officials believe 

that partnerships may offer the best potential for new systems work. 

Whether depot-level work that gravitated to field-level activities will return 

to the depots is also unclear. 

Depot maintenance operations have not been as efficient as Army depot 

managers would like them to be. This is, in part, due to a host of factors, 

including the impact of workload reductions, the changing nature of the 

work assigned, and workload performance issues such as less-thanexpected employee productivity and work slow-downs caused by a lack of 

required spare and repair parts or inefficient repair processes. We have 

identified several issues that adversely affected depot efficiency and 

productivity, including DOD’s policy for greater reliance on the private 

sector for depot support of new weapon systems and major upgrades, the 

increased reliance on the use of regional repair activities and privatesector contractors for work that otherwise might be done in the depots, 

cost and schedule overruns, excess capacity, and difficulties in effectively 

using depot personnel.13 In August 2002, an Army task force identified 

problems with depot efficiency and productivity at the Corpus Christi 

depot. The task force pointed to the following as key problem areas: the 

use of inaccurate data to price maintenance programs, schedule and cost 

overruns caused by work performed against wrong standards and beyond 

the statement of work, and the use of direct workers to perform indirect 

tasks. 

Initiatives that have been implemented to improve depot efficiency and 

productivity include “rightsizing” at realigned depots, depot partnerships 

designed to improve the efficiency and performance of depot operations, 

and lean manufacturing initiatives. The 1995 base realignment and closure 

process significantly realigned two of the remaining five Army depots. 

Significant efforts were made to rightsize the workforce, property, plant, 

and equipment on the basis of assigned and projected workloads at the 

Letterkenny and Red River depots, which had the benefit of BRAC funding 

to support their realignment activities. The other depots have attempted to 

improve their efficiency as well. 

 13 See GAO/NSIAD-99-31 and U.S. General Accounting Office, Defense Depot Maintenance: 

DOD Shifting More Workload for New Weapon Systems to the Private Sector, 

GAO/NSIAD-98-8 (Washington, D.C.: Mar. 31, 1998). 

Factors Resulting in Depot 

Efficiency Problems 

Initiatives to Improve 

Depot Efficiency and 

Productivity 
Page 14 GAO-03-682 Army Depot Maintenance 

Various partnering initiatives have been undertaken to improve depot 

performance. In fiscal year 2002, the Army had 42 depot maintenance 

partnerships, the largest number in any of the military services.14 One of 

the most successful has been the partnership initiative implemented at 

Corpus Christi for the T700 engine. Wanting to reduce the repair time and 

improve the reliability of the Army’s T700 helicopter engine, the Corpus 

Christi Depot entered into a partnership with General Electric to achieve 

these improvements. Under the partnership, Corpus Christi provides the 

facilities and equipment and repairs the engine. General Electric provides 

spare parts as well as technical, engineering, and logistics services. 

According to depot officials, this effort has introduced General Electric’s 

best practices at the depot, which has resulted in a 26-percent reduction in 

engine turnaround time in the T700 engine repair line and a 40-percent 

increase in test cell pass rates for the repaired engines. Depot and 

contractor officials both attribute improved depot repair times for the 

T700 engine to better parts availability and improvements to the depot’s 

repair processes, although they also recognize that the related T700 

recapitalization effort begun shortly after the formation of the partnership 

may also be a factor influencing these improvements. Figure 4 shows the 

repair line for the T700 engine. 

 14 See U.S. General Accounting Office, Depot Maintenance: Public-Private Partnerships 

Have Increased, but Long-Term Growth and Results Are Uncertain, GAO-03-423

(Washington, D.C.: Apr. 10, 2003). 
Page 15 GAO-03-682 Army Depot Maintenance 

Figure 4: Corpus Christi T700 Engine Repair Line 

Other initiatives are also being implemented to improve efficiency and 

productivity in Army depot maintenance operations under the umbrella of 

lean manufacturing. Most of these initiatives are in the early phases of 

implementation, but some progress is being reported. Anniston officials 

report that they have identified a more efficient reciprocating-engine 

process. Corpus Christi officials reported improvements for other 

maintenance processes as a result of their lean-manufacturing initiatives. 

