Defense Inventory: Air Force Plans and Initiatives to Mitigate Spare Parts Shortages Need Better Implementation
Published: 2003-06-27T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Despite reporting $10.5 billion in appropriations spent on spare parts since fiscal year 2000, the Air Force continues to report shortages of spare parts. The service has taken numerous actions to address these shortages. GAO examined whether the Air Force's strategic plan addresses the mitigation of spare parts shortages, whether key initiatives are likely to mitigate the shortages, and the impact on readiness identified from increased investments for spare parts.
section_title: What GAO Found
paragraphs: The Air Force Strategic Plan generally provides an appropriate framework for mitigating spare parts shortages. However, one of two subordinate plans does not contain performance measures and targets linked to the strategic plan, and the other does not contain any performance targets. Therefore, the Air Force is not in a position to determine if the actions taken pursuant to its subordinate plans overcome spare parts shortages and provide assurance that it is getting the greatest readiness return on its spare parts investment. Key logistics initiatives under the Spares Campaign and Depot Maintenance Reengineering and Transformation (DMRT) efforts may help to mitigate spare parts shortages, but the initiatives' potential effectiveness is limited because of some key problems. First, the Air Force is not starting all identified initiatives that relate to the causes of shortages because it did not have needed personnel and funding. It assessed its logistics processes and identified more than 80 initiatives to solve more than 300 deficiencies; 43 initiatives were to improve processes that affect spare parts shortages, with about half relating to depot maintenance and the other half to supply. Although all depot maintenance-related initiatives have been started, 12 of the supply related initiatives have not been started. Second, 23 of the 31 initiatives lack both output-related performance measures and targets. Without output-related measures and targets to assess the initiatives' impact, the Air Force has little means of determining the extent to which it has successfully mitigated spare parts shortages and improved readiness. Third, the Air Force chose not to use the results of one of its initiatives, which identified a new total spares requirement as the basis for its fiscal year 2004 budget request. This decision resulted in a $578 million unfunded spare parts requirement. Finally, management problems--including failure to articulate the need for change, a lack of top-level commitment, and failure to address organizational issues--have hampered implementation of the initiatives. In February 2003, the Air Force established the Innovation and Transformation Directorate to address these problems, but its plans and priorities have not been set. The Air Force can estimate the impact of increased funding on individual weapon systems' supply availability and has done so. Based on its approximately $5.3 billion fiscal year 2004 spare parts budget request, the Air Force reported that aircraft supply availability would range from 73 to 100 percent. However, it cautioned that higher supply availability does not automatically result in higher mission capable rates because of other factors.

section_title: Letter
paragraphs: Since fiscal year 2000, the Air Force reportedly has spent approximately  $10.5 billion from its annual operations and maintenance appropriations  for spare parts, including additional supplemental funding totaling  approximately $745 million. The Air Force has reportedly exceeded the  Department of Defense’s overall supply performance goal of having parts  available 85 percent of the time when they are requested. Nevertheless, the  Air Force continues to report spare parts shortages. While recognizing that  spare parts shortages may never be eliminated, it is reasonable to expect  the services to place a priority on efforts to mitigate (reduce) those  shortages that adversely impact readiness. This priority should be inherent  in their overall stewardship of funds they request from Congress and their  accountability for making spare parts investment decisions that provide a  good readiness return. In numerous reports, we have stated that DOD’s  inventory management is a high-risk area because of long-standing  management weaknesses that could result in unnecessarily spending funds  that could be directed to higher priorities, such as modernization or  readiness.
This report is one in a series that responds to your request that we assist  your committee in determining ways to improve the availability of spare  parts. As agreed with your office, this report focuses on the  following issues:  1.  Does the Air Force’s strategic plan address the mitigation of critical  spare parts shortages—those that adversely affect readiness?  2.  How likely will key Air Force initiatives mitigate critical spare  parts shortages?  3.  Does the Air Force have the ability to identify the impact on readiness  of increased investments for spare parts?
