Depot Maintenance: Army Needs Plan to Implement Depot Maintenance Report's Recommendations
Published: 2004-01-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Each year, the U.S. Army spends about $3 billion on depot-level maintenance and repair work for weapons systems and other equipment. However, because its data gathering and reporting processes have been limited, the Army historically has been unable to fully identify how much depotlevel maintenance takes place outside its five public depots. As a result, it has not been able to determine with precision how well it was meeting statutory requirements to limit contracted depot-level maintenance work to 50 percent of the program budget. In the House report on the Fiscal Year 2001 Defense Authorization Act, Congress directed the Army to report on the proliferation of depot-level maintenance work at nondepot facilities and asked GAO to review that report. GAO examined the extent to which (1) the Army's report identifies the amount of depot-level maintenance work done outside public depots; (2) the Army can account for its depot-level maintenance workload, as required by statute; and (3) the corrective actions in the report are likely to address the proliferation issue and enhance the Army's reporting.
section_title: What GAO Found
paragraphs: The Army's proliferation report, issued in September 2003, did not fully identify the extent of depot-level maintenance work performed outside the Army's public depots. The report estimated that the Army underreported its fiscal year 2001 $2.7 billion depot-level maintenance program by $188.6 million but indicated that this was a rough estimate and that further analysis is needed. It attributed this underreporting largely to work performed in two categories--work that met the criteria for depot-level maintenance work but was not reported as such and work at nondepot field facilities that involved depot-level maintenance tasks. GAO's prior reviews also identified these categories as key contributors to underreporting. While the report noted that the Army has an extensive maintenance infrastructure with redundant capabilities, it did not address the extent of this redundancy. The lack of complete information on the extent of depot-level maintenance workloads limits the Army's ability to fully account for this work in the Department of Defense's (DOD) annual report to Congress on the allocation of public- and private-sector depot-level maintenance spending. The 2003 proliferation report identified key Army limitations, including inconsistencies in applying the congressionally mandated definition of "depot maintenance," weaknesses in its management information systems, and the failure to follow established policies and procedures for authorizing depot-level maintenance work at nondepot facilities. GAO's current analysis and prior work confirmed that these limitations make it difficult for the Army to fully account for its maintenance workload as it moves closer to the 50 percent ceiling for work performed by contractors. GAO's most recent report on the Army's 50-50 reporting for fiscal year 2002 showed that, after adjustments for known underreporting, the percentage of private-sector work increased to 49 percent. If implemented, the 29 recommendations in the 2003 report could enhance the Army's ability to report on its 50-50 data and to evaluate the proliferation of depot-level maintenance work at nondepot facilities. The recommendations, which are consistent with those that GAO has previously made, are focused on key problem areas, such as the need for an improved understanding about the 50-50 rule and for compliance with reporting policies and procedures. Efforts have been undertaken to address some of the problem areas. However, the Army has not yet developed an action plan that identifies priorities, time frames, roles and responsibilities, evaluation criteria, and resources for managing the implementation of the recommendations. Until the Army does this, it will be difficult to assess to what extent the Army is likely to meet its desired objectives. While improvements should be accomplished, the complexity and vastness of the Army's maintenance system and continuing questions about such issues as the definition of "depot maintenance" and changing maintenance strategies could continue to present challenges in fully recording all maintenance work that should be captured.

section_title: Letter
paragraphs: Each year the Department of Defense (DOD) submits a report to Congress  showing that billions of dollars have been spent on depot maintenance and  repairs for Army weapons systems and support equipment. In recent  years, depot-level maintenance and repair work has expanded from the  traditional fixed-location public depots to numerous nondepot repair  facilities in the field. This shifting of depot-level maintenance workload to  field facilities has contributed to uncertainty about the magnitude of  depot-level maintenance capabilities and the distribution of work between  public and private facilities. In October 1999, we reported on the Army’s  first congressionally directed report on the proliferation of depot-level  maintenance activities at nondepot facilities, noting that the Army faced  a number of continuing challenges in attempting to address the  fragmentation of depot-level maintenance work and the proliferation of  depot-level maintenance facilities. We noted that the Army’s report did not  sufficiently identify the extent of depot-level maintenance work performed  at nondepot facilities.