Depot managers at Letterkenny set a goal to reduce the repair time for the 

Patriot missile launcher and report that they have already reduced the 

number of technicians by three and the floor space by 70 percent. Red 

River officials reported that process improvements have allowed them to 
Page 16 GAO-03-682 Army Depot Maintenance 

increase monthly maintenance production for a truck engine from 17 to 

40. A Tobyhanna official stated that, because of its process improvements, 

unit costs for the Sidewinder missile’s guidance and control system have 

decreased substantially. Furthermore, with planned improvements on the 

Sidewinder and two other systems, Tobyhanna officials expect major 

reductions in overhaul and recapitalization timelines, reduced customer 

costs, gains in customer satisfaction, and greater employee satisfaction, as 

depot workers take the lead in transforming their work. 

Trends in two key metrics—-capacity utilization and employee 

productivity—-show that progress has been made in recent years, 

although improvements are still desirable. DOD measures capacity 

utilization by considering the amount of work produced relative to the 

work that could potentially be produced on a single shift operation using 

the number of personnel on board. Table 2 shows capacity utilization in 

each of the five Army depots from fiscal year 1999 through fiscal year 

2002. 

Table 2: Depot Capacity Utilization for Fiscal Years 1999-2002 

Depot capacity in percent 

Depot capacity for fiscal year 

Depot 1999 2000 2001 2002

Anniston 68 66 69a76a

Corpus Christi 60 70 77a83a

Letterkenny 81 66 75 82

Red River 81 83 75 79

Tobyhanna 61 72 78 76

Sources: Army depots and headquarters, Army Materiel Command (data); GAO (presentation). 

a

 Indicates that the number provided by Headquarters, Army Materiel Command, was used when 

there was a difference in the numbers provided by it and the depot. Headquarters’ numbers were 

used because they had been reported by the depots to headquarters in official command documents. 

In the four instances where numbers from these two sources were different, the difference ranged 

from 2 to 14 percent, and the average difference was 7.75 percent. 

Compared to a DOD goal of 75 percent utilization, capacity utilization for 

the five Army depots has fluctuated from fiscal year 1999 through fiscal 

year 2002, but generally has improved. In fiscal year 1999, three of the five 

depots were below the goal by an average of 12 percent while two depots 

exceeded the goal by an average of 6 percent. In contrast, by fiscal year 

2002, all five depots exceeded the goal by an average of 4 percent. At 83 

percent utilization, the Corpus Christi depot showed the highest capacity 

utilization in fiscal year 2002, and Letterkenny and Red River had 

Progress Trends in Two 

Key Metrics 
Page 17 GAO-03-682 Army Depot Maintenance 

utilization rates of 82 and 79 percent, respectively. The higher-capacity 

utilization was largely achieved by decreasing the physical layout or 

“footprint” of the maintenance depot. Downsized by decisions of the 1995 

BRAC process, Letterkenny and Red River received BRAC funds to 

support their realignment activities. While the capacity utilization of these 

two depots for fiscal year 2002 was relatively high, they have the smallest 

workloads of the five depots. 

It is important to remember that DOD’s capacity-utilization computation 

somewhat understates the depots’ full potential for producing work. The 

capacity-utilization computation assumes operations during an 8-hour 

workday and a 5-day workweek. However, all the depots have some 

overtime and some shift work and, if needed, could increase the amount of 

overtime and shift work. 

Another metric—-employee productivity—-also indicates that Army depot 

operations are improving. Employee productivity measures the average 

number of productive hours worked in a year by depot workers after 

leave, holidays, training, and other time away from the job are excluded. 

Table 3 shows average employee productivity at each of the five Army 

depots from fiscal year 1999 through fiscal 2002. 

Table 3: Employee Productivity for Fiscal Years 1999-2002 

Average work hours per year per direct employee for fiscal year 

Depot 1999 2000 2001 2002

Anniston 1,534 1,549 1,551a 1,608

Corpus Christi 1,434 1,516 1,478a1,560a

Letterkenny 1,421 1,504 1,471a1,593a

Red River 1,534 1,494 1,549a1,614

Tobyhanna 1,599 1,622 1,635 1,625

Sources: Army depots and Headquarters, Army Materiel Command (data); GAO (presentation). 

a

 Indicates that the number provided by Headquarters, Army Materiel Command, was used when 

there was a difference between the numbers reported by it and the depot. Headquarters numbers 

were used because they had been reported by the depots to headquarters in official command 

documents. In the six instances where the numbers from these two sources were different, the 

difference ranged from 1 to 51 hours, and the average difference was 13.2 hours. 

