United  States  General  Accounting  Office 
GAO 
Report  to  the  Secretary  of  the  Navy 
June  1987 
NAVY 
MAINTENANCE 
The  P-3  Aircraft 
Overhaul  Program  Can 
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GAO/NSIAD-87-157
GAO 
United  States 
General  Accounting  Office 
Washington,  D.C.  20548 
National  Security  and 
International  Affairs  Division 
B-226749 
June  26,  1987 
The  Honorable  James  H.  Webb 
The  Secretary  of  the  Navy 
Dear  Mr.  Secretary: 
We  have  completed  a  review  of  Navy  procedures  for  overhauling  P-3 
aircraft.  During  fiscal  year  1985,  the  Navy  spent  about  $50  million  for 
such  overhauls. 
We  found  that  the  Navy  could  increase  aircraft  availability  and  reduce 
overhaul  costs  by  (1)  performing  more  inspections  to  determine  if  over- 
hauls are  necessary,  (2)  scheduling  overhauls  more  efficiently,  and  (3) 
concentrating  the  labor  force  on  fewer  aircraft.  We  also  found  that  the 
Navy  has  more  production  capacity  than  needed  to  overhaul  P-3  air- 
craft. Our  findings  are  summarized  below  and  are  discussed  in  greater 
detail  in  appendix  I. 
The  Navy  has  established  the  Aircraft  Service  Period  Adjustment  pro- 
gram in  which  aircraft  are  inspected  before  they  are  due  for  overhauls 
to  determine  whether  overhauls  can  be  deferred  for  12  months.  Over 
half  of  the  P-3  aircraft  inspected  under  this  program  have  passed 
inspection  and  have  been  allowed  to  continue  in  operation  without  over- 
hauls. However,  the  major  commands  and  their  squadrons  have  not  been 
requesting  inspections  on  many  aircraft.  Of  68  P-3  aircraft  sent  to  the 
depots  for  overhaul  in  fiscal  year  1985, 30  had  not  been  inspected.  Had 
these  aircraft  been  inspected  and  the  historical  rate  of  success  been 
achieved,  overhaul  costs  would  have  been  reduced  (each  overhaul  costs 
an  average  of  $715,000)  and  aircraft  operational  periods  would  have 
been  increased. 
The  Naval  Air  Systems  Command's  Naval  Aviation  Logistics  Center  allo- 
cates projected  aircraft  overhauls  among  the  depots  on  a  quarterly 
basis.  However,  the  major  commands  and  their  squadrons  frequently 
request  modifications  to  the  quarterly  schedule  before  actually  deliver- 
ing aircraft  to  the  depots  and  the  Logistics  Center  routinely  approves 
them.  The  lack  of  adequate  central  control  over  aircraft  deliveries  has 
resulted  in  periods  when  aircraft  have  waited  outside  the  depots  for 
their  turn  to  be  overhauled  and  other  periods  when  the  overhaul  capac- 
ity has  been  underutilized.  In  fiscal  year  1985,  P-3  aircraft  waited  an 
average  of  2  weeks  for  overhauls  to  begin. 
Page  1  GAO/NSIAD-87-157  Aircraft  Overhauls
B-226749 
In  performing  overhauls,  the  depots  spread  available  workers  over  as 
many  aircraft  as  they  can  fit  into  a  production  line.  If  the  depots  were  to 
concentrate  the  workers  on  fewer  aircraft,  they  could  finish  work  on 
each  aircraft  sooner  and  overhaul  just  as  many  aircraft  over  time. 
Faster  overhauls  would  increase  the  time  aircraft  are  available  for 
operations. 
The  production  lines  at  the  two  Navy  depots  and  at  the  one  commercial 
depot  have  the  combined  capacity  to  overhaul  134  P-3  aircraft  annually. 
Since  annual  overhaul  requirements  are  not  expected  to  exceed  99  air- 
craft through  the  remainder  of  this  century,  the  depots  have  a  consider- 
able amount  of  excess  capacity.  This  excess  capacity  results  in 
redundancies  and  unnecessary  duplication  in  spare  parts,  supplies,  and 
equipment,  as  well  as  in  management,  administrative,  and  other  support 
costs. 
To  improve  the  P-3  aircraft  overhaul  program,  we  recommend  that  you: 
Require  that  all  P-3  aircraft  due  for  overhaul  be  inspected  under  the 
Aircraft  Service  Period  Adjustment  program  unless  an  inspection 
exemption  is  specifically  authorized. 
Direct  that  the  Naval  Aviation  Logistics  Center  assume  a  more  active 
role  in  coordinating  actual  deliveries  of  P-3  aircraft  for  overhaul  so  that 
each  aircraft  can  be  scheduled  on  a  specific  date  to  coincide  with  a 
depot's  ability  to  begin  work  on  that  aircraft. 
Explore  opportunities  to  reduce  overhaul  turnaround  time  by  concen- 
trating labor  resources  at  the  depots  on  as  few  P-3  aircraft  as  possible. 
Examine  ways  to  eliminate  excess  P-3  aircraft  overhaul  capacity  at  the 
depots,  perhaps  by  closing  one  of  the  three  P-3  aircraft  production  lines. 
We  also  recommend  that  you  determine  the  feasibility  of  implementing 
the  above  recommendations  on  other  aircraft.  The  P-3  aircraft  has  one 
of  the  shortest  overhaul  turnaround  times  among  Navy  aircraft  and  any 
procedural  changes  to  reduce  that  time  could  have  applicability  to  other 
aircraft. 
The  Department  of  Defense  (dod)  provided  comments  on  a  draft  of  this 
report.  (See  app.  II.)  With  the  exception  of  the  excess  capacity  issue,  dod 
stated  it  generally  agreed  with  our  findings  and  recommendations  and 
noted  that  corrective  actions  have  been  taken  or  are  underway,  dod  also 
stated  that  current  management  initiatives  will  help  ensure  that  all  air- 
craft production  lines  are  operated  effectively  and  efficiently. 
Page  2  GAO/NSIAD37-157  Aircraft  Overhauls
B-226749 
On  the  capacity  issue,  dod  expressed  the  view  that  there  is  no  excess  P-3 
overhaul  capacity  at  the  Alameda  and  Jacksonville  depots.  After 
reevaluating  the  matter,  we  still  believe  that  a  significant  amount  of 
excess  P-3  capacity  will  continue  to  exist,  particularly  if  the  capacity  at 
the  contractor  depot  is  considered.  Our  complete  evaluation  of  dod's 
comments  is  in  appendix  I. 
As  you  know,  31  U.S.C.  720  requires  the  head  of  a  federal  agency  to 
submit  a  written  statement  on  actions  taken  on  our  recommendations  to 
the  Senate  Committee  on  Governmental  Affairs  and  the  House  Commit- 
tee on  Government  Operations  no  later  than  60  days  after  the  date  of 
the  report  and  to  the  House  and  Senate  Committees  on  Appropriations 
with  the  agency's  first  request  for  appropriations  made  more  that  60 
days  after  the  date  of  the  report. 
We  are  sending  copies  of  this  report  to  the  Chairmen  of  the  above  com- 
mittees; the  Chairmen,  Senate  and  House  Committees  on  Armed  Ser- 
vices; the  Secretary  of  Defense;  and  the  Director,  Office  of  Management 
and  Budget. 
Sincerely  yours, 
-TZj  a^v-^      —  ^ — ^v^ft-"\A-*wv^ 
Frank  C.  Conahan 
Assistant  Comptroller  General 
Page  3  GAO/NSIAT>87-l 57  Aircraft  Overhauls
Contents 
Letter 
Appendix  I 
Planning  for  P-3 
Aircraft  Overhauls 
Objective,  Scope,  and  Methodology 
Selecting  Aircraft  for  Overhaul 
Inspections  Needed  to  Ensure  Overhauls  Are  Necessary 
Overhauls  Can  Be  Scheduled  More  Efficiently 
Labor  Resources  Can  Be  Applied  More  Efficiently 
Depots  Have  Excess  Overhaul  Capacity 
Appendix  II 
Comments  From  the 
Assistant  Secretary  of 
Defense  (Production 
and  Logistics) 
Table 
Table  LI:  Annual  P-3  Overhaul  Capacity 
Abbreviations 
dod  Department  of  Defense 
Page  4 
GAO/NSIAD-87-167  Aircraft  Overhaul*
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
The  P-3  is  a  shore-based,  long-range  aircraft  designed  to  combat 
submarines.  The  Navy  has  24  active  P-3  squadrons,  13  reserve  squad- 
rons, and  5  squadrons  for  training  and  special  projects.  The  P-3  inven- 
tory totals  441  aircraft. 