To address these questions, we visited the Air Force Headquarters’  Logistics Directorate and the Air Force Materiel Command, and we  interviewed officials responsible for strategic planning, initiatives  development and implementation, and requirements determination for  spare parts funding. We also analyzed the strategic plans and key  initiatives identified by the Air Force that address spare parts shortages  and logistics support. We used the Government Performance and Results  Act of 1993, prior GAO reports, and other key DOD documents as criteria  to evaluate the Air Force’s strategic plans and initiatives.
subsections: section_title: Background
paragraphs: The Air Force recognized that reductions in spare parts inventories since  the early 1990s have negatively affected aircraft readiness indicators  such as mission capable rates, not-mission-capable supply, not-mission- capable maintenance, and cannibalizations. Recognizing the need to  reverse this trend and that previous attempts to pinpoint specific  spare parts shortages were piecemeal, temporary, and lacked adequate  personnel to implement, the Air Force began a 5 to7 year logistics  transformation effort in 1999 aimed at improving the efficiency and  economy of the entire logistics process to enhance support to the  warfighter. Rather than focusing on fully eliminating specific spare parts  shortages, the Air Force chose to focus on addressing the process  disconnects that caused the shortages. This included an end-to-end look  at all aspects of the logistics process including commercial supply chain  management, supply, maintenance, transportation, logistics planning, and  financial management. The Spares Campaign initiated in February 2001  and the Depot Maintenance Reengineering and Transformation (DMRT)  effort started in July 2001 were two key parts of the end-to-end review.  In total, they identified the need for 84 initiatives, 43 of which related to  spare parts.
The Spares Campaign focused on supply process deficiencies, and it was  intended to improve parts supportability to weapon systems and reverse  declining readiness related to spares management. This was considered  a major transformation effort and included five teams that reviewed the  processes needed to produce spares and identified disconnects and  solutions that would improve mission capability and manage cost  (see table 1).
Each team developed a flowchart showing how it believed processes  related to its focus area should function and be managed to improve  weapon system availability and cost management. The teams also  identified disconnects or barriers preventing the processes from  functioning as they should and recommended solutions to correct  these disconnects. Twelve major deficiencies were noted, and more than  190 corrective actions were identified, which resulted in 20 initiatives,  19 of which were related to spare parts shortages. As of February 2003,  7 of 19 spare parts initiatives have been started.
The DMRT effort, focused on deficiencies in depot maintenance  processes. Various teams identified disconnects and barriers in these  processes, reviewed Air Force current initiatives that affected depot  maintenance, and identified industry best practices and benchmarking,  receiving input from Air Force management, major commands, and  Air Logistics Centers. More than 300 barriers to depot maintenance  operational and financial performance were identified and consolidated  into more than 40 major issues organized around 8 overarching focus  areas. This resulted in 64 initiatives, 24 of which were related to spare  parts. All 24 of the spare parts related initiatives have been started. Table 2  below summarizes the status of the Spares Campaign and DMRT initiatives  as of February 2003. Appendix II provides a description of the 31 Spares  Campaign and DMRT initiatives that have been started and estimated  completion dates.
section_title: Strategic Plan Has an Appropriate Framework but Is Not Adequately Supported by Subordinate Plans
paragraphs: The Air Force Strategic Plan is appropriately structured to provide a  framework for mitigating spare parts shortages, but its two subordinate  plans are not aligned with it in terms of performance measures. Consistent  with sound management principles underlying the Government  Performance and Results Act of 1993 (GPRA), the strategic plan includes  a mission statement, long-term goals, and performance measures and  targets, and some of these elements relate to spare parts shortages.  However, the performance measures and targets in the subordinate plans  are not consistent with those in the strategic plan or none are stated.  This lack of alignment with the Air Force Strategic Plan’s performance  measures and targets means that the service cannot measure the  contribution of the actions it takes in response to the subordinate  plans toward overcoming spare parts shortages and be assured  that implementing the subordinate plans will mitigate critical spare  parts shortages and give the Air Force its greatest readiness return  on investment.
subsections: section_title: Strategic Plan Complies with Most GPRA Requirements
paragraphs: The Air Force Strategic Plan, issued between April 1998 and May 2000,  generally includes an effective strategy consistent with GPRA guidelines,  and it generally represents an effective framework for reducing spare  parts shortages. The plan applies to the Air Force as a whole and contains  a mission statement, strategic goals, and output-related performance  measures and targets. Specifically, the strategic plan has three goals:  Goal 1 is to ensure a high quality force of people, Goal 2 is to enable  commanders to respond to all types of crises, and Goal 3 is to prepare  for an uncertain future by pursuing a modernization program. Each  goal contains mission critical tasks (such as “Maximize the efficiency  of operating and maintaining Air Force resources”) along with related  performance measures and targets for determining progress toward  achieving its strategic goals.