The Army depot average of 1,600 hours for fiscal year 2002 was 

significantly higher than it was a few years ago and is progressing toward 
Page 18 GAO-03-682 Army Depot Maintenance 

the DOD standard of 1,615 hours.15 In fiscal year 1999, none of the depots 

were at the standard averaging 1,504 hours and ranging from a low of 

1,421 hours to a high of 1,599 hours. In fiscal year 2002, the number of 

employee productive hours at the Tobyhanna depot was 1,625 and 1,614 at 

Red River. The employee productivity of all of the Army depots has 

improved since 1999. Depot managers said they were successful in 

improving worker productivity by emphasizing to direct workers the need 

for reducing the amount of time spent in nonproductive areas. 

Additional workloads could play a key role in further improving the costeffectiveness of the Army depots and are essential for the depots’ longterm viability. As the systems currently being repaired in the depots age, 

they will be withdrawn from the Army’s inventory and replaced with new 

and/or upgraded systems. If repair and overhaul for the new and upgraded 

systems go to the private sector, workload in the depots will continue to 

diminish. In considering additional workloads for its depots, the Army has 

several options: (1) move work that the private sector is performing either 

by reassignment at contract renewal time or establishing a partnership 

arrangement with the private sector, (2) assign new work from the sourceof-repair process the Army uses to identify where the work will be 

performed, (3) and move work from field-level activities that now perform 

depot tasks. In considering additional workload, an essential issue for the 

Army is whether its depots have the capability or whether establishing 

capability is affordable to take on work that is being performed by other 

sources. 

Acquiring new systems work will be the key to the survivability of the 

depots in the long term. In recent years, the depots have received very 

little new and upgraded systems work. As older systems are withdrawn 

from the inventory, the repair work on systems currently assigned to the 

depots will continue to decline. Unless new systems work is identified for 

the depots, they will become more and more inefficient as their workload 

declines. With regard to the potential for additional workloads for the 

depots from new systems, Army acquisition officials told us that 

establishing new capability at the depots has become more difficult with 

 15 This factor represents the amount of work that a direct labor employee is estimated to be 

able to accomplish in 1 fiscal year. 

Additional Workloads 

Possible and Essential for 

Depot Viability 
Page 19 GAO-03-682 Army Depot Maintenance 

the Army’s implementation of performance-based logistics16 because the 

Army is not buying the technical data or the rights to use the data in 

establishing repair capability at its depots. This could adversely affect the 

Army’s ability to realign existing work from the private sector to 

government-owned depots. An internal Army study found that weapon 

systems program officials make decisions to outsource the repair of new 

and upgraded systems without considering the impact of these decisions 

on the requirement to maintain core capability for essential systems in 

military depots. 

Depot managers believe that partnership arrangements are an effective 

means for improving the efficiency and productivity of depot operations17

and are the best opportunity to bring additional workloads into the depots. 

Among potential partnerships being explored for new workload are the 

following: Anniston, for the M1A2 tank service extension program; Corpus 

Christi, for the Comanche helicopter; Letterkenny, for the Javelin missile; 

and Red River, for the Heavy Expanded Mobility Tactical Truck. 

With regard to moving work from field-level activities that now perform 

depot tasks, the Army has taken some initiative to get control over this 

problem, but the extent that it has dealt with proliferation of depot work 

in field-level activities is unclear. The Report of the House Committee on 

Armed Services on the Floyd D. Spence National Defense Authorization 

Act for Fiscal Year 2001 said that the Army has yet to account accurately 

for depot-level maintenance workloads performed by organizations 

outside the depot system.18 That report directed the Army to provide a 

report identifying the proliferation of depot-level maintenance in these 

activities by February 1, 2001, and directed us to review the Army’s report 

and provide the Congress with an analysis, including an assessment of the 

Army’s ability to comply with 10 U.S.C. 2466, the requirement that not 

more than 50 percent of funds made available for depot-level maintenance 

 16 Performance-based logistics is the preferred support concept for DOD systems. 

According to the department, it is an integrated acquisition and logistics process for buying 

weapon system capability that is designed to delineate outcome performance goals of 

weapon systems; ensure that responsibilities are assigned; provide incentives for attaining 

these goals; and facilitate the overall life-cycle management of system reliability, 

supportability, and total ownership costs. Performance-based logistics contracts were 

negotiated by system program offices for systems such as the C-17 Globemaster cargo 

aircraft. 