During  its  30-year  life,  a  P-3  is  expected  to  undergo  six  overhauls  at  one 
of  two  Naval  Air  Rework  Facilities,  also  known  as  depots,  located  at 
Jacksonville,  Florida,  and  Alameda,  California,  or  at  a  commercial  depot 
located  at  Lake  City,  Florida.  To  compensate  for  the  time  aircraft  spend 
in  a  depot,  the  Navy  purchases  a  number  of  aircraft  beyond  those  it 
needs  to  have  in  operation  at  a  given  time.  For  the  P-3  aircraft,  the  Navy 
has  calculated  that  it  needs  an  additional  10.6  percent  aircraft  to  ensure 
it  has  enough  aircraft  to  meet  both  operational  and  maintenance  needs. 
With  a  total  of  441  P-3s  in  inventory,  this  represents  399  P-3s  in  an 
operational  status  and  42  additional  aircraft  to  sustain  this  operational 
level  while  aircraft  are  in  the  depots  for  overhauls. 
The  time  an  aircraft  spends  at  a  depot  is  called  turnaround  time.  As  the 
average  turnaround  time  increases,  the  total  number  of  aircraft  needed 
to  sustain  a  given  number  of  operational  aircraft  also  increases.  For  the 
P-3,  if  the  average  turnaround  time  increased  by  3.5  days,  one  addi- 
tional aircraft  would  have  to  be  purchased,  at  a  cost  of  about  $36  mil- 
lion, to  assure  that  the  average  number  of  operational  aircraft  does  not 
decrease. 
Objective,  Scope,  and 
Methodology 
Our  objective  was  to  determine  whether  the  Navy  could  reduce  depot 
overhaul  turnaround  time  for  the  P-3  aircraft  by  improving  overhaul 
procedures. 
We  visited  the  two  Navy  depots  that  overhaul  the  P-3  aircraft:  the  Ala- 
meda Naval  Air  Rework  Facility  and  the  Jacksonville  Naval  Air  Rework 
Facility.  At  these  depots,  we  interviewed  P-3  aircraft  production  mana- 
gers, foremen,  engineers,  schedulers,  and  planners  and  reviewed  plan- 
ning documents,  such  as  production  line  layouts,  work  flow  charts, 
induction  and  production  schedules,  critical  path  charts,  and  dod  and 
Navy  directives  and  instructions. 
We  also  visited  two  Navy  headquarters  activities.  At  the  Naval  Air  Sys- 
tems Command's  Naval  Aviation  Logistics  Center,  we  obtained  data  on 
aircraft  turnaround  times,  mobilization  requirements,  and  aircraft  over- 
haul schedules.  At  the  Office  of  the  Deputy  Chief  of  Naval  Operations 
(Air  Warfare),  we  obtained  P-3  purchase  costs  and  overhaul  projections. 
Page  6 
GAO/NSIAD47157  Aircraft  Overhauls
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
We  compared  (1)  actual  overhaul  data,  such  as  facility  layouts,  work 
flow,  labor  applications,  and  turnaround  times,  to  the  Navy's  plan  for 
overhauling  P-3  aircraft,  (2)  alternative  production  line  layouts  and 
single-shift  to  multiple  shift  plans  of  operation,  and  (3)  the  combined 
capacity  of  the  two  Navy  depots  and  the  contractor  depot  to  current  and 
expected  overhaul  requirements. 
Our  review  was  made  in  accordance  with  generally  accepted  govern- 
ment auditing  standards  and  was  performed  between  April  1985  and 
December  1986. 
Selecting  Aircraft  for 
Overhaul 
P-3  aircraft  are  routinely  considered  for  overhaul  after  operating  for  a 
specific  number  of  months  that  ranges  from  46  to  60  months,  depending 
upon  the  age  of  the  aircraft.  The  procedure  for  selecting  a  P-3  for  over- 
haul begins  at  the  squadron.  Six  months  before  a  P-3  is  due  for  over- 
haul, the  squadron  that  has  custody  of  the  aircraft  may  request, 
through  its  major  command,  an  inspection  of  the  aircraft  by  qualified 
depot  personnel  to  determine  if  the  due  date  can  be  extended  an  addi- 
tional 12  months.  These  inspections  are  done  under  the  Navy's  Aircraft 
Service  Period  Adjustment  program.  If  the  date  is  not  extended,  the 
squadron  has  the  remaining  6  months,  plus  3  months  after  the  due  date, 
to  deliver  the  aircraft  to  one  of  the  P-3  overhaul  depots. 
If  a  P-3  fails  the  inspection  or  if  the  squadron  decides  not  to  request  an 
inspection,  the  squadron,  again  through  its  major  command,  notifies  the 
Naval  Aviation  Logistics  Center  that  it  has  an  aircraft  in  need  of  an 
overhaul.  The  Logistics  Center  is  responsible  for  scheduling  aircraft  into 
the  depots  for  overhaul  and  for  notifying  the  major  command  which 
depot  will  do  the  overhaul.  Approximately  30  days  before  it  expects  to 
deliver  the  aircraft  to  the  depot,  the  squadron  provides  the  Logistics 
Center  with  the  specific  identification  of  the  P-3  and  the  expected  date 
of  delivery.  The  squadron  may  later  request  that  the  delivery  date  be 
revised  to  accommodate  changes  in  deployment  schedules  or  overhaul 
priorities. 
Inspections  Needed  to 
Ensure  Overhauls  Are 
Necessary 
Many  aircraft  are  not  receiving  advance  inspections  to  determine  if 
overhauls  are  necessary.  Before  an  aircraft  is  due  for  overhaul,  the 
Navy  gives  the  squadron  the  option  of  having  it  inspected  by  qualified 
depot  personnel  to  determine  whether  the  overhaul  can  be  postponed. 
Between  January  1984,  when  inspections  of  most  P-3  aircraft  began 
under  the  Aircraft  Service  Period  Adjustment  program,  and  December 
Page  7 
GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
1985,  depot  personnel  inspected  152  aircraft.  Of  this  number,  85  aircraft 
(56  percent)  were  given  12  additional  months  to  continue  in  operation 
without  overhauls.  Extending  the  time  between  overhauls  reduces  the 
average  time  that  aircraft  spend  in  a  depot,  which  increases  aircraft 
availability.  Other  benefits  include  (1)  a  reduction  in  requirements  for 
depot  overhaul  capacity  because  as  the  number  of  additional  aircraft 
needed  to  sustain  the  required  level  of  operational  aircraft  decreases, 
fewer  aircraft  will  require  overhaul,  and  (2)  one  less  overhaul  for  most 
P-3s  because  the  accumulation  of  extension  time  may  reduce  the  total 
number  of  overhauls  from  six  to  five  over  the  30-year  service  life  of  the 
P-3  aircraft. 
Despite  these  benefits,  not  all  aircraft  were  inspected  by  depot  person- 
nel before  overhauls.  During  fiscal  year  1985,  the  squadrons  sent  68 
P-3s  to  the  depots  for  overhauls,  of  which  38  had  been  inspected.  The 
remaining  30  P-3s  were  sent  without  assurance  that  overhauls  were 
needed.  If  inspections  had  been  performed  and  the  historical  rate  of 
overhaul  deferrals  (56  percent)  had  been  achieved,  17  of  the  30  aircraft 
would  have  passed  the  inspections  and  remained  in  the  squadron  for 
another  year.  We  have  no  reason  to  believe  that  the  historical  pass  rate 
would  not  be  realized  on  these  aircraft. 