In the House Armed Services Committee’s report on the fiscal year 2001  defense authorization act, Congress directed the Secretary of the Army  to provide a report that identifies the proliferation of depot-level  maintenance performed outside of the five public depots. The Army  formally submitted its report in September 2003. The committee’s report  also requested that we provide a review of the Army’s report, including an  assessment of the Army’s ability to comply with 10 U.S.C. 2466, which  governs the distribution of depot-level maintenance funds between public  and private facilities. Our review addresses the extent to which (1) the  Army’s report identifies the amount of depot-level maintenance work  performed outside the public depots, (2) the Army can account for its  depot-level maintenance workload as required by 10 U.S.C. 2466, and  (3) the corrective actions in the Army report are likely to address the  proliferation of depot-level maintenance activities and enhance the  accuracy and completeness of 50-50 reporting.
To address these objectives, we drew largely from the body of work we  have done in the past on the Army’s depot-level maintenance issues. In  addition, we interviewed officials at Army headquarters, Army major  commands, and maintenance facilities at selected field installations to  gain a better understanding of the implications of the Army report’s  findings and recommendations. A detailed description of our scope and  methodology is included in appendix I.
subsections: section_title: Background
paragraphs: The Army uses maintenance capabilities in both the public and private  sectors to maintain, overhaul, and repair its military weapons systems,  such as missiles, combat vehicles, tactical vehicles, aircraft, and  communication and electronic equipment. The level at which maintenance  work is performed depends largely on authorized capability, worker skills,  and predefined work requirements. Legislative requirementswhich play  an important role in managing the allocation of depot-level maintenance  workmandate that DOD provide Congress with annual reports on the  distribution of funding for depot-level maintenance workloads in the  public and private sectors.
The Army assigns maintenance work to four categories—unit support,  direct support, general support, and depot-level support. Unit and direct  support workloads, which are limited to routine or recurring requirements,  such as oil changes and the removal and replacement of components, are  performed at military units in field locations and funded by direct  appropriations for operations and maintenance.
General support, which consists of the repair and overhaul of parts and  assemblies and some end items such as trucks, is generally performed at  fixed (nonmobile) industrial facilities located on Army posts, camps, and  stations, and it is funded by direct appropriations for operations and  maintenance. Military personnel, government-employed civilians, or  contractor employees may perform this maintenance.
Depot-level support, which includes the overhaul; upgrading; and  rebuilding of parts, assemblies, and subassemblies; and testing and  reclamation of equipment, is the most intensive category of maintenance  and requires the highest level of skilled workers and more sophisticated  test and plant equipment. It traditionally has been performed by  (1) government-employed civilians working at government-owned  industrial facilities under the command and control of the Army Materiel  Command (currently five public depots) or (2) contractor personnel  working in contractor owned and operated facilities performing work  specified by Army Materiel Command-managed maintenance contracts.  The Army’s five government-operated maintenance depots are managed  within the Army Working Capital Fund. Contract depot-level maintenance  work is not managed under the working capital fund.
The Army has two categories of depot-level maintenance activities:    Activities that have been designated and organized by design and  purpose to primarily perform depot-level maintenance and repair tasks.  These activities would include the Army Materiel Command’s public  depots; the Army’s forward deployed maintenance depots; and  contractor depots, primarily located at both the national and  installation levels.
Activities below the depot level that have been granted approval to  perform specific depot-level tasks through a special or one-time  authorization or that have been designated as a source of repair.  These activities include Army National Guard Readiness Sustainment  Maintenance Sites and Aviation Classification Repair Activity Depots,  Army Reserve Installation Materiel Maintenance Activities, and Army  Forces Command Contract Maintenance Facilities. These activities are  primarily located at the installation level, and the work may be done by  either government or contractor personnel.