Of the three strategic goals, Goal 2 addresses the mitigation of spare  parts shortages. It has two mission critical tasks and 19 performance  measures, many specifically related to improving spare parts inventories.  One mission critical task, to “improve mission effectiveness while  minimizing risk,” cites the percentage of aircraft that cannot perform their  mission because spare parts are not available as a performance measure.  It also cites performance targets for each aircraft. For example, the target  for the F-15E is 9 percent and for the B-1 it is 22 percent, meaning that  percent of the aircraft cannot perform their mission because of spare  parts shortages (see appendix III for the not mission capable supply rate  targets). The second mission critical task, to “maximize the efficiency of  operating and maintaining the Air Force resources,” has the elapsed time  between when a customer submits an order and receives the part as a  performance measure.
section_title: Performance Measures and Targets in Subordinate Plans Are Not Consistent with Strategic Plan
paragraphs: The major subordinate plans for implementing the Air Force Strategic  Plan include goals similar to those in the strategic plan. However, their  performance measures and targets are not linked to those in the strategic  plan. The subordinate plans are the Logistics Support Plan and the  Supply Strategic Plan (see fig. 1).
The Logistics Support Plan was developed to provide authoritative,  strategic direction and front-end guidance for Air Force logistics  capabilities planning. It includes the same goals as the higher plan, and  it contains objectives for accomplishing these goals. The plan does not  include quantitative or qualitative output-related performance measures  and targets that will yield the performance information needed to assess  goal accomplishment at either the subordinate or strategic plan levels in  order to measure results. Instead, it includes measures that will only yield  information about whether or not a specific process was implemented. For  example, the completion of combat support doctrine is the performance  measure cited for accomplishing the objective to improve combat support  to warfighters by developing and applying an Agile Combat Support  doctrine. Another nonquantitative or qualitative performance measure was  full fielding of identified total asset visibility capabilities for the objective  to fully implement total asset visibility.
The Supply Strategic Plan was intended to (1) create an integrated  process for Air Force supply planning, (2) establish the planning  infrastructure to facilitate information exchange throughout Air Force  Supply, and (3) improve Air Force Supply’s measures of effectiveness.  This plan contains five long-term goals that are consistent with the  higher plan’s goals, and it has 19 objectives, 71 tasks to accomplish these  objectives, and a projected end-state for some of these tasks. Some  end-states are similar to the strategic plan’s output-related performance  measures, but do not have corresponding performance targets. For  example, one end-state discusses incidents of aircraft being not mission  capable due to the lack of spare parts, but it does not specify a target  (i.e., the desired percentage of incidences) against which to measure  improvement. Other end-states did not discuss performance measures  at all. For example, one end-state is completion of the new Air Force  Supply Stockage Policy Guide and making it available to supply  officers worldwide.
Without effective quantitative and qualitative measures that flow from the  Strategic Plan structure to the subordinate plans, the Air Force cannot  determine the extent to which the implementation of these plans is  contributing to its overall strategic goal relating to overcoming spare  parts shortages. Furthermore, the Air Force cannot be assured that  implementing the subordinate plans will give them the greatest readiness  return on their investment.
section_title: Initiatives Might Help Mitigate Spare Parts Shortages, but Their Potential Effectiveness Is Limited
paragraphs: Key logistics initiatives being implemented by the Air Force may help  to mitigate spare parts shortages, but their potential effectiveness is  limited for several reasons. The Air Force has begun a major logistics  transformation effort intended to improve the entire logistics process  and identified numerous initiatives to improve its logistics process by  addressing deficiencies, barriers, or disconnects. However, it has not  implemented 12 of the 43 initiatives it identified as needed to address  spare parts shortages nor demonstrated that all key aspects of these  12 have been incorporated into other initiatives underway. In addition,  23 of the 31 initiatives being implemented lack performance measures  and targets. The Air Force also chose not to use the results of one of its  initiatives, which identified a new consolidated requirement for spare  parts; consequently, additional spare parts shortages could occur. Lastly,  management problems identified by an Air Force review team in 2002  have hampered implementation of the initiatives, and its new directorate,  established in February 2003, has not established a plan or priorities to  address these problems.
subsections: section_title: Air Force Has Not Started All Initiatives
paragraphs: In 2001, the Air Force identified 43 initiatives to improve processes related  to spare parts shortages—19 as part of the Spares Campaign and 24 as  part of the DMRT. As of February 2003, 31 of the 43 initiatives have been  started. The Air Force has started all 24 DMRT initiatives that relate to  improving spare parts shortages, but has started only 7 of the 19 initiatives  that relate to spare parts shortages arising from the Spares Campaign.  Table 3 shows the implementation status of Spares Campaign initiatives.