Extending  the  time  between  overhauls  for  the  17  aircraft  would  have 
resulted  in  substantial  cost  savings.  According  to  dod,  the  cost  of  an  Air- 
craft Service  Period  Adjustment  program  inspection  is  about  $15,000.  In 
contrast,  the  average  cost  of  an  overhaul  is  $715,000.  Therefore,  the 
Navy  would  have  saved  almost  $12  million  in  overhaul  costs  in  fiscal 
year  1985  if  these  17  aircraft  had  not  been  overhauled. 
We  asked  command  officials  why  they  did  not  request  preoverhaul 
inspections  on  all  P-3  aircraft.  They  stated  that,  in  some  cases,  the  unin- 
spected aircraft  were  in  such  obvious  need  of  overhauls  that  inspections 
would  have  been  a  waste  of  funds.  However,  depot  officials  stated  that 
the  squadrons  lack  the  expertise  to  decide  whether  an  overhaul  is  neces- 
sary and  that  depot  personnel  are  much  better  qualified  to  make  this 
judgment.  Moreover,  the  $15,000  cost  of  an  inspection  is  only  about  2 
percent  of  the  cost  of  an  overhaul.  Consequently,  the  Navy  would  save 
funds  even  if  only  1  out  of  50  inspections  resulted  in  deferring  an 
overhaul. 
In  our  draft  report  we  stated  that  35  of  the  68  P-3s  sent  to  the  depots 
for  overhaul  in  fiscal  year  1985  had  not  been  inspected.  In  commenting 
on  our  draft  report,  dod  stated  that  an  additional  7  P-3s  had  been 
Page  g  GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
inspected  and  provided  reasons  for  not  inspecting  the  remaining  28 
aircraft.  However,  supporting  documentation  subsequently  provided  by 
dod  and  the  Navy  activity  responsible  for  worldwide  maintenance  of  P-3 
aircraft  indicated  that  only  five  of  the  seven  aircraft  actually  had  been 
inspected.  Therefore,  we  have  revised  our  report  to  show  that  a  total  of 
30  rather  than  35  P-3s  had  not  been  inspected  in  fiscal  year  1985. 
In  explaining  why  the  28  aircraft  were  not  inspected,  dod  noted  that 
there  are  valid  reasons  for  aircraft  not  to  receive  inspections  prior  to 
overhaul  and  that  type  commanders  are  allowed  some  operational  flexi- 
bility. However,  by  June  1988,  dod  plans  to  clarify  policy  guidance  on 
when  an  inspection  exception  is  authorized.  Included  in  this  guidance 
will  be  provisions  for  a  short  cut  method  to  permit  depot  personnel  to 
verify  a  type  commander's  decision  that  an  inspection  is  unnecessary 
before  sending  an  aircraft  to  a  depot.  We  agree  that  clarifying  guidance 
is  needed  and  believe  that  it  will  be  helpful  in  making  exception 
decisions. 
Overhauls  Can  Be 
Scheduled  More 
Efficiently 
The  Naval  Aviation  Logistics  Center  could  reduce  the  time  that  P~3s 
spend  waiting  at  the  depots  for  overhauls  by  taking  more  direct  control 
over  the  overhaul  scheduling  process.  Although  aircraft  are  supposed  to 
be  delivered  the  day  before  the  scheduled  overhaul  date,  ineffective 
scheduling  of  overhauls  caused  P-3s  to  sit  outside  the  hangars  awaiting 
overhauls  for  an  average  of  2  weeks  in  fiscal  year  1985.  Increases  in 
turnaround  time  increase  the  total  number  of  aircraft  needed  to  sustain 
the  operational  availability  of  aircraft  to  the  squadrons. 
The  Logistics  Center  is  responsible  for  scheduling  aircraft  overhauls  at 
the  depots.  Through  quarterly  workload  conferences  with  major  com- 
mands and  depots,  it  allocates  projected  overhauls  among  the  depots  on 
a  quarterly  basis.  However,  the  major  commands,  such  as  Naval  Air 
Force,  Atlantic,  and  Naval  Air  Force,  Pacific,  and  their  squadrons  fre- 
quently request  modifications  to  the  quarterly  schedule  before  actually 
delivering  aircraft  to  the  depots.  Logistics  Center  officials  stated  that 
they  attempt  to  discourage  modifications  but  normally  approve  any 
such  requests. 
The  lack  of  adequate  central  control  over  actual  aircraft  deliveries  has 
resulted  in  an  uneven  work  flow  and  inefficiencies.  The  inefficiencies 
result  because  the  depots  are  not  able  to  optimize  the  intervals  between 
incoming  aircraft.  Overhauls  scheduled  at  less  than  optimal  intervals 
cause  aircraft  to  wait  outside  an  overhaul  facility  for  their  turn  to  be 
Page  9 
GAO/NSIAIX87-157  Aircraft  Overhauls
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
overhauled,  while  longer  intervals  cause  workers  to  be  less  productive 
as  they  wait  for  aircraft  to  be  delivered. 
Aircraft  arriving  at  Alameda  experienced  a  considerable  amount  of 
waiting  tinvj  One  reason  for  this  condition  was  that  funds  were  pro- 
vided at  the  end  of  the  fiscal  year  to  perform  additional  overhauls,  but 
Alameda  did  not  have  the  capacity  to  handle  this  workload.  During  the 
last  two  quarters  of  fiscal  year  1985,  Alameda  received  26  P-3s  but  only 
had  a  capacity  to  overhaul  19.  These  aircraft,  which  arrived  at  intervals 
ranging  from  one  every  13  workdays  to  two  on  the  same  day,  had  to 
wait  an  average  of  74  days  before  overhauls  began.  Without  this  waiting 
time,  the  squadrons  would  have  had  the  continued  use  of  those  aircraft 
for  over  2  additional  months. 
Conversely,  Jacksonville  received  18  P-3s  during  the  last  two  quarters 
of  fiscal  year  1985  but  had  a  capacity  to  overhaul  31.  The  aircraft 
arrived  at  intervals  ranging  from  one  every  19  workdays  to  one  every  4 
workdays.  As  a  result,  Jacksonville's  production  line  operated  at  only  58 
percent  of  capacity. 
To  minimize  turnaround  time,  avoid  backlogs,  and  ensure  efficient 
scheduling  of  aircraft  for  overhaul,  the  logistics  Center  needs  to  refine 
each  delivery  date  as  it  approaches  and  determine  the  exact  date  that  an 
aircraft  should  be  delivered  to  a  depot.  Such  factors  as  each  aircraft's 
overhaul  due  date,  a  squadron's  operational  needs,  each  depot's  capac- 
ity to  begin  work  when  the  aircraft  is  delivered,  and  variances  in  work 
required  on  each  aircraft  should  be  considered. 
For  example,  to  avoid  the  backlogs  at  Alameda,  the  Logistics  Center 
could  have  scheduled  more  overhauls  at  Jacksonville.  Or,  since  these 
aircraft  were  still  capable  of  operating,  the  Logistics  Center  could  have 
told  the  squadrons  to  continue  using  the  P-3s  until  an  opening  in  the 
production  line  occurred.  In  fact,  one  P-3  was  pulled  from  the  waiting 
line  and  deployed  to  the  Pacific  Area  because  the  squadron  could  not 
wait  for  the  overhaul. 
In  commenting  on  our  draft  report,  dod  stated  that  the  scheduling  prob- 
lems we  identified  have  been  corrected  and  that  the  Navy  is  placing 
appropriate  emphasis  on  each  depot's  capacity  to  begin  work  and  the 
other  factors  needed  for  efficient  scheduling.  According  to  dod,  all  P-3 
aircraft  are  now  routinely  inducted  for  overhaul  within  24  hours  of 
their  arrival  from  an  operational  unit. 
page  1()  GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
However,  we  found  that  this  was  not  always  the  case.  We  examined  Ala- 
meda's scheduling  records  for  the  period  October  1,  1986,  to  April  15, 
1987.  We  found  that  5  of  12  P-3  aircraft  received  during  that  period 
waited  more  than  24  hours  to  be  inducted.  The  average  wait  time  was  7 
days,  which  is  an  improvement  over  fiscal  year  1985.  For  all  aircraft 
received  at  Alameda  during  that  period,  we  found  that  21  of  39  aircraft 
waited  more  than  24  hours  to  be  inducted.  The  average  wait  time  was  15 
days.  The  above  data  indicate  to  us  that  scheduling  problems  still  exist 
and  the  Navy  continues  to  need  to  give  more  attention  to  solving  these 
problems. 