Operations of the Army depots are guided by legislative requirements  that divide the amount of depot work between the public and private  sectors and add specificity to how such work is to be defined. For  example, 10 U.S.C. 2464 provides for a government owned and operated  core logistics capability that is sufficient to ensure an effective and timely  response to a mobilization or other national emergency. Also, 10 U.S.C.  2466 generally prohibits the use of more than 50 percent of the funds made  available in a fiscal year for depot-level maintenance and repair by  nonfederal personnel.
In addition, 10 U.S.C. 2460 defines depot-level maintenance to encompass  material maintenance or repair requiring the overhaul, upgrading, or  rebuilding of parts, assemblies, or subassemblies and the testing and  reclamation of equipment, regardless of the source of funds for the  maintenance or repair or the location where maintenance or repair work  is performed. Depot-level maintenance also encompasses software  maintenance, interim contractor support, and contractor logistics  support to the extent that work performed in these areas is depot-level  maintenance. The statute excludes from depot-level maintenance the  nuclear refueling of an aircraft carrier, the procurement of major  modifications or upgrades of weapons systems that are designed to  improve program performance, and the procurement of parts for safety  modifications, although the term “depot maintenance” does cover the  installation of parts for safety modifications. Congress has made changes  to various depot-level maintenance requirements over the years. For  example, the 1998 Defense Authorization Act established a statutory  definition of depot-level maintenance and repair and increased DOD’s  authority to use its depot-level maintenance funds for the private sector’s  performance of the work from 40 to 50 percent.
On the basis of statutory language defining depot-level maintenance, the  Office of the Secretary of Defense issues annual guidance to the military  departments for reporting their public-private workload allocations. The  military departments also issue internal instructions to manage the data  collection and reporting process tailored to their individual organizations  and operating environments.
As we have reported in recent years in examining DOD’s compliance with  its so-called “50-50 requirement” under 10 U.S.C. 2466, all of the military  departments have continuing data errors and inconsistencies in reporting  and problems in documenting and independently validating their annual  reports. We also have recognized the limitations of their financial systems,  operations, and controls, as well as their continuing inability to capture  and report the full costs of depot-level maintenance programs. Some of  our most recent reports on depot-level maintenance issues are listed in the  Related GAO Products section of this report.
We previously reported that the Army had not sufficiently identified the  extent of depot-level maintenance work performed at nondepot facilities  in its April 14, 1999, report to the House Committee on Armed Services on  depot proliferation. While the Army’s report indicated that 40 staff years  of depot-level maintenance work was performed outside of the formal  depot system by nondepot maintenance providers operating under  specialized repair authorities, it also recognized that the figure was likely  understated for a variety of reasons to include limitations in systems and  procedures to fully quantify such work. We agreed. We also noted that in  July 1999 the Army designated its Army Materiel Command as its National  Maintenance Manager with responsibility for overseeing the Army’s  logistics and maintenance support programs and managing maintenance  facilities. In doing so, we noted then that while the Army recognized that it  needed to modify and standardize Army data systems to fully account for  depot-level maintenance work at all locations, it had not established clear  action plans, milestones, and funding requirements for doing so.
Our September 2003 report on DOD’s compliance with the 50-50  requirement found that the Army’s latest reporting on depot-level  workloads for fiscal years 2001 and 2002 had utilized a new, more  centralized financial system to collect 50-50 data that corrected some of  the transcription errors we had found the previous year but that we  continued to find errors, omissions, and inconsistencies in its data.
Moreover, we reported that, as in prior years, the Army underreported  public- and private-sector depot-level maintenance work at field locations  as it continues unfinished efforts to consolidate maintenance activities and  better control the proliferation of depot-level tasks at nondepot facilities.
section_title: Army’s 2003 Proliferation Report Did Not Fully Identify Depot-Level Maintenance Performed outside Public Depots
paragraphs: Although the mandate directed the Army to identify the proliferation of  depot-level maintenance performed outside the public depots, the Army’s  report on depot-level maintenance proliferation did not fully identify the  extent of depot-level maintenance work performed at nondepot facilities.  Instead, the report estimated that depot-level maintenance work valued at  $188.6 million for fiscal year 2001 was not included in the Army’s depot- level maintenance data and that further validation of this amount was  needed. While this estimate may not be fully indicative of depot-level  maintenance work being performed outside the public depots, it indicates  underreporting in this area that is consistent with the observations we  have made in our prior work. Although the report recognized that the  Army has redundant capabilities and capacities, it did not provide any  information on the extent of this redundancy or the extent of maintenance  activities that could be consolidated. We also have previously reported the  existence of this problem.