According to the Air Force, it chose to start the seven Spares Campaign  initiatives that reflected its highest priorities, provided greatest impact to  the logistics processes, and resulted in highest payback to the Air Force.  The remaining 12 initiatives have not been started because the Air Force  said it did not have the needed personnel and funding. Although the Air  Force provided a document showing that some aspects of the remaining  initiatives had been embedded into the Ten Focus Initiatives of the Spares  Campaign, we could not verify that all of these initiatives had been started.  Also, we could not validate that all of the deficiencies, disconnects, or  barriers intended to be addressed by the remaining 12 initiatives were  actually being addressed. Consequently, some of the process problems  identified in the Spares Campaign that cause spare parts shortages may  not be addressed, thereby reducing the overall effectiveness of the Air  Force’s efforts to mitigate spare parts shortages.
section_title: Most Initiatives Lack Output-Related Performance Measures and Targets
paragraphs: Twenty-three of the 31 Air Force initiatives that have been started lack  output-related performance measures and targets. One of the 23 initiatives,  the Material Policy initiative, has revision of all policies as its performance  target. The other 22 initiatives were part of the DMRT effort and did not  have any performance measure or any performance targets. Air Force  officials said they are still trying to develop measures and targets for  each of these initiatives. The other eight initiatives—such as the Weapon  System Supply Chain Manager, Regional Supply Squadron, and Demand  and Repair Workload Forecasting—have output-related measures,  including how effective they are in making weapon systems available, the  amount of cannibalization done to keep aircraft available, and the amount  of aircraft that are not mission capable due to supply or maintenance  problems. Without quantitative or qualitative performance-related  measures and targets relating to improving spare parts availability,  the Air Force lacks the means to determine the extent to which these  initiatives have improved readiness by reducing spare parts shortages.
section_title: Air Force Did Not Apply the Results of a Completed Initiative
paragraphs: One Spares Campaign initiative recently established a new total  requirement for spare parts, but the service chose not to request all the  funds to meet the requirement. The Spares Campaign’s Improve Spares  Budgeting initiative created a Spares Requirement Review Board to  identify a single, consolidated requirement for spare parts and consumable  items. In the past, the Air Force had budgeted for spares based on annual  flying-hour requirements with little consideration for the spares needed to  meet non-flying-hour requirements, such as the pipeline or safety stock.  As a result, the Air Force experienced parts shortages because demands  for non-flying-hour spare parts had not been sufficiently budgeted. The  review board compiled flying-hour and non-flying-hour requirements into  a single, agreed upon requirement to be used for planning, programming,  and budgeting.
The Air Force’s new process yielded a new total spare parts requirement  of approximately $5.9 billion for the fiscal year 2004 budget submission.  However, in its fiscal year 2004 budget the service chose to only request  $5.3 billion. After the service submitted its fiscal year 2004 budget, the  Secretary of the Air Force reported $578 million in unfunded spares  requirements: $166 million of this was for pipeline and other requirements,  and $412 million was for the flying-hour program. The Air Force’s decision  to request less funding than identified in their most recent requirements  determination process raises concerns. Either the Air Force’s new spare  parts requirements determination process is not a valid basis for future  budget decisions, or by not requesting the full amount to meet the  requirement, the Air Force has created the potential for additional  spare parts shortages that could negatively affect readiness or has  created the need for a supplemental budget request. Air Force officials  said they took a risk that the $5.3 billion budget request would be  sufficient based on the actual flying-hour cost experienced in fiscal year  2002. That year, they said, the flying-hour program was executed at a  cheaper rate than budgeted.