Labor  Resources  Can 
Be  Applied  More 
Efficiently 
Depots  can  reduce  turnaround  time  by  concentrating  their  available 
labor  forces  on  fewer  aircraft.  Currently,  the  depots  spread  available 
workers  over  as  many  aircraft  as  they  can  fit  into  the  production  line.  If 
the  depots  were  to  concentrate  their  workers  on  fewer  aircraft,  they 
could  finish  work  on  each  aircraft  sooner  and,  over  time,  complete  just 
as  many  aircraft.  Since  the  depots  apply  labor  on  a  predominately 
single-shift  basis,  considerable  flexibility  exists  for  using  limited  second 
shifts  in  those  cases  where  work  space  becomes  a  constraining  factor  in 
achieving  optimum  concentration  of  resources. 
The  following  hypothetical  example  illustrates  how  labor  can  be  concen- 
trated to  reduce  turnaround  time.  Assume  that  an  aircraft  repair  facility 
has  20  workers,  it  takes  8,000  direct  labor  hours  to  overhaul  an  aircraft 
(not  the  P-3),  each  worker  works  an  8-hour  day,  and  two  aircraft  need 
overhauling.  As  the  Navy  typically  operates,  both  aircraft  are  brought 
into  the  depot  on  day  1  and  10  workers  are  assigned  to  each  aircraft.  At 
the  rate  of  80  hours  of  labor  a  day  (10  workers  working  8  hours),  each 
aircraft  takes  about  100  workdays  to  overhaul. 
Instead,  the  repair  facility  could  bring  in  aircraft  A  on  day  1  and  apply 
all  20  workers  to  that  aircraft.  At  the  rate  of  160  direct  labor  hours  each 
day  (20  workers  working  8  hours),  aircraft  A  could  be  returned  to  ser- 
vice on  workday  50.  Aircraft  B,  which  remained  in  operation  while  air- 
craft A  was  being  overhauled,  could  then  be  brought  into  the  depot, 
overhauled  in  50  days,  and  returned  to  service  on  workday  100.  Each 
aircraft  would  be  in  the  depot  for  50  days.  Or,  if  space  is  inadequate  for 
all  20  workers  to  work  on  an  aircraft  at  a  time,  up  to  10  workers,  which 
could  not  be  applied  on  the  first  shift,  could  work  a  second  shift  to 
achieve  160  direct  labor  hours  per  day,  thereby  accomplishing  an  8,000- 
hour  overhaul  in  50  workdays.  Again,  aircraft  B  would  remain  in  service 
until  workday  51  and  each  aircraft  would  be  in  the  depot  only  50 
Page  11 
GAO/NSIAD-87-157  Aircraft  Overhauls
ApiMMidix  I 
Planning  fur  P-3  Aircraft  Overhauls 
workdays.  The  overall  rate  of  production,  however,  would  be 
unchanged.  At  the  end  of  100  workdays,  two  aircraft  would  be 
overhauled — regardless  of  which  procedure  is  used.  But  concentrating 
labor  allows  each  plane  to  minimize  its  time  at  the  depot. 
This  hypothetical  example  does  not  include  certain  practical  complexi- 
ties, such  as  specialization  among  Navy  workers.  Nevertheless,  the  prin- 
ciples of  concentrating  existing  labor  resources  on  fewer  aircraft  are 
applicable  in  practice. 
One  actual  example  where  applying  more  personnel  on  fewer  aircraft 
could  reduce  turnaround  time  involves  the  repair  of  fuel  tanks.  Jackson- 
ville's overhaul  plan  for  pressure  testing  and  repairing  P-3  fuel  tanks 
calls  for  two  metalworkers  to  complete  the  task  in  8  workdays.  This  is  a 
critical  task — an  aircraft  cannot  move  to  the  next  step  in  the  process 
until  a  fuel  tank  has  been  repaired.  By  transferring  an  additional  two 
metalworkers  from  noncritical  tasks  to  the  fuel  tank  task,  4  of  the  60 
metalworkers  on  the  P-3  production  line  could  be  assigned  to  complete 
this  task.  Jacksonville  then  could  halve  the  time  required  to  test  and 
repair  each  tank,  saving  4  workdays  in  overhauling  the  P-3.  The  noncrit- 
ical tasks  subsequently  could  be  done  concurrently  with  other  overhaul 
tasks. 
At  Alameda,  similar  opportunities  exist.  Alameda  has  seven  P-3  work- 
stations on  its  production  line.  When  the  production  line  is  full,  evalua- 
tion engineers  are  working  on  one  to  two  aircraft,  metalworkers  are 
working  on  two  to  three  aircraft,  and  mechanical  and  electrical  workers 
are  working  on  three  aircraft.  By  redistributing  its  workers,  Alameda 
could  reduce  turnaround  time  by  50  percent  or  more.  For  example,  the 
metalworkers  in  the  structural  tanks  and  structural  fuselage  shops  work 
on  two  to  three  aircraft  for  16  workdays  to  complete  their  portions  of 
the  overhaul.  If  the  metalworkers  were  combined  to  work  on  one  air- 
craft, using  two  shifts  if  workspace  were  a  constraining  factor,  struc- 
tural tanks  could  be  finished  in  4  workdays  and  structural  fuselage  in 
another  4  workdays,  thereby  reducing  turnaround  time  by  8  workdays. 
The  same  potential  exists  for  reducing  the  time  required  for  the  other 
shops. 
To  estimate  the  overall  potential  for  speeding  up  the  entire  overhaul 
process  at  Alameda,  we  assumed  that  all  of  the  existing  labor  resources 
could  similarly  be  concentrated  on  four  aircraft  instead  of  the  current 
seven  aircraft.  This  action  would  reduce  the  number  of  workdays 
Page  12  GAO/NSIAW7-157  Aircraft  Overhaul*
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
required  to  perform  the  production  line  tasks  from  56  to  32  workdays 
per  aircraft. 
We  asked  Navy  officials  about  the  advantages  and  disadvantages  of 
concentrating  existing  labor  resources  on  fewer  aircraft.  They  stated 
that  this  action  would  reduce  turnaround  time  and  achieve  other  effi- 
ciencies, such  as  increased  utilization  of  equipment.  Disadvantages  cited 
include  less  flexibility  to  react  to  unexpected  requirements,  shift  effi- 
ciency degradation  if  multiple  shifts  are  used,  and  increased  costs  for 
pay  differentials  if  multiple  shifts  are  needed.  The  officials  stated  that 
multiple  shifts  already  are  used  to  a  limited  extent  in  operations  where 
facility,  environmental,  or  process  constraints  exist.  In  addition,  we 
found  that  depots  concentrate  labor  resources  on  an  individual  aircraft 
when  an  expedite  order  is  received  on  that  aircraft. 
In  its  comments,  dod  stated  that  presently  there  are  limitations  on  how 
much  overhaul  turnaround  times  can  be  reduced  by  concentrating  labor 
resources  without  first  taking  action  to  improve  material  availability. 
dod  stated  that  the  depots  have  embarked  upon  a  series  of  initiatives 
aimed  at  ensuring  that  aircraft  production  lines  are  operated  effectively 
and  efficiently.  One  of  these  initiatives  is  focused  on  improving  material 
availability.  According  to  dod,  when  fully  implemented,  all  of  these  ini- 
tiatives are  expected  to  achieve  the  results  we  desire. 
We  agree  that  implementing  these  initiatives  should  improve  depot  oper- 
ations. However,  none  of  the  initiatives  deal  with  concentrating  labor 
resources  on  fewer  aircraft.  We  believe  that,  once  the  material  availabil- 
ity initiative  is  far  enough  along,  a  concentration  of  labor  resources  initi- 
ative should  be  undertaken  to  bring  about  further  improvements. 
Depots  Have  Excess 
Overhaul  Capacity 
The  Navy  has  more  production  capacity  than  it  needs  to  overhaul  P-3 
aircraft  through  the  year  2005.  This  excess  capacity  results  in  redun- 
dancies and  causes  unnecessary  duplication  in  such  areas  as  spare  parts, 
supplies,  and  equipment,  as  well  as  in  management,  administrative,  and 
other  support  costs. 