17 See GAO-03-423. 

18 Report 106-616 (May 12, 2000) p. 340. 
Page 20 GAO-03-682 Army Depot Maintenance 

be used to contract for performance by nonfederal personnel. The Army 

has not yet reported to the Congress, but Army officials stated that as of 

July 3, 2003, the report was being reviewed internally. We will analyze the 

report when it is completed. 

Beginning in November 1993, the Army did biennial identification of core 

capability requirements and the workloads necessary to sustain those 

depot maintenance core capabilities. The most recent core identification, 

however, was in December 1999 for fiscal year 2001 and showed that 

10.8 million work hours were associated with maintaining core capability 

requirements for the five depots. An updated core identification is 

overdue, but in January 2003 the Deputy Under Secretary of Defense for 

Logistics and Materiel Readiness issued a new core identification 

methodology and, at the time of our review, had additional revisions under 

way to the methodology. Thus, the Army has not yet computed core 

capability requirements based on this new methodology. Furthermore, the 

Army does not routinely assess whether the work performed by its five 

depots is adequate to sustain their core capabilities; and workloads 

performed by the five depots have not been at the level identified by the 

1999 core identification as necessary to maintain core capabilities. 

The identification of core logistics capability involves a complex process 

that has been evolving over the past 10 years. This process is based on a 

requirement contained in 10 U.S.C. 2464 to identify and maintain within 

government owned and operated facilities a core logistics capability, 

including the equipment, personnel, and technical competence required to 

maintain weapon systems identified as necessary for national defense 

emergencies and contingencies. Specifically, the Secretary of Defense is to 

identify the workloads required to maintain core logistics capabilities and 

assign to government facilities sufficient workload to ensure cost 

efficiency and technical competence in peacetime, while preserving 

capabilities necessary to fully support national defense strategic and 

contingency plans. To accomplish this requirement, beginning in 

November 1993, the Office of the Deputy Secretary of Defense for 

Logistics outlined a standard multi-step method for determining core 

capability requirements and directed the services to use this method in 

computing biennial core capability and associated workload requirements. 

In November 1996, the core methodology was revised to include (1) an 

assessment of the risk involved in reducing the core capability 

requirements as a result of having maintenance capability in the private 

sector and (2) the use of a best-value comparison approach for assigning 

workload not associated with maintaining a core capability to the public 

Core Capability Issues 
Page 21 GAO-03-682 Army Depot Maintenance 

and private sectors. The core methodology provided a computational 

framework for quantifying core depot maintenance capabilities and the 

workload needed to sustain these capabilities. It included three general 

processes: 

1. The identification of the numbers and types of weapon systems 

required to support the Joint Chief of Staff’s wartime-planning 

scenarios. 

2. The computation of depot maintenance core capability workload 

requirements measured in direct labor hours to support the weapon 

systems’ expected wartime operations as identified in the wartimeplanning scenarios. 

3. The determination of industrial capabilities (including the associated 

personnel, technical skills, facilities, and equipment) that would be 

needed to accomplish the direct labor hours identified above that were 

generated from the planning scenarios. That determination is adjusted 

to translate those capabilities into peacetime workloads needed to 

support them. These peacetime workloads represent the projected 

workload necessary to support core capability requirements for the 

next program year in terms of direct labor hours. 

To conclude the process, the services then identify specific repair 

workloads and allocate the core work hours needed to accomplish the 

maintenance work that will be used to support the core capabilities at the 

public depots. 

We previously reported that the DOD depot maintenance policy was not 

comprehensive and that the policy and implementing procedures and 

practices provided little assurance that core maintenance capabilities were 

being developed as needed to support future national defense emergencies 

and contingencies.19 Some of the weaknesses were that (1) the existing 

policy did not provide a forward look at new weapon systems and 

associated future maintenance capability requirements, (2) the existing 

policy did not link the core identification process to source-of-repair 

policies and procedures for new and upgraded systems, and (3) the 

various procedures and practices being used by the services to implement 

the existing policy, such as using “like” workloads to sustain core 

capabilities, were affecting the ability of the depots to establish core 

 19 See GAO-02-105. 
Page 22 GAO-03-682 Army Depot Maintenance 

capabilities. In October 2001, DOD revised the methodology by dividing 

the core methodology into two distinct parts to more clearly distinguish 

between core capability requirements and the depot maintenance 

workloads needed to satisfy those requirements. Detailed core capability 

and associated workload computations would be performed on a biennial 

basis in conjunction with the planning, programming, and budgeting 

system in order to address both the requirements for new systems and 

changes to existing systems. Also, core computations would be reviewed 

annually to assess the impact of unanticipated budgetary adjustments. 