subsections: section_title: Estimate of Work outside Depots Is Incomplete
paragraphs: While the Army’s report provided an estimate of depot-level maintenance  work that was not appropriately identified as such in fiscal year 2001, it  acknowledged that the amount was incomplete and needed further  validation. The report listed seven specific areas where depot-level  maintenance work performed by nondepot facilities was not identified and  estimated this amounted to be $188.6 million. As illustrated by table 1,  most of the unidentified amount occurred in field-level facilities that  perform depot-level maintenance tasks. According to the report, two  categories of work accounted for about 75 percent of the $188.6 million.  These were facilities that performed field-level maintenance under the  National Maintenance Program with embedded depot tasks and those  under One-Time Repair authorizations. The report pointed out that  some of the unidentified depot-level maintenance work resulted from  a misunderstanding between the Army Materiel Command and its  subordinate commands over which organization would report this type  of work.
The report’s identification of unidentified depot-level maintenance work  performed by nondepot facilities is consistent with our prior reviews of  the Army’s annual 50-50 data. For example, in our most recent report, we  identified work categories such as unreported one-time repair actions  and unreported work by commands that did not receive Army reporting  guidance, which contributed to the Army’s inability to fully account for its  depot-level maintenance work in 2002. We noted that, as in past years,  the Army did not fully identify public- and private-sector depot-level  maintenance work at field locations as it continued unfinished efforts to  consolidate maintenance activities and better control the proliferation of  depot-level tasks at nondepot locations. While neither we nor the Army  can precisely identify the amount of depot-level maintenance work being  performed in nondepot maintenance facilities, our prior work and the  Army’s latest report suggest that the $188.6 million estimate should not be  construed as fully representing the amount of depot-level maintenance  work performed at nondepot facilities.
section_title: Army Has an Extensive Maintenance Infrastructure, but Capacity for Depot Maintenance Activities at Nondepot Locations Has Not Been Fully Addressed
paragraphs: The Army’s proliferation report pointed out that the Army’s maintenance  infrastructure has redundant capabilities and capacities that could be  consolidated and streamlined to be more cost-effective. While the active  Army, Army National Guard, and Army Reserve operate extensive  maintenance facilities, some of which have the capability and capacity  to perform depot-level maintenance work, the report did not provide  any data to quantify the extent of redundancy or identify any possible  candidates for consolidation. It did suggest that the Army further study  the issue for opportunities to streamline its current expansive depot-level  maintenance infrastructure. Moreover, the Army’s full implementation of  its National Maintenance Programanother report recommendationis  also intended to address streamlining the Army’s maintenance  infrastructure.
While we did not attempt to identify the full extent of this maintenance  infrastructure as part of this review, our analysis supports the Army  report’s contention that the Army has extensive nondepot facilities, some  of which have the capability and capacity for depot-level maintenance  tasks and are performing depot-level maintenance work. At the Army sites  we visited, we observed maintenance activities involved with all levels of  maintenance for ground and aviation systems. Similar to the Army’s public  depots, these activities occupied large facilities that included machine  shops, automobile and heavy- equipment repair shops, paint and body  shops, and sandblasting areas. The pictures in figure 2 show some contrast  and similarities in maintenance facilities at depot and nondepot locations.
Some of the activities had the capability and capacity for depot-level  maintenance activities and were performing depot-level maintenance  work. For example, the Readiness Business Center at Fort Campbell,  Kentucky, has been authorized to perform depot-level maintenance tasks  to repair components for tactical wheeled vehicles, radios, and  helicopters. Of the total $27.1 million maintenance work performed by the  Business Center in fiscal year 2002, about $4.5 million, or about 17  percent, was identified as depot-level maintenance. Also maintenance  officials at several facilities at Fort Riley, Kansasthree of them operated  by the National Guard, one by the Fort Riley Directorate of Logistics, one  by the Forces Command, and one by the Army Reserveestimated that  their maintenance work for fiscal year 2002 totaled about $58.5 million.  The National Guard performed about $35 million worth of depot-level  maintenance in fiscal year 2002 and expects this workload to significantly  increase. More details on the Army’s maintenance infrastructure are  provided in appendix II.