Department  of  Defense  Directive  4151.1  provides  guidance  for  sizing 
maintenance  facilities.  The  directive  states  that  a  facility  should  be 
large  enough  to  accomplish  100  percent  of  the  projected  peacetime 
workload  on  a  single-shift,  40-hour  work  week  basis. 
Page  13 
GAO/NSIAD-87-157  Aircraft  Overhauls
Table  1.1:  Annual  P-3  Overhaul  Capacity 
Ai>|K'iulix  1 
I'laitniuft  for  P-3  Aircraft  Overhauls 
The  annual  single-shift  capacities  of  the  three  depots  that  overhaul  P-3 
aircraft  are  shown  in  table  1. 1 . 
Number  of 
Depot 
  aircraft 
Alameda 
Jacksonville 
Lake  City        
 ' 
Total  ~    «4 
Operating  differences  at  the  depots  may  cause  some  changes  in  the 
single-shift  capacities  shown. 
The  anticipated  workload  is  considerably  less  than  the  single-shift 
capacity  of  the  depots.  According  to  Deputy  Chief  of  Naval  Operations 
(Air  Warfare)  officials,  the  projected  P-3  overhaul  workload  for  fiscal 
years  1987  to  1992  ranges  from  79  to  99  aircraft.  This  workload  repre- 
sents 59  to  74  percent  of  the  minimum  single-shift  capacity  of  134  air- 
craft. Since  Navy  officials  have  stated  that  the  P-3  force  is  expected  to 
remain  at  current  levels  through  2005,  none  of  the  excess  capacity 
appears  to  be  needed  to  meet  increased  levels  of  overhauls  throughout 
the  remainder  of  this  century. 
In  December  1986,  Naval  Aviation  Logistics  Center  officials  told  us  that 
the  Lake  City  contract  had  been  terminated  because  performance  was 
unsatisfactory.  They  stated  that  they  were  seeking  another  contractor 
to  perform  P-3  overhauls,  starting  as  early  as  the  third  quarter  of  fiscal 
year  1987. 
In  commenting  on  our  draft  report,  dod  stated  that  there  is  no  excess  P-3 
overhaul  capacity  at  the  Alameda  and  Jacksonville  depots,  dod  indi- 
cated that  capacity  should  be  expressed  in  terms  of  direct  labor  hours, 
not  in  numbers  of  units  produced.  We  used  the  number  of  P-3  aircraft 
that  could  be  overhauled  as  the  capacity  because  that  was  the  way  the 
capacity  information  was  presented  to  us  by  the  Deputy  Chief  of  Naval 
Operations  (Logistics).  However,  this  capacity  can  be  converted  to  direct 
labor  hours  by  applying  labor  hour  norms  established  by  the  Navy  for 
individual  P-3  overhauls.  This  conversion  results  in  a  combined  P-3 
capacity  of  901,000  direct  labor  hours  for  the  Alameda  and  Jacksonville 
depots.  The  capacity  is  considerably  larger  than  the  maximum  projected 
Page  14  GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  I 
Planning  for  P-3  Aircraft  Overhauls 
workload  of  637,000  direct  labor  hours  cited  in  dod's  comments.  Fur- 
ther, dod's  comments  did  not  recognize  the  capacity  of  the  third  P-3  pro- 
duction line  to  be  established  at  a  commercial  depot.  Therefore,  it 
appears  that  a  significant  amount  of  excess  P-3  capacity  will  continue  to 
exist. 
Page  15  GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  II 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Note:  GAO  comments 
supplementing  those  in  the 
report  text  appear  at  the 
end  of  this  appendix. 
ASSISTANT  SECRETARY  OF  DEFENSE 
WASHINGTON.  D  C      Z030IB000 
Production  &  Logistics 
L(MD) 
af-c  ;>>!  m: 
Mr.  Frank  C.  Conahan 
Assistant  Comptroller  General 
National  Security  and  International 
Affairs  Division 
U.S.  General  Accounting  Office 
Washington,  DC  20548 
Dear  Mr.  Conahan: 
This  is  the  Department  of  Defense  (DoD)  response  to  the 
General  Accounting  Office  (GAO)  Draft  Report,  "NWY  MAINTENANCE: 
Planning  For  P-3  Aircraft  Overhauls  Can  Be  Improved,"  dated 
January  21,  1987  (GAO  Code  394086,  OSD  Case  7214). 
With  the  exception  of  the  excess  capacity  issue,  the 
Department  generally  agrees  with  the  GAO  findings  and 
recommendations  and  notes  that  actions  have  already  been  taken  or 
are  underway. 
The  detailed  DoD  comments  on  each  finding  and  recommendation 
are  provided  in  the  enclosure.   Thank  you  for  the  opportunity  of 
commenting  on  the  draft  report. 
Sincerely, 
Robert  B.  Costello 
Enclosure 
Page  16 
GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  II 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Now  on  pp.  1, 7, 8,  and  9. 
GAO  DRAFT  REPORT  -  DATED  JANUARY  21,  1987 
(GAO  CODE  394086)   OSD  CASE  7214 
"NAVY  MAINTENANCE:   PLANNING  FOR  P-3  AIRCRAFT  OVERHAULS 
CAN  BE  IMPROVED" 
DEPARTMENT  OF  DEFENSE  COMMENTS 
***** 
FINDINGS 
FINDING  A;   Inspections  Needed  To  Ensure  Overhauls  Are 
Necessary.  The  GAO  reported  that  the  Navy  has  established 
the  Aircraft  Service  Period  Adjustment  (ASPA)  program  to 
inspect  aircraft  before  they  are  due  for  overhaul  to 
determine  whether  overhauls  can  be  deferred  for  12  months. 
The  GAO  found  that  between  January  1984  (when  inspections  of 
P-3  aircraft  began  under  the  ASPA  program)  and  December 
1985,  depot  engineers  inspected  152  aircraft  and  85  aircraft 
(56  percent)  were  given  12  additional  months  to  continue  in 
operation  without  overhaul.  The  GAO  also  found,  however, 
that  squadrons  forwarded  68  P-3s  to  depots  during  FY  1985, 
35  without  assurance  that  an  overhaul  was  needed.  The  GAO 
reported  that  it  asked  command  officials  why  they  did  not 
request  pre-overhaul  inspections  on  all  P-3  aircraft,  and 
were  told  that  the  aircraft  were  in  such  obvious  need  of 
overhaul,  an  inspection  would  be  a  waste  of  funds. 
According  to  the  GAO,  however,  depot  officials  stated  that 
the  squadrons  lack  the  expertise  to  decide  whether  an 
overhaul  is  necessary  and  that  depot  personnel  are  much 
better  qualified  to  make  this  judgement.  The  GAO  pointed 
out  that,  according  to  the  Alameda  Naval  Air  Rework 
Facility,  the  cost  of  an  ASPA  program  inspection  is 
approximately  $6000.  The  GAO  observed  that,  in  contrast, 
the  average  cost  of  an  overhaul  is  about  $715,000.   The  GAO 
calculated,  therefore,  that  if  inspections  had  been  required 
and  the  historic  rate  of  overhaul  deferrals  (56  percent)  had 
been  achieved:   (1)  20  of  the  35  aircraft  would  have  passed 
inspection  and  remained  ia  the  squadron  for  another  year  and 
(2)  the  Navy  would  have  saved  over  $14  million  in  overhaul 
costs  in  FY  1985,  if  the  20  aircraft  had  not  been  overhauled 
(20  times  the  difference  between  the  cost  of  overhaul, 
$715,000,  and  the  cost  of  inspection,  $6,000).   The  GAO 
concluded  that  the  Navy  could  reduce  both  aircraft 
procurement  requirements  and  overhaul  costs  by  performing 
more  inspections  to  determine  if  overhauls  are  necessary. 
The  GAO  further  concluded  that  even  if  only  one  inspection 
in  100  resulted  in  deferring  an  overhaul,  the  Navy  would 
save  funds  because  the  $6,000  inspection  cost  is  less  than 
one  percent  of  overhaul  cost.   (pp.  1-2,  pp.  9-12/GAO  Draft 
Report) 
Page  17 
4       GAO/NSIAIV87157  Aircraft  Overhauls
Appendix  II 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
See  comment  1 . 