Regarding the new methodology issued in January 2003, DOD officials told 

us that some revisions are being made and the methodology has not yet 

been finalized. Thus, we have not reviewed the methodology in detail and 

cannot be sure whether the new methodology will correct the weaknesses 

we identified in the core process. 

The Army’s identification of core capabilities and workloads required to 

sustain them in December 1999 showed that the five depots had a total 

workload requirement of 10.8 million work hours associated with its core 

capability requirements. As shown in table 4, work performed by the 

depots for the 4-year period, fiscal years 1999 to 2002, was generally below 

the amount identified for total core capability requirements. 

Table 4: Comparison of Core Capability and its Associated Workload with Actual 

Work Performed for Fiscal Years 1999-2002 

Hours in millions 

 Fiscal years 

Depot 

1999 core 

capability 

assessment 1999 2000 2001 2002

Anniston 2.3 2.0 2.0 2.1 2.5

Corpus Christi 3.5 2.3 2.5 2.6 2.9

Letterkenny 1.1 0.9 0.7 0.8 0.9

Red River 0.9 1.2 1.1 0.9 1.2

Tobyhanna 3.0 2.4 2.7 2.6 2.6

Total 10.8a 8.8a 9.0a 9.0a 10.1a

Sources: Army (data); GAO (presentation). 

a

 Excludes overtime hours. 

Depot officials stated that for the core identification process, the depots 

identify the skills required by job series to support the core capability. 

However, Army officials said that neither the depots nor the Army 

routinely assess the extent to which work performed by the depots 
Page 23 GAO-03-682 Army Depot Maintenance 

compares with the identification of core capability requirements and 

associated workloads. Thus, they do not have the information needed to 

determine whether the level and nature of the work performed in the 

depots is sufficient to ensure cost efficiency and technical competence 

and to preserve core capability. 

When we discussed identification of core capability and associated 

workloads with depot managers, they said that ensuring appropriate 

workloads are going to the depots is essential to their being able to 

maintain required core skills to support combat readiness. They also 

expressed concern that the definition of core capability workload 

requirements seems to constantly fluctuate and that maintenance 

workloads that once were identified as required for core capabilities were 

being transferred to the private sector. For example, depot managers at 

the Red River Army Depot pointed out that workload associated with the 

Heavy Expanded Mobility Tactical Truck was a significant factor in the 

depot’s ability to maintain the necessary core capabilities. However, the 

truck workload was lost in October 2001 when the Army decided to stop 

recapitalization work at the depot and to use a contractor to perform an 

extended service life program for the truck. They said that other systems, 

such as the Bradley Fighting Vehicle, are headed in the same direction. 

Depot managers also pointed out that the depots are not always assigned 

work sufficient to ensure cost efficiency and technical competence and to 

preserve surge capability. Additionally, the depots are not capable of 

providing some core capabilities. For example, the depots do not have 

capability to repair key components of the M1A2 tank, the Apache 

helicopter, and the Bradley Fighting Vehicle for which core capability 

requirements were identified. More specifically, Anniston does not have 

the capability to support unique electronic components for the M1A2 tank, 

Corpus Christi does not have the capability to support Apache Longbow 

unique components, and Red River does not have the capability to support 

electronic components for the Bradley A3 model. Our October 2001 report 

identified a number of the same concerns with the fluctuations in core 

capability identification and the loss of work required to sustain depot 

core capabilities.20 DOD’s latest policy on core, which was released in 

January 2003, requires the services to develop an assessment of what 

specific workload is necessary to achieve its core goals at the DOD, 

service, and facility levels. However, the services have not yet been tasked 

by DOD to recompute core capability requirements based on the new 

 20 See GAO-02-105. 
Page 24 GAO-03-682 Army Depot Maintenance 

policy. Officials said some changes to the revised policy are expected to 

occur. 

Although we previously recommended that a strategic plan for DODowned depots be developed, neither the Office of the Secretary of Defense 

nor the Department of the Army has implemented comprehensive or 

strategic plans for defense maintenance to revitalize or protect the future 

viability of its depot facilities and equipment and its depot workers.21 The 

Army has taken steps to develop a strategic plan for its depots, but it is not 

comprehensive or current and the Army has not yet implemented it. The 

Office of the Secretary of Defense has undertaken a depot planning study, 

but still has no depot strategic plan. 