section_title: Management Weaknesses Impeded Implementation of Initiatives
paragraphs: The Air Force recently established a new directorate to address several  management issues that it believes adversely affects its logistics  transformation initiatives, but the extent to which this directorate will  improve overall management of these initiatives is not clear. In 2002, the  Air Force formed a review team composed of retired general officers,  senior executives, and industry leaders that assessed initiative  implementation plans, identified problems with its logistics transformation  efforts, and developed recommendations to solve these problems. The  team concluded that a high risk of failure existed for the transformation  efforts because (1) the Air Force is not clearly articulating throughout its  organization the need for changes, (2) top-level commitment to  implementing initiatives is not as strong as needed as evidenced by  schedule slippage and lack of funding for initiatives, and (3) clear roles  and responsibilities concerning the Spares Campaign are not being  addressed. One of the team’s recommendations was to merge the Spares  Campaign and DMRT efforts into a single, full-time logistics  transformation program. In February 2003, the Air Force established the  Innovation and Transformation Directorate, a new organization under the  Logistics Division, which according to an Air Force briefing, consolidated  the two efforts and placed oversight responsibility for all Air Force  logistics transformation efforts on top-level leadership within one office.
According to the Air Force, some of the first steps for the new directorate  will be to review existing Spares Campaign and DMRT initiatives, resolve  deficiencies in the two efforts, set aggressive timelines, goals, objectives,  and performance measures, and obtain senior leadership approval of their  actions. However, according to Air Force officials, the plans and priorities  of this new directorate had not been set as of April 2003. Without such  plans, priorities, and senior leadership commitment guiding the Air Force’s  efforts to overcome these problems, the potential benefits from its  initiatives to mitigate spare parts shortages that impact readiness may be  delayed or possibly not achieved.
section_title: The Air Force Can Identify the Impact of More Funding on Supply Availability, but Not on Readiness
paragraphs: The Air Force can show that additional funding for spare parts would  improve aircraft supply availability if the funds were provided directly to  the working capital fund. However, the Air Force does not link funding  for spare parts directly to readiness because other factors also affect  readiness. In its fiscal year 2004 budget request for spare parts funding, the  Air Force included information on how spare parts funding in the working  capital fund affected the supply availability for various types of aircraft  (see app. I for projected aircraft availability rates). The budget request  indicated that spare parts funding of approximately $5.3 billion would  allow for aircraft supply availability ranging from 73 percent for the H-60  to 100 percent for the F-111.
The Air Force drew this data from its Funding/Availability Multi-Method  Allocator for Spares model, which estimates how many and which  additional parts (i.e. supply availability) it can procure with different  amounts of operating authority. The Air Force said that the model has  some weaknesses, but it does provide a good mechanism for projecting  aircraft supply availability. One weakness, according to DOD, is that while  the model attempts to optimize supply parts availability, it is generally  biased towards the purchase of low cost/high-demand items versus those  critical spare parts that would most improve mission capable rates.
The Air Force can also use this model to show how additional funding  could increase spare parts availability by estimating the cost of additional  supply availability in 1 percent increments by weapon system. For  example, in 2002 the cost for the F-15E to achieve an 88 percent supply  availability rate was approximately $237 million. To increase this  availability 1 percent would have cost an additional $7 million. Similarly,  it cost the Air Force approximately $301 million for the C-5 to achieve an  82 percent supply availability rate. To achieve an additional 1 percent  supply availability would have cost an additional $3.6 million.
According to the Air Force, additional supply availability results in  improved stockage effectiveness and reduced customer wait time,  back orders, and cannibalization rates, which all contribute to increased  readiness. However, the Air Force cautioned that increased supply  availability does not automatically result in increased mission capable  (readiness) rates because other factors, such as maintenance and  transportation, affect these rates. For example, if maintenance staffing  levels at depots are inadequate, then even with 100 percent supply  availability, mission capability will not be at its highest possible level.
section_title: Conclusions
paragraphs: An Air Force strategic goal is to address problems that adversely affect  mission accomplishment, such as critical spare parts shortages that reduce  readiness. While it has a strategic plan that provides a good management  framework, places emphasis on mitigating spare parts shortages, and cites  performance measures and targets for assessing progress, the Air Force’s  potential for successful implementation of the plan is hindered by several  problems. Subordinate plans have not adopted the Strategic Plan’s  readiness-related performance measures and targets; all identified  initiatives to deal with the causes of spare parts shortages have not been  started or key aspects clearly incorporated into other initiatives; and many  of those that have been started lack effective performance measures and  targets. Additionally, some management weaknesses could significantly  impede successful initiative oversight and implementation. By not  adopting specific performance measures and targets related to mitigating  the critical spare parts shortages into subordinate plans and initiatives,  following through on initiatives to address the causes of parts shortages  and determine spare parts requirements, and resolving program  management deficiencies, the Air Force has little assurance that its  program emphasis and initiatives will improve spare-parts-related  readiness. Furthermore, as part of its stewardship and accountability for  funds, the Air Force will not be assured that the service’s spare parts  spending is yielding the best readiness return on investment.
section_title: Recommendations for Executive Action
paragraphs: We are recommending that the Secretary of Defense direct the Secretary  of the Air Force to take the following steps:  Incorporate the Air Force Strategic Plan’s performance measures and  targets into the subordinate Logistics Support Plan and the Supply  Strategic Plan.