DoD  Response:   Partially  concur.   An  analysis  of  the  35 
P-3  aircraft,  which  the  GAO  reported  were  forwarded  to 
depots  during  FY  1985  without  receiving  an  ASPA  inspection 
prior  to  induction,  shows  the  following: 
seven  did  receive  an  ASPA  inspection  and  were  not 
deferred; 
six  received  major  aircraft  modifications  and 
therefore,  were  exempt  from  ASPA; 
four  did  not  come  under  the  ASPA  program  until  after 
their  date  of  induction  and,  therefore,  were  exempt 
from  ASPA; 
four  had  been  extended  when  the  ASPA  program 
commenced  and,  therefore,  were  exempt  from  ASPA; 
nir.e  aircraft  were  in  poor  material  condition  and 
the  type  commander  used  appropriate  judgement  in 
exempting  them  from  an  ASPA  inspection; 
-  two  aircraft  were  needed  to  facilitate  stand  up  of 
new  squadrons  and  the  type  commander  used 
appropriate  judgement  in  exempting  them  from  an  ASPA 
inspection; 
-  two  were  needed  to  satisfy  special  operational 
requirements  and  the  type  commander  used  appropriate 
judgement  in  exempting  them  from  an  ASPA  inspection; 
and 
-  one  was  exempted  by  a  type  commander  for  safety 
considerations. 
As  shown  by  the  analysis,  there  are  valid  reasons  why 
some  aircraft  were  not  inspected.   Accordingly,  the 
Department  cannot  agree  that  20  of  the  35  aircraft  would 
have  passed  inspection  and  remained  in  the  squadron  for 
another  year.  As  a  result,  the  Department  also  cannot  agree 
that  the  Navy  would  have  saved  $14  million  in  overhaul  costs 
in  FY  1985. 
The  Department  also  points  out  that:   (1)  a  more 
accurate  estimate  of  the  cost  of  an  inspection  is  $15,000, 
including  the  labor  hours  expended  by  organizational-level 
and  depot-level  personnel  in  the  fix-phase  of  an  ASPA 
inspection  and  (2)  the  P-3  aircraft  inventory  is  not  and 
never  has  been  sufficient  to  meet  both  operational  and 
maintenance  pipeline  requirements.   Hence,  any  reductions  to 
Page  *8 
GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  n 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Now  on  pp.  1,6,9, 10,  and  11. 
Navy  procurement  budgets,  as  long  as  these  shortages  exist, 
would  be  detrimental. 
s   Overhauls  Can  Be  Scheduled  More  Efficiently. 
>ted  that  the  Naval  Aviation  Logistics  Center  is 
FINDING  B; 
The  GAO  notcu  uuau  me  navai  (tviation  jjogiscics  center  is 
responsible  for  scheduling  aircraft  overhauls  at  the  depots. 
The  GAO  observed  that,  through  quarterly  workload 
conferences  with  major  commands  and  depots,  the  Center 
allocates  projected  overhauls  among  the  depots  on  a 
quarterly  basis.   According  to  the  GAO,  aircraft  are 
supposed  to  be  delivered  the  day  before  the  scheduled 
overhaul  date.   The  GAO  found,  however,  that  the  major 
commands  and  their  squadrons  frequently  request 
modifications  to  the  quarterly  schedule  before  actually 
delivering  aircraft  to  the  depots  and  the  Logistics  Center 
routinely  approves  them.   The  GAO  also  found  that  the  lack 
of  adequate  central  control  over  actual  aircraft  deliveries 
has  resulted  in  haphazard  work  flow  and  inefficiencies. 
Specifically,  the  GAO  found  that  during  the  last  two 
quarters  of  FY  1985s   (1)  the  Alameda  depot  received  26  P-3s 
but  only  had  a  capacity  to  overhaul  19  —  causing  an  average 
wait  of  74  days  before  starting  the  overhaul;  and  (2)  the 
Jacksonville  depot  received  18  P-3s  but  had  a  capacity  to 
overhaul  31 — causing  the  production  line  to  operate  at  only 
58  percent  of  capacity.   The  GAO  found  that  ineffective 
scheduling  of  overhauls  caused  P-3s  to  sit  outside  the 
hangar  awaiting  overhaul  for  an  average  of  14  days  in  FY 
1985.   The  GAO  observed  that  the  Navy  purchases  a  number  of 
aircraft  beyond  those  it  needs  to  have  in  operation  at  a 
given  time  to  compensate  for  the  time  aircraft  spend  in  a 
depot.  The  GAO  further  observed  that  as  the  time  spent  in  a 
depot  increases  (turnaround  time),  the  total  number  of 
aircraft  needed  to  sustain  operations  increases.   According 
to  the  GAO,  if  the  average  turnaround  time  increased  by  3.5 
days  for  the  P-3,  one  additional  aircraft  would  have  to  be 
purchased  at  a  cost  of  $36  million  to  assure  that  the 
average  number  of  operational  aircraft  did  not  decrease.   In 
total  therefore,  the  GAO  calculated  that  the  14  day  awaiting 
time  equates  to  an  additional  four  aircraft  (14  days  divided 
by  3.5  days)  at  a  cost  of  $144  million  (4  times  $36  million). 
The  GAO  concluded,  therefore,  that  the  Navy  could  reduce 
both  aircraft  procurement  requirements  and  overhaul  costs  by 
scheduling  overhauls  more  efficiently.   The  GAO  further 
concluded  that  the  Logistics  Center  needs  to  refine  the 
aircraft  overhaul  delivery  date  as  it  approaches  and 
determine  the  exact  date  that  an  aircraft  should  be 
delivered  to  a  depot,  with  the  following  factors  taken  into 
considerations   (1)  each  aircraft's  overhaul  due  date,  (2) 
each  squadron's  operational  needs,  (3)  each  depot's  capacity 
to  begin  work  when  the  aircraft  is  delivered,  and  (4) 
variances  in  work  required  on  each  aircraft.   (pp.  1-2, 
pp.  7-8,  pp.  12-15/GAO  Draft  Report) 
Page  19 
GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  II 
Conwentt  From  the  Assistant  Secretary  of 
Defence  (Production  and  Logistic*) 
DoD  Response;   Partially  concur.   As  the  GAO  noted, 
during  FY  1985  there  was  a  problem  at  NARF  Alameda,  which 
resulted  in  more  aircraft  arriving  than  could  be  overhauled. 
The  impact  was  lessened  by  diverting  Alameda  scheduled  P-3s 
to  NARF  Jacksonville.   Consequently,  backlogs  were 
eliminated  within  six  months.  Currently,  all  P-3  aircraft 
are  routinely  inducted  within  24  hours  of  their  arrival  from 
the  operational  unit.   If  the  unusually  long  turnaround  time 
experienced  at  Alameda  during  FY  1985  had  introduced  a 
significant  error  in  the  computation  of  the  annual 
procurement  requirements  for  all  types  of  Navy  P-3  aircraft, 
it  would  be  appropriate  to  reduce  P-3  procurements  as 
recommended  by  the  GAO.   However,  this  was  not  the  case. 
The  Department  also  points  out  that  P-3  aircraft 
procurements  have  never  been  adequate  to  fill  all 
operational,  training  and  maintenance  requirements. 
Therefore,  when  a  P-3  goes  into  overhaul,  the  losing 
activity  is  forced  to  operate  below  its  authorized  level  of 
P-3  aircraft. 