We have previously reported on the Army’s proliferation of facilities that  perform depot-level maintenance work and the lack of a strategic plan  for depots to guide its decisions on this issue. In an October 1999 report,  we pointed out that the Army’s April 1999 study of the proliferation  of depot-level maintenance activities at nondepot facilities did not  sufficiently identify the extent of this type work. We also highlighted that  the Army’s study, citing inadequate data on the subject of proliferation, did  not make any recommendations for consolidating depot-level maintenance  facilities. We noted that a key challenge that the Army faced was  determining and overseeing the amount of depot-level maintenance  capabilities controlled by major commands in the active Army and the  Army National Guard. For various reasons, these commands were  reluctant to reduce their present capability for performing depot-level  maintenance workloads. For example, Reserve and National Guard  Bureau officials said that having local maintenance facilities capable of  performing some depot-level tasks was a readiness issue in that such  facilities allowed their units more rapid turnaround time on equipment  requiring this type of repair.
In July 2003 we reported that work performed in the Army’s public depots  had declined by 36 percent from fiscal year 1987 through fiscal year 2002,  while the total depot-level maintenance program grew. We pointed out  that future workload projections indicated further decline but that the  full impact of the Iraq conflict on future depot-level workload was largely  unknown. Among the host of factors that contributed to this decline were  (1) DOD’s policy for greater reliance on the private sector for depot-level  support of new weapons systems and major upgrades and (2) its increased  reliance on the use of regional repair activities and private-sector  contractors for work that might otherwise be done in the depots. We  noted that neither DOD nor the Army had a comprehensive and current  depot-level maintenance strategic plan, which was an essential aspect of  ensuring future depot efficiency and viability.
section_title: Army Cannot Provide Congress with a Complete Accounting of Its Depot-Level Maintenance Work
paragraphs: Without complete information on the extent of depot-level maintenance  work performed in nondepot facilities, DOD’s annual report to Congress  cannot fully account for the allocation of depot-level maintenance funds  between the public and private sectors. In our analysis of DOD’s 50-50  reporting, we have said that underreporting depot work in nondepot  facilities is one of the limitations affecting the Army’s ability to fully  account for its depot-level maintenance work. Consistent with our work  in this area, the Army’s report on proliferation identifies a number of  factors that preclude the Army from fully capturing and reporting its  depot-level maintenance data at nondepot facilities. These factors include  (1) inconsistent application of the congressionally mandated definition  of “depot maintenance” and related guidance, (2) weaknesses in the  management information systems for collecting and reporting data,  and (3) the failure to follow established policies and procedures for  authorizing depot-level work at field-level facilities and outsourcing  work. Our current analysis and our prior work identify these factors as  underlying causes affecting the Army’s determination that it has  complied with the 50-50 rule. Furthermore, these limitations will become  more significant as the Army approaches the statutory ceiling on the  performance of depot-level maintenance work by contract.
subsections: section_title: Underreported Depot-Level Work Performed by Nondepot Maintenance Facilities Affects Accuracy of 50-50 Report
paragraphs: We have reported in the past that by not having complete information on  the amount of depot-level maintenance work being performed in nondepot  facilities, DOD cannot provide Congress with an accurate and complete  report regarding the allocation of depot-level maintenance between the  public and private sectors as required by 10 U.S.C. 2466. For example,  our September 2003 report stated that our prior 50-50 reports have  documented continuing problems and shortcomings in accurately and  consistently reporting depot-level maintenance accomplished by both  public- and private-sector sources at nondepot locations. For example,  one-time depot repair actions at unit-level facilities went unreported.  Other nondepot work was not reported because some commands did not  receive 50-50 instructions and others misapplied the guidance. Contractors  performed some of this work, and military or civilian government  employees performed some of it. While neither the Army nor we know  the extent of unreported work nor the amount performed by public- and  private-sector employees, the impact effectively limits the accuracy and  completeness of DOD’s report to Congress on the allocation of depot-level  maintenance funds between the public and private sectors. Additionally,  as discussed below, both the Army and we have identified three key  factors inhibiting the Army’s ability to accurately and completely report  depot-level maintenance work performed at nondepot facilities.