Commit to start those remaining initiatives needed to address the causes  of spare parts shortages or clearly identify how the initiatives have been  incorporated into those initiatives already underway.
Adopt performance measures and targets for its initiatives that will show  how their implementation will affect critical spare parts availability and  readiness.
Direct the new Innovation and Transformation Directorate to establish  plans and priorities for improving management of logistics initiatives  consistent with the Air Force Strategic Plan.
Request spare parts funds in the Air Force’s budget consistent with results  of its spare parts requirements determination process.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, the Department of Defense  concurred with the intent of all five recommendations, but not all actions.  The Department of Defense’s written comments are reprinted in their  entirety in appendix IV.
In concurring with our first, third, and fourth recommendations  concerning incorporating and adopting performance measures and  targets into subordinate plans and initiatives, the Department of Defense  responded that the establishment of the Directorate of Innovation and  Transformation, the directorate’s efforts to develop a balanced  scorecard and supporting metrics, and its draft campaign plans which  spell out and track milestones for each initiative were consistent with the  direction of the Strategic Plan. We believe that if the Department of  Defense follows through with its plans for the new directorate, as laid out  in its written response, these planned actions should meet the thrust of  our recommendations.
The Department of Defense concurred with the intent of our second  recommendation related to starting those remaining initiatives needed to  address the causes of shortages, but not the specific actions. In its  comments the Department of Defense stated the original 19 initiatives  have been either consolidated into the Ten Focus Initiatives or overtaken  by other events making it unnecessary to separately track progress for  each of the individual actions. Based on this action, the Department of  Defense concluded that it had complied with this recommendation.  We disagree that the department’s actions fully respond to our  recommendation. The thrust of our recommendation is that the Air Force  identify which of the 12 remaining initiatives that were not started were  incorporated into the Ten Focus Initiatives and what events have  overtaken the others to ensure that all causes of spare parts shortages  identified by the Air Force are being adequately addressed.
In concurring with our fifth recommendation that the Air Force request  spare parts funds consistent with results of its spare parts requirements  determination process, the Department of Defense responded that the  Air Force’s spare parts budget was developed consistent with the new  requirements determination process, but the amount of funding requested  was constrained. This response confirms our statement that the Air Force  has underfunded its spare parts requirements and thereby created the  potential for a supplemental budget request or for additional spare parts  shortages that could negatively affect readiness.
section_title: Scope and Methodology
paragraphs: To accomplish our three objectives, we visited the Air Force Headquarters’  Logistics Directorate, in Washington, D.C., the Air Force Material  Command, in Dayton, Ohio and contractor representatives at Bearing  Point (formerly KPMG Consulting) in McLean, Virginia.
To determine whether the strategic plans address the mitigation of spare  parts shortages, we reviewed the Air Force Strategic Plan, its two  subordinate plans—Logistics Support Plan and Supply Strategic Plan— as well as other strategic planning documents and interviewed officials to  determine whether these plans included key actions targeted at mitigating  critical spare parts shortages and improving readiness. We also reviewed  these plans to determine if performance measures and targets in the  subordinate plans were similar and linked to those in the higher-level  strategic plan. Additionally, we reviewed these plans to determine whether  they included the elements of a strategic plan as defined by the GPRA.
To determine the likelihood of whether key initiatives would mitigate  spare parts shortages to improve readiness, we interviewed Air Force  officials to identify the initiatives that they believe will mitigate spare parts  shortages and improve readiness. We obtained and reviewed documents  related to the 31 spare-parts-related initiatives that have been started  to determine the likelihood of whether they would mitigate spare parts  shortages. We evaluated these initiatives to determine whether they  included quantifiable and measurable performance targets as described by  GPRA that would allow an assessment of how implementation of the  initiatives would impact spare parts shortages. We also assessed whether  these initiatives included all identified actions needed to overcome the  causes of spare parts shortages. In addition, we obtained a briefing and  discussed with Air Force officials the results of an Air Force review team’s  assessment of its logistics transformation efforts that identified  management weaknesses.