FINDING  C:  Labor  Resources  Can  Be  Applied  More 
Efficiently.   The  GAO  reported  that  currently,  the 
overhaul  depots  (1)  spread  available  workers  over  as  many 
aircraft  as  can  fit  into  the  production  line,  and  (2)  apply 
labor  on  a  predominately  single-shift  basis.   The  GAO 
described  a  hypothetical  example  wherein  (1)  more  workers 
would  be  assigned  at  the  same  time  to  fewer  aircraft  to 
reduce  overhaul  time  while  at  the  same  time  keeping  other 
aircraft  operational,  or  alternatively  (2)  workers  could  be 
assigned  on  first  and  second  shifts  to  achieve  the  same 
goals  if  the  workers  could  not  work  on  the  same  aircraft  at 
the  same  time.  The  GAO  recognized  the  hypothetical  example 
does  not  include  certain  practical  complexities,  such  as 
specialization  among  Navy  workers,  but  the  GAO  reported  two 
specific  examples  of  potential  opportunities  to  reduce 
overhaul  time,  as  follows: 
at  Jacksonville,  combining  metalworkers  who  perform 
noncritical  tasks  with  those  who  repair  P-3  fuel  tanks 
would  save  4  workdays  for  such  repairs;  and 
-  at  Alameda,  reassigning  metalworkers  from  working  on  two 
to  three  aircraft  to  working  on  one  aircraft  would  save 
eight  workdays  in  the  structural  tanks  shop  and 
structural  fuselage  shops. 
Page  20  GAO/NSIAIW7-157  Aircraft  Overhauls
Appendix  II 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Now  on  pp.  1,2,6,11,12, 
and  13. 
According  to  the  GAO,  the  same  potential  exists  for  reducing 
the  time  required  for  other  shops.   The  GAO  estimated  the 
overall  potential  for  speeding  up  the  entire  overhaul 
process  at  Alameda  by  assuming  that  all  existing  labor 
resources  could  be  concentrated  on  four  aircraft  instead  of 
the  current  production  line  capacity  of  seven  aircraft.   The 
GAO  calculated  that  24  workdays  would  be  saved,  which 
equates  to  36  calendar  days.   The  GAO  observed  that  the  Navy 
purchases  aircraft  beyond  those  it  needs  to  have  in 
opera!- ion  to  compensate  for  the  time  aircraft  spend  in  a 
depot.  The  GAO  further  observed  that  as  the  time  spent  in  a 
depot  increases  (turnaround  time),  the  total  number  of 
aircraft  needed  to  sustain  operations  increases.  According 
to  the  GAO,  if  the  average  turnaround  time  increased  by  3.5 
days  for  a  P-3,  one  additional  aircraft  would  have  to  be 
purchased  at  a  cost  of  $36  million  to  assure  that  the 
average  number  of  operational  aircraft  did  not  decrease. 
The  GAO  concluded  that  (1)  10  fewer  aircraft  (36  days 
divided  by  3.5  days)  would  have  to  be  procured  because  they 
would  be  available  for  operations  rather  than  being  tied-up 
at  the  depot  undergoing  overhaul,  and  (2)  these  10  aircraft 
represent  $360  million  in  savings  (10  times  $36  million). 
The  GAO  further  concluded  that  the  Navy  could  reduce  both 
aircraft  procurement  requirements  and  overhaul  costs  by 
concentrating  labor  resources  on  fewer  aircraft.   <pp«  1-3, 
pp.  7-8,  pp.  15-18/GAO  Draft  Report) 
DoD  Response;  Partially  concur.   The  P-3  aircraft 
inventory  shortfalls  (discussed  in  Finding  B)  provide  a 
large  incentive  to  the  air  rework  facilities  to  reduce  the 
turnaround  time  wherever  possible  to  return  much  needed 
aircraft  to  fleet  users  as  quickly  as  possible.  For 
example,  the  air  rework  facilities  already  do,  as  suggested 
by  the  GAO,  apply  labor  concentrations  at  potential  choke 
points.  For  instance,  NARF  Alameda  currently  runs  a 
three-shift  operation  in  the  paint  shop,  and  two  12-hour 
shifts  in  the  flight  test  area  to  prevent  these  two  work 
areas  from  becoming  bottlenecks.   However,  there  are 
limitations  on  how  much  turnaround  time  can  be  reduced  by 
taking  measures  involving  labor  resources  alone.  For 
example,  the  "critical  driver"  on  the  P-3  is  the  main 
landing  gear.   Its  80-day  turnaround  time  exceeds  that  of 
the  air  frame  by  7  days,  thus  limiting  the  value  of  any 
turnaround  reduction  on  the  airframe  rework.   A  Naval  Air 
Rework  Facilities  management  analysis  was  completed  in 
February  1986.  As  a  result,  the  NARFs  have  embarked  upon  a 
series  of  initiatives  aimed  at  ensuring  that  aircraft 
production  lines  are  operated  effectively  and  efficiently. 
One  of  these  is  focused  on  improving  material  availability 
to  reduce  cannibalization  and  back-robbing.   When  fully 
implemented,  all  of  these  initiatives  are  expected  to 
achieve  the  results  desired  by  the  GAO,  as  well  as  make  each 
NARF  more  competitive. 
Page  21 
GAO/NSLAD-87-157  Aircraft  Overhauls
Appendix  II 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Now  on  pp.  1,2,13,14, 
and  15. 
FINDING  D:   Depots  Have  Excess  Overhaul  Capacity.   The 
GAO  reported  DoD  Directive  4151.1  states  that  a  depot 
facility  should  be  large  enough  to  accomplish  100  percent  of 
the  projected  peacetime  workload  on  a  single-shift,  40-hour 
work-week  basis.   According  to  the  GAO,  the  annual 
single-shift  capacity  totals  134  aircraft  for  the  three 
depots  that  overhaul  P-3  aircraft:   28  for  Alameda,  66  for 
Jacksonville  and  40  for  Lake  City.   The  GAO  pointed  out, 
however,  that  according  to  officials  in  the  Office  of  the 
Deputy  Chief  of  Naval  Operations  (Air  Warfare)  the  projected 
P-3  overhaul  workload  for  FY  1987  to  FY  1992  ranges  from  79 
to  99  aircraft.  The  GAO  noted  that  in  December  1986, 
Logistics  Center  officials  told  the  GAO  that  the  contract  to 
perform  P-3  overhauls  at  Lake  City  had  been  terminated 
because  performance  was  unsatisfactory.  The  GAO  further 
noted,  however,  these  Center  officials  also  stated  that  they 
were  seeking  another  contractor  to  perform  P-3  overhauls, 
starting  as  early  as  the  second  quarter  of  FY  1987.  The  GAO 
also  pointed  out  that  Navy  officials  have  stated  that  the 
P-3  force  is  expected  to  remain  at  present  levels  through 
2005.  The  GAO  concluded  that  the  Navy  has  more  production 
capacity  than  it  currently  needs,  and  that  none  of  the 
excess  capacity  appears  to  needed  through  the  year  2005. 
The  GAO  further  concluded  that  this  excess  capacity  results 
in  extensive  redundancies  and  causes  unnecessary  duplication 
in  such  areas  as  spare  parts,  supplies,  and  equipment,  as 
well  as  in  management,  administrative,  and  other  support 
costs,   (p.  1,  p.  3,  pp.  19-20/GAO  Draft  Report) 
DoD  Response;  Nonconcur.  DoD  4151. 15-H,  the  "Depot 
Maintenance  Production  Shop  Capacity  Measurement  Handbook", 
provides  guidance  and  procedures  for  a  common  methodology  to 
measure  capacity  in  the  DoD  depot  maintenance  activities. 
Using  the  handbook,  capacity  is  expressed  in  terms  of  direct 
labor  hours,  not  in  numbers  of  units  produced,  as  the  GAO 
has  done.   The  table  below  summarizes  total  P-3  aircraft 
workload  (expressed  in  labor  hours)  including  SDLM, 
conversions,  repairs  and  conversions  planned  for  organic 
accomplishment  during  FY  1986  through  FY  1989.  The  data 
indicate  that  P-3  workload  increases  34  percent  from  FY  1986 
to  FY  1989.  The  table  below  also  shows  that  overall 
airframe  workload  planned  for  NARFs  Alameda  and  Jacksonville 
increases  25  percent  during  this  period.  Further,  P-3 
workload  as  a  percent  of  the  total  airframe  workload  at 
these  NARFs,  increases  from  23  percent  in  FY  1986  to  27 
percent  in  FY  1989.   Hence,  the  Department  does  not  agree 
that  there  is  any  excess  P-3  overhaul  capacity  at  these  two 
NARFs. 
Page  22 
GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  O 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Now  on  p  2. 