subsections: section_title: Inconsistent Application of Depot-Level Maintenance Definition and 50-50 Guidance
paragraphs: A key factor inhibiting the Army’s ability to accurately and completely  identify all depot-level maintenance work performed in nondepot facilities  in DOD’s 50-50 report is that Army military activities inconsistently apply  the congressionally mandated definition of “depot maintenance.” The  Army’s proliferation report concluded that the congressionally mandated  definition of depot-level maintenance is not widely known below the  major command headquarters. In addition, the definition is open to  interpretation, and the reporting guidance is not always well defined.
At most of the commands and installations we visited, maintenance  officials said that, in determining whether a maintenance task is  depot-level maintenance, they follow the guidance found in the  Army’s Maintenance Allocation Charts; technical manuals; and source,  maintainability, and recovery codes for reparable components rather  than apply the congressionally mandated definition. They expressed  concerns that the congressional definition is not always consistent with  this guidance, is too broad, and is subject to too much interpretation over  what maintenance tasks should be counted as depot-level tasks. For  example, officials at the National Guard Bureau said that applying the  definition to repair work performed by direct support and general support  activities caused uncertainty in that the bureau considered most of the  work at these levels to be nondepot-level work and to identify what work  should be considered depot-level work required subjective decisions.  Officials at the Reserve Command said that, while only maintenance  work defined by the Army’s technical manuals as depot-level work  should be reported as such, under the expanded definition of depot-level  maintenance, some work defined as below depot-level could involve  depot-level tasks such as changing and swapping out engines and  transmissions for wheeled vehicles. Officials at the installation  maintenance sites we visited made similar comments.
In commenting on the proliferation report, the Army Materiel Command  said that the application of the definition of depot-level maintenance  contributed to the report’s findings that depot-level maintenance tasks at  nondepot facilities were being underreported. The command added that  tasks performed by these facilities were not distinguished as depot-level  tasks in the Army guidance but, in the aggregate, these tasks may be  equivalent to depot-level maintenance. Finally, the command said that the  Army could only approximate the extent of work performed at nondepot  facilities because it currently does not have a system to precisely capture  information on maintenance work for DOD’s 50-50 report.
In prior reports, we have concluded that the Army had not revised its  maintenance policies and technical manuals to reflect the expanded  definition of depot-level maintenance and, as a result, any attempt to  estimate its extent at local facilities would be misleading. We also  recently reported that some Army commands did not receive 50-50  instructions and that others misapplied the guidance. The Army’s 2003  report indicates that the Army will have to make these changes in its  maintenance policies and technical manuals. For example, in recognizing  that the Army had not yet incorporated the expanded definition into its  policies and procedures for 50-50 reporting, the Army’s report suggested  that the Army (1) provide more explicit guidance for 50-50 reporting to  help ensure that its commands better understood reporting requirements  and (2) develop an easy-to-use reference guide to help the commands  better determine what maintenance work should be included in the  50-50 report.
section_title: Army’s Management Information Systems Are Inadequate
paragraphs: Inadequate Army management information systems are a second key  factor inhibiting the Army’s ability to fully capture depot-level  maintenance work performed in nondepot facilities. The Army’s  problems with its management information systems are longstanding.  In a December 2000 report, the Army Logistics Transformation Agency  concluded that the Army’s maintenance environment was characterized by  many “stovepipe” information systems and application programs that are  predominately fed data manually by maintainers and operators. It also  concluded that a wide range of maintenance-related information does not  exist, is not adequate, or is not accessible. In our prior reviews, we also  have reported weaknesses in the Army’s management information system.  For example, in our 1999 report, we concluded that deficiencies in  management information systems contributed to the Army’s inability to  develop accurate and consistent estimates of its depot-level maintenance  work. In our September 2003 report on DOD’s compliance with the 50-50  requirement, we found that the Army’s latest reporting on depot-level  workloads for fiscal years 2001 and 2002 had utilized a new, more  centralized financial system to collect 50-50 data. This new system helped  correct some of the transcription errors we had found the previous year,  but we continued to find errors, omissions, and inconsistencies in the  Army’s data.