Our prior reports have demonstrated that a strategic plan is critical to the 

future viability of the defense depot system. For example, in our October 

2001 report, we pointed out that logistics activities represent a key 

management challenge and that depot maintenance is an important 

element of those activities.22 As such, we noted that DOD was at a critical 

point with respect to the future of its maintenance programs and that the 

future role for the military depots in supporting the department’s future 

maintenance programs was unclear. Finally, we pointed out that before 

DOD can know the magnitude of the challenge of revitalizing its depot 

facilities and equipment and its depot workforce, it must first know what 

its future workloads will be; what facility, equipment, and technical 

capability improvements will be required to perform that work; and what 

personnel changes will be needed to respond to retirements and workload 

changes. We recommended, among other things, that the Secretary of 

Defense direct the Under Secretary of Defense for Acquisition, 

Technology, and Logistics, in conjunction with the military services, to 

establish expedited milestones for developing strategic and related 

implementation plans for the use of military depots that would identify 

desired short- and long-term core capabilities and associated capital 

investments and human capital needs. However, although the Department 

is conducting a study that could lead to the development of a depot 

strategic plan, as of July 2003, DOD still has no strategic plan that provides 

 21 See U.S. General Accounting Office, Defense Maintenance: Sustaining Readiness 

Support Capabilities Requires a Comprehensive Plan, GAO-01-533T (Washington, D.C.: 

Mar. 23, 2001). 

22 See GAO-02-105. 

Strategic Planning 

Issues for Depots 
Page 25 GAO-03-682 Army Depot Maintenance 

required direction to shape the future of the depots if they are expected to 

remain viable for the future. We again addressed the issue of the need for 

strategic planning in our recent report on strategic workforce planning for 

the DOD industrial workforce, noting that DOD has not implemented our 

prior recommendations regarding the need for a DOD depot strategic plan. 23 However, absent a DOD depot plan, the services have laid out a 

framework for strategic depot planning in varying degrees, but this is not 

comprehensive. 

While the Army has taken some actions regarding the development of a 

strategic depot plan, its plan is not comprehensive, and implementation of 

the plan was suspended. In January 2000, the Army Deputy Chief of Staff 

for Logistics published Army Depot Maintenance Enterprise Strategic 

Plan, a plan that provided mission and vision statements for the Army 

depots and identified five strategic issues for which they began developing 

action plans: 

1. Identification and management of all depot maintenance requirements 

for Army systems throughout all phases of their life cycles in the 

Planning, Programming, and Budget Execution System. 

2. Restructuring the process for determining the source of depot repair to 

ensure that appropriate approval authorities are utilized for decisions 

to rebuild, overhaul, upgrade, and repair decisions above a certain 

threshold (e.g., dollar value). 

3. Ensuring that the Army depot workforce is capable of meeting future 

depot maintenance requirements. 

4. Managing materiel/supplies (parts) used by the depots to provide for 

more efficient depot operations. 

5. Making Army depots more competitive with private-sector depot 

maintenance providers. 

Identifying these broad strategic issues, along with some objectives, 

measures, and action plans, was a step in the right direction. However, the 

Army did not finalize or implement its action plans. Army planners told us 

 23 See U.S. General Accounting Office, DOD Civilian Personnel: Improved Strategic 

Planning Needed to Help Ensure Viability of DOD’s Civilian Industrial Workforce, 

GAO-03-472 (Washington, D.C.: Apr. 30, 2003). 
Page 26 GAO-03-682 Army Depot Maintenance 

that implementing the strategic plan was put on hold, pending an effort to 

reassess depot capabilities and requirements as part of the Army’s effort to 

identify the depot capabilities that had proliferated in field-level activities. 

The plan did not address depot maintenance that is being performed in 

field-level activities. The Army’s assessment of depot proliferation was 

supposed to result in a report to the Congress on this subject, but as 

previously discussed, the Army has not yet provided this report. 

Furthermore, Army officials stated that there has been no update to 

modify the strategic plan to address how the Army will manage this 

category of depot work. 

Continuing issues about (1) the assignment of reduced workloads to Army 

maintenance depots, (2) deficiencies in the process of quantifying both 

core depot maintenance capabilities and the workload needed to ensure 

cost efficiency and technical competence and to preserve surge capability, 

and (3) strategic planning for depots raise significant questions about the 

long-term viability of Army depots. We have discussed these issues in the 

past, but they remain unresolved. It will be important for the Congress and 

the Department of Defense to clarify these issues to ensure the continued 

performance of required support resources in the future. 