TOTAL  AIRFRAME 
and  P-3  WORKLOAD 
at  NARFs  ALAMEDA  AND  JACKSONVILLE 
(in  thousands  of  labor  hours) 
FISCAL  YEAR 
1986 
1987 
1988 
1989 
Total  Airframe 
2,099 
2,151 
2,270 
2,380 
P-3  Only 
473 
480 
561 
637 
P-3  Workload  as 
a  Percent  of 
Total 
FINDING  E:   Applicability 
of 
Procedural Changes To  Other 
Aircraft.  The  GAO observed that  the 
P- 
■3  aircra ft  has  one 
of  the  shortest  overhaul  turnaround  times  among  Navy 
aircraft  and  any  procedural  changes  to  reduce  that  time 
could  have  applicability  to  other  aircraft,  particularly 
those  with  longer  turnaround  times.  The  GAO  indicated  that 
the  Secretary  of  the  Navy  should  determine  the  feasibility 
of  implementing  for  other  aircraft,  as  follows: 
-  require  all  aircraft  be  inspected  to  determine  if 
overhauls  are  needed; 
-  schedule  deliveries  of  aircraft  for  overhaul  to  coincide 
with  a  depot's  ability  to  work  on  that  aircraft; 
-  reduce  overhaul  time  by  combining  labor  on  fewer 
aircraft;  and 
-  eliminate  excess  aircraft  overhaul  capacity,   (p.  4/GAO 
Draft  Report) 
DoD  Response:  Partially  Concur.  There  are  valid 
reasons  why  some  aircraft  are  not  inspected  (as  discussed  in 
the  DoD  response  to  Finding  A).   The  Department  will, 
however,  ensure  that  explicit  guidelines  are  in  place  to 
clarify  program  exception  policies.   In  the  Department's 
view,  scheduled  deliveries  of  aircraft  for  overhaul  already 
coincide,  for  the  most  part,  with  each  NARF's  ability  to 
work  on  that  aircraft.  For  example,  the  P-3  aircraft  is 
inducted  within  24  hours  after  aircraft  arrival.  The  air 
rework  facilities  already  apply  labor  concentrations  at 
Page  23 
GAO/NSIAD-87-167  Aircraft  Overhauls
Appendix  II 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Now  on  p.  2. 
Now  on  p.  2. 
Now  on  p.  2. 
potential  choke  points?  however,  at  this  time  there  are 
limitations  on  how  much  turnaround  times  can  be  reduced 
without  first  taking   action  to  improve  material 
availability.   Initiati-ss  have  been  undertaken  to  improve 
this  area.   Finally  (as  discussed  in  the  DoD  response  to 
Finding  D),  the  Department  does  not  agree  that  there  is  any 
excess  overhaul  capacity  in  the  NARF  community. 
RECOMMENDATIONS 
RECOMMENDATION  1;   The  GAO  recommended  that  the 
Secretary  of  the  Navy  require  that  all  P-3  aircraft  due  for 
overhaul  be  inspected  under  the  Aircraft  Service  Period 
Adjustment  program.   (p.  3/GAO  Draft  Report) 
DoD  Response:  Partially  concur.  There  are  good  reasons 
for  an  aircraft  not  to  receive  an  ASPA  inspection  in  every 
case,  prior  to  overhaul.   Accordingly,  the  Department  does 
not  require  all  aircraft  to  arbitrarily  receive  an  ASPA 
inspection  regardless  of  circumstances.  Rather,  the 
Department  allows  the  type  commanders  some  operational 
flexibility.  However,  the  Department  will  clarify  the 
policy  guidance  contained  in  OPNAVINST  3110.11  that  pertains 
to  when  an  inspection  exception  is  authorized.   Included  in 
this  revision  will  be  provisions  for  a  "short-cut"  method  to 
permit  depot  personnel  to  verify  a  type  commander's  decision 
that  an  ASPA  inspection  is  unnecessary  before  sending  an 
aircraft  to  the  depot.  This  action  is  expected  to  be 
completed  by  June,  1988. 
RECOMMENDATION  2;   The  GAO  recommended  that  the 
Secretary  of  the  Navy  direct  the  Naval  Aviation  Logistics 
Center  to  assume  a  more  active  role  in  coordinating  actual 
deliveries  of  P-3  aircraft  for  overhaul,  so  each  aircraft 
can  be  scheduled  on  a  specific  date  to  coincide  with  a 
depot's  ability  to  begin  work  on  that  aircraft,   (p.  3/GAO 
Draft  Report). 
DoD  Response:  Partially  concur.   Actions  were  taken  to 
correct  the  scheduling  problems  reported  by  the  GAO  and 
the  Navy  is  placing  appropriate  emphasis  on  each  aircraft's 
overhaul  due  date,  each  squadron's  operational  needs,  each 
depot's  capacity  to  begin  work,  and  variances  in  work 
required  on  each  aircraft.  Currently,  all  P-3  aircraft  are 
routinely  inducted  within  24  hours  of  their  arrival  from  the 
operational  unit. 
RECOMMENDATION  3;  The  GAO  recommended  that  the 
Secretary  of  the  Navy  explore  opportunities  to  reduce 
overhaul  turnaround  time  by  concentrating  labor  resources  at 
the  depots  on  as  few  P-3  aircraft  as  possible,   (p.  4/GAO 
Draft  Report). 
Page  24 
GAO/NSIAD-87-157  Aircraft  Overhauls
Appendix  D 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
Now  on  p.  2. 
Now  on  p.  2. 
DoD  Response:  Partially  concur.   At  the  present  time, 
there  are  limitations  on  how  much  turnaround  times  can  be 
reduced  by  taking  measures  involving  labor  resources  alone. 
A  Naval  Air  Rework  Facilities  management  analysis  was 
completed  in  February  1986.  As  a  result,  the  NARFs  have 
embarked  upon  a  series  of  initiatives  aimed  at  ensuring  that 
aircraft  production  lines  are  operated  effectively  and 
efficiently.  One  of  these  is  focused  on  improving  material 
availability  to  reduce  cannibalization  and  back-robbing. 
When  fully  implemented,  all  of  these  initiatives  are 
expected  to  achieve  the  results  desired  by  the  GAO,  as  well 
as  make  each  NARF  more  competitive. 
RECOMMENDATION  4:   The  GAO  recommended  that  the 
Secretary  of  the  Navy  examine  v?ays  to  eliminate  excess  P-3 
aircraft  overhaul  capacity  at  the  depots,  perhaps  by  closing 
one  of  the  P-3  aircraft  production  lines.   (p.  4,  GAO  Draft 
Report). 
DoD  Response;  Nonconcur.  The  Department  does  not  agree 
that  there  is  any  "excess"  aircraft  overhaul  capacity  in  the 
NARF  community.   (See  DoD  Response  to  Finding  D.  ) 
RECOMMENDATION  5:   The  GAO  recommended  that  the 
Secretary  of  the  Navy  determine  the  feasibility  of 
implementing  the  above  recommendations  on  other  aircraft, 
(p.  4,  GAO  Draft  Report). 
DoD  Response;  Concur.   Actions  have  already  been  taken 
and  are  underway.  Current  management  initiatives,  begun  as 
a  result  of  the  NARF  management  analysis  completed  in 
February  1986,  will  help  ensure  that  all  aircraft  production 
lines  are  operated  effectively  and  efficiently,  including 
turnaround  time  reductions  where  possible  and  practical. 
Page  25 
GAO/NSIAD-87-167  Aircraft  Overhauls
Appendix  □ 
Comments  From  the  Assistant  Secretary  of 
Defense  (Production  and  Logistics) 
The  following  is  gao's  comment  on  the  dod  letter  dated  April  24, 1987. 
GAO  Comment 
1.  In  its  comments,  dod  stated  that  the  P-3  aircraft  inventory  has  never 
been  sufficient  to  fill  both  operational  and  maintenance  requirements 
and,  therefore,  any  procurement  reductions  would  be  detrimental.  We 
recognize  that  because  P-3  requirements  are  above  the  current  inven- 
tory, reductions  in  quantities  to  be  procured  are  unlikely.  We,  therefore, 
have  modified  the  report  to  remove  any  inference  that  we  were  calling 
for  such  reductions. 
(394086) 
Page  26 
GAO/NSIAD-87-157  Aircraft  Overhauls
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