To determine what impact the Air Force could identify from additional  funding for spare parts, we interviewed officials and obtained documents  related to the Air Force’s fiscal year 2004 budget submission. We also  discussed with Air Force budget officials their Funding/Availability  Multi-Method Allocator for Spares model, which includes projected supply  availability rates based on estimated funding amounts and was used to  provide the budget information.
We performed our review from August 2002 to March 2003 in accordance  with generally accepted government auditing standards.
We are sending copies of this report to the Secretary of Defense; the  Secretary of the Air Force; the Director, Office of Management and  Budget; and other interested congressional committees and parties.  We will also 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.
Please contact me on (202) 512-8365 if you or your staff have any  questions concerning this report. Major contributors to this report are  included in appendix V.
section_title: Appendix I: Air Force Projected Aircraft Supply Availability Rates for Fiscal Year 2004
paragraphs: In response to a recommendation in the Inventory Management Study of  the Office of the Secretary of Defense, the Air Force included supply  availability rates for its weapons systems in its fiscal year 2004 budget  submission. As shown in table 4, the Air Force projected aircraft supply  availability rates ranging from 73 percent to 100 percent based on  requested funding of approximately $5.3 billion.
section_title: Appendix II: Description and Estimated Completion Dates of Spares Campaign and Depot Maintenance Reengineering and Transformation Spare-Parts-Related Initiatives
paragraphs: Estimated   completion date  Feb. 2004  (Weapon system supply chain manager)  3.  Standardize use and expand role of  regional supply squadron  Improve financial management  Improve demand & repair workload  forecasting  Improve spares budgeting (Spares  requirement review board)
Implement commercial best practices into Air Force supply  management.
Description  Establish and implement a corporate  strategy for directing, overseeing,  coordinating, improving, and facilitating  depot maintenance operations.  Develop a maintenance training  organization as a single training entity for  all depot maintenance training. Build  maintenance orientation and technical  training plans.  Establish program that will train first line  supervisory candidates prior to assumption  of duties.  Train and develop maintenance workers  and leaders.  Establish performance plans that focus on  cost, schedule, performance and quality  goals. Motivate work force by establishing  incentive programs, which instill a desire to  excel.  Establish hiring authorities to appoint the  best qualified candidates and streamline  the staffing process (external & internal).  Develop compensation packages  competitive with the commercial market.  Determine how to employ multi-skilling for  best value implementation.  Continue to assess impact of data systems  on 1st level supervisor’s time. Review  regulatory mandates assigning additional  duties to first levels.  Formalize the depot infrastructure strategic  planning process.  Incentivize infrastructure investment in  maintenance and repair.  Train the depot workforce in capital  purchase program and economic analysis.
Improve preventative maintenance  program.  Remove impediments to broad use of  facility and equipment maintenance  system.   Improve maintenance and repair facility  project delivery process.  Provide greater flexibility for implementing  workload changes.  Add surge requirements to infrastructure  planning and programming.
Create two depot capital investment  funding appropriations lines—new system  investments and recap of existing systems  (legacy).  Establish a comprehensive vision for  managing information resources  Insert devices used to automate data  collection on the shop floor to enhance  depot productivity.  Establish a lab environment across air  logistics centers, which will enhance the  ability to rapidly test solutions to meet user  requirements/ enhancements across depot  maintenance systems.  Improve stock levels for low demand items  through policy changes.
Clarify material support policies to better  state objectives and establish standards.
section_title: Appendix III: Not-Mission-Capable Supply Rate Targets by Weapon System
paragraphs: Goal 2 of the Air Force Strategic Plan cites the percentage of aircraft that  cannot perform their mission because spare parts are not available,  referred to as not-mission-capable supply, as a performance measure.  Table 5 provides the not-mission-capable supply rates for the Air Force’s  weapons systems.
section_title: Appendix IV: Comments from the Department of Defense
section_title: Appendix V: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgements
paragraphs: In addition to the names above, Gina O. Ruidera, Alfonso Q. Garcia, Susan  K. Woodward, and Barry L. Shillito also made significant contributions to  this report.