In addition to the issues discussed in the past, we identified another area 

where action would improve data reliability for Army depotsthe 

development and implementation of procedures for identifying and 

reporting depot workload projections from the Army acquisition 

community and from non-Army customers. By addressing both the 

identification and reporting of initial forecasts as well as subsequent 

changes to the forecasts, greater reliability should be achievable for the 

Army Workload and Performance System. Furthermore, as DOD has 

observed, improved projections of interserviced maintenance work would 

benefit all depots, not just those of the Army. 

To improve the reliability of future maintenance workload projections in 

all DOD maintenance depots, we recommend that the Secretary of 

Defense through the Under Secretary of Defense for Acquisition, 

Technology, and Logistics, 

• require the Army Materiel Command in conjunction with the Army 

acquisition community to develop and implement standard 

business rules and procedures for identifying and reporting Army 

Conclusions 

Recommendations for 

Executive Action 
Page 27 GAO-03-682 Army Depot Maintenance 

depot workload projections from the Army acquisition community 

and 

• require the DOD depot maintenance community to develop and 

implement ways to improve the identification and reporting of 

depot inter-service workload projections across all the military 

services using standard business rules and procedures. 

In commenting on a draft of this report, the Department partially 

concurred with our recommendations to improve the reliability of future 

workload projections. Appendix II contains the text of DOD’s comments. 

The Department partially concurred with the recommendation in our draft 

report that the Army Materiel Command develop standard business rules 

and procedures for identifying and reporting Army depot workload 

projections. While agreeing that this could be done for work coming from 

the Army acquisition community, the response noted that the Department 

did not believe that the Army Materiel Command alone could establish 

standard business rules and procedures for identifying and reporting Army 

depot workload projections from the non-Army customers. However, the 

Department agreed with us that a need exists for Army Depots to have 

valid workload projections from the Army acquisition community and 

non-Army customers and that standard business rules and procedures are 

required. Moreover, the Department’s response stated that since the lack 

of workload projection data for inter-service depot workloads should be 

addressed across all the military services, the Department planned to 

initiate a study to examine how the identification and reporting of depot 

inter-service workload projections across all the military services can be 

improved. Consequently, we modified our recommendation to address the 

Department’s comments. 

The Department partially concurred with a second recommendation in the 

draft report requiring the Army acquisition community and non-Army 

customers to report depot workload projections for Army depot work 

through the Army Workload and Performance System using the standard 

business rules and procedures. The Department stated that it agreed in 

concept that Army customers should provide Army depots with workload 

projections, but that it currently does not appear feasible for all non-Army 

customers to report depot workload projections for Army depots through 

the Army Workload and Performance System. Therefore, we dropped the 

reference to the Army Workload and Performance System from our 

recommendation. The Department stated also that, as with the first 

Agency Comments 

and Our Evaluation 
Page 28 GAO-03-682 Army Depot Maintenance 

recommendation, it plans to address this recommendation with a study to 

examine how the identification and reporting of inter-service workload 

projections across the military services can be improved. 

The Department also provided some technical comments for our draft 

report that were incorporated where appropriate. 

We are sending copies of this report to interested congressional 

committees; the Secretary of Defense; the Secretary of the Army; and the 

Director, Office of Management and Budget. We will make copies available 

to others upon request. In addition, the report will be available at no 

charge on the GAO Web site at http://www.gao.gov. 

If you or your staff have questions regarding this report, please contact me 

at (202) 512-8412 or holmanb@gao.gov or Julia Denman, Assistant 

Director, at (202) 512-4290 or denmanj@gao.gov. Other major contributors 

to this report were Bobby Worrell, Janine Prybyla, Jane Hunt, and Willie 

Cheely. 

Sincerely yours, 

Barry W. Holman 

Director, Defense Capabilities 

 and Management 
Appendix I: Scope and Methodology 

Page 29 GAO-03-682 Army Depot Maintenance 

To answer the specific questions posed by the Ranking Minority Member, 

Subcommittee on Military Readiness, House Committee on Armed 

Services, we interviewed Army officials and analyzed pertinent 

information at Army headquarters in the Washington, D.C., area; 

Headquarters, Army Materiel Command in Alexandria, Virginia; and three 

subordinate Army commands—the Army Aviation and Missile Command, 

Huntsville, Alabama; Communications-Electronics Command, Fort 

Monmouth, New Jersey; and the Tank-automotive and Armaments 

Command, Warren, Michigan. Additionally, we interviewed depot 

managers and reviewed pertinent information at the Army’s five depots: 

Anniston Army Depot, Anniston, Alabama; Corpus Christi Army Depot, 

Corpus Christi, Texas; Letterkenny Army Depot, Chambersburg, 

Pennsylvania; Red River Army Depot, Texarkana, Texas; and Tobyhanna 

Army Depot, Tobyhanna, Pennsylvania. We also made extensive use of our 

prior work and ongoing work related to Army depot maintenance. 