The Army’s proliferation report concluded that current management  information systems for capturing depot-level maintenance work at the  installation level are inadequate for collecting and reporting 50-50 data.  According to the report, the systems cannot, among other things,  (1) archive the data in a readily accessible manner or (2) allow for the  separate counting of multiple maintenance actions associated with a  single work order. (A work order may include three different levels  of maintenance, including depot-level maintenance, but only one  maintenance code can be assigned to the order.) Also the report pointed  out that collecting and reporting depot-level maintenance work outside the  Army’s five public depots was a convoluted and manual process.
section_title: Policies and Procedures for Authorizing Work Are Not Always Being Followed
paragraphs: Another factor inhibiting the accuracy and completeness of the 50-50  report is that policies and procedures for authorizing depot-level work in  nondepot facilities are not always followed. The Army’s proliferation  report made the same conclusion and identified several areas where  reporting officials did not believe that maintenance facilities were  following policies and procedures for authorizing and reporting depot- level maintenance work. For example, the report noted that maintenance  facilities at the installation level were undertaking depot-level  maintenance work without having higher command authorization and that  some authorized one-time repairs were not being reported. The report also  concluded that some weapons systems managers were not following  current DOD and Army guidance in determining sources for providing  depot-level maintenance support.
In a prior report related to DOD’s process for determining depot-level  maintenance repair strategies for its new weapons systems and major  upgrades, we noted that many weapons systems managers, including those  in the Army, were not following existing guidance regarding such tasks as  adequately performing required cost comparisons between public and  private facilities and coordinating maintenance support decisions between  acquisition and logistics officials. We noted that service officials  attributed these problems, in large part, to weaknesses in guidance, which  they believed was inadequate, unclear, and sometimes contradictory.
section_title: Limitations More Significant for Future Assessment of 50-50 Compliance
paragraphs: As the Army moves closer to the statutory ceiling for the funding for  depot-level maintenance work performed in the private sector, the  limitations in the Army’s ability to precisely capture its depot-level  maintenance work will become more significant. For fiscal year 2002, the  Army’s reported data ($2.7 billion for the total program) indicated that its  funding in the private sector for depot-level maintenance remained below  the 50-percent limit. However, our adjustments for known errors in  reporting for that year increased the percentage of private-sector work to  49 percent from the 46.5 percent reported by the Army. An increase of  more than 1 percent in the use of the private sector to perform more  depot-level maintenance in the future, could cause the Army to exceed its  statutory limitation. Consequently, the Army would be required to seek a  national security waiver and notify Congress as provided for in 10 U.S.C.  2466(b).
With regard to estimates of future compliance, the Army’s report noted  that the Army might exceed the 50 percent ceiling for contractor support  by fiscal year 2006. More recently, an official from the Army Materiel  Command said that, for fiscal years 2002 and 2003, the Army experienced  a 3 to 5 percent increase in its contract requirements for depot-level  maintenance because increased operational requirements made the public  depots unable to meet the total demand for depot-level maintenance work.  She pointed out that, if this trend were to continue, the Army might have  to seek a waiver from the Secretary of Defense, possibly as early as fiscal  year 2004, to exceed the 50 percent limitation for work performed by the  private sector. Another official at the Army Materiel Command said that  the Army’s depot-level maintenance work in 2004 might increase by about  $2.5 billion because of operational requirements for Army equipment  deployed in the Middle East. He also said that, in an effort to keep up with  maintenance demands, the Army’s five public depots have used extensive  overtime, added second work shifts, hired temporary employees, and  allowed some retirees to return to work. In his view, the public depots  could not meet the demands of the increased maintenance work and the  Army would have to use more contractors.