To assess the trends in historical and future workloads assigned to the 

Army depots, we analyzed workload information from the Army’s 

automated databases. Specifically, for historical workloads, we evaluated 

the trend in workload hours for closed maintenance programs from the 

Army Headquarters Application System for fiscal years 1987 through 2002. 

For trends in future workloads, we used workload hours from the Army 

Workload and Performance System for fiscal years 2003 through 2008. For 

the reliability of future workload projections, we used our prior work 

showing that Army depot workload estimates are subject to frequent 

changes because of factors such as fluctuations in requirements and 

funding levels. We also questioned Army officials and depot managers 

about the reliability of the workload estimates as shown by the Army 

Workload and Performance System. 

In determining whether the depots have sufficient workload to promote 

efficient maintenance operations, we compared metric data that others 

and we have previously identified with data on the Army’s current 

operations. We examined data on key metrics to determine how well the 

depots performed assigned workloads against key metrics and standards 

such as depot-level capacity utilization and employee productivity. We 

obtained metric data from the Army depots and from Headquarters, Army 

Materiel Command. Since Headquarters, Army Materiel Command, could 

not provide the data prior to 2001, the data for fiscal years 1999 and 2000 

are from the depots. In those instances where the reported data for fiscal 

years 2001 and 2002 differed, we used the data reported by Headquarters, 

Army Materiel Command, because the headquarters data were reported by 

the depots. To identify whether additional workloads are possible, we 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 30 GAO-03-682 Army Depot Maintenance 

relied upon our prior and ongoing work, which shows that the Army had 

contracted with the private sector for maintenance workloads that its 

depots had previously performed and that upgrades and modifications of 

older systems and new weapon systems were a potential source of work 

for the depots. We also questioned acquisition and logistics officials at the 

subordinate commands with responsibility for workloads for the depots 

about workloads that were being considered for the Army depots and the 

limitations to bringing these workloads to the depots. To identify whether 

initiatives are being implemented to improve efficiency, we examined the 

plans and projects that the depots had under the umbrella of lean 

manufacturing to improve maintenance operations. In addition, we 

reviewed depot reports on the extent to which these initiatives were 

improving operations. 

To answer whether the Army has identified the depots’ core capability and 

provided its depots with workload to use that capability, we reviewed the 

Department of Defense and Army guidance for computing core capability 

requirements and associated workloads in December 1999 for fiscal year 

2001 and compared the results with workloads assigned to the depots 

since fiscal year 1999. We also examined the department’s new 

methodology issued in January 2003 for computing core capability 

requirements and questioned department and Army officials about the 

schedule for implementing the new methodology. We also questioned 

depot officials about the adequacy of workloads assigned and the extent to 

which the work allows the depots to maintain necessary capabilities. 

For the question of whether the Army has a long-range plan for the future 

viability of an efficient depot system, we relied upon prior work that 

shows that neither the department nor the Army had a comprehensive 

defense maintenance strategic plan. 

We conducted our review from September 2002 through June 2003 in 

accordance with generally accepted government auditing standards. 
Appendix II: Comments from the Department 

of Defense 

Page 31 GAO-03-682 Army Depot Maintenance 

Appendix II: Comments from the Department 

of Defense 
Appendix II: Comments from the Department 

of Defense 

Page 32 GAO-03-682 Army Depot Maintenance (350361) 
The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional responsibilities 

and to help improve the performance and accountability of the federal 

government for the American people. GAO examines the use of public funds; 

evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents 

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics. 

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site 

daily. The list contains links to the full-text document files. To have GAO e-mail 

this list to you every afternoon, go to www.gao.gov and select “Subscribe to daily 

E-mail alert for newly released products” under the GAO Reports heading. 

The first copy of each printed report is free. Additional copies are $2 each. A 

check or money order should be made out to the Superintendent of Documents. 

GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a 

single address are discounted 25 percent. Orders should be sent to: 

U.S. General Accounting Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800 

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Public Affairs