section_title: Army Needs Action Plan to Address Proliferation and Reporting Issues
paragraphs: The Army report’s recommendations are focused on key problem areas  and are consistent with recommendations we have made in the past. If  fully implemented, the recommendations in the Army’s proliferation report  could improve the identification of additional depot-level maintenance  work in nondepot facilities, and the accuracy and completeness of 50-50  reporting. Efforts have been undertaken to address some of the problem  areas; however, no action plan to manage the implementation has been  developed. Evaluating the success of the proposed 29 recommendations  will be difficult until the Army develops an action plan with priorities, time  frames, responsible organizations, evaluation criteria, and the resources  required to implement these recommendations. If actions are not  implemented in a timely way, the Army will not likely have the  comprehensive information that it needs in the near term to comply with  the 50-50 reporting requirements or to effectively manage the existing  excess maintenance capabilities and infrastructure. On the other hand, the  extent of improvements likely to be achieved in the long term is uncertain,  given previous delays and the significant challenges that the Army faces in  instituting solutions to ensure the consistent application of 50-50 reporting  criteria.
subsections: section_title: Recommendations Are Focused on Key Problem Areas
paragraphs: The Army report’s recommendations present an array of corrective  measures that are focused on four key areas in which the Army could  better evaluate the proliferation of depot-level maintenance facilities  and manage its depot-level maintenance program. Appendix III lists the  29 recommendations. Basically, the key areas represent a need for  the following:  Improved communication and emphasis for the 50-50 requirement.  The 14 recommendations in this area address improving the 50-50  process. They include conducting annual 50-50 workshops, issuing  clear guidance for 50-50 reporting, publicizing information about the  depot-level maintenance program in professional publications,  ensuring that compliance with the 50-50 rule becomes a priority, and  developing an easy-to-use reference guide to help reporting activities  better identify depot-level maintenance work that should be reported.
Improved management information systems. The three  recommendations in this area address continuing efforts to develop a  single integrated management information system capable of capturing  and reporting depot-level maintenance work at nondepot facilities.
Enhanced compliance with policies and procedures for depot-level  maintenance operations. The nine recommendations in this area  address revising policies to ensure consistency in compliance with all  applicable legislation, regulations, and policies; developing a policy  requiring the acquisition of access to system technical data for use by  government or other contract maintenance activities; and developing  and implementing a plan for documenting baseline data to compare  contractor and public depot support costs.
Develop the National Maintenance Program and consolidate  maintenance activities. The three recommendations in this area  address efforts to develop the National Maintenance Program and to  conduct further analyses to identify opportunities for consolidating  depot-level maintenance facilities.
Of the Army proliferation report’s 29 recommendations to improve the  identification and reporting of depot-level maintenance data, 3 were  specifically directed toward managing the proliferation of depot-level  maintenance at nondepot facilities. One of the recommendations identified  the need for additional study and identification.
section_title: Recommendations Consistent with Our Prior Work
paragraphs: The proliferation report’s recommendations are consistent with our prior  recommendations regarding the Army’s proliferation of depot-level  maintenance facilities and the 50-50 reporting process. For example, in  September 2003, we recommended that the 50-50 reporting guidance be  appropriately disseminated to reporting organizations and individuals and  that staff be properly trained in a timely way to apply the guidance. In  October 1999, we recommended that the Army address the following  challenges:  Improving its management information systems. Our  recommendation was that the Army identify requisite action items,  time frames, and funding requirements for improving the Army’s  information management systems to fully identify the magnitude and  cost-effectiveness of depot-level maintenance work at various locations  within the Army.
Finding opportunities to consolidate maintenance activities. We  recommended that the Army establish (1) clear time frames and action  plans for assessing requirements for the various types of depot-level  maintenance facilities and (2) plans for achieving necessary  consolidations and reductions of excess capabilities.
Enhancing the National Maintenance Program. We recommended  that the Army incorporate the depot-level maintenance capabilities of  both active and reserve components under the National Maintenance  Program and assign the national maintenance manager with requisite  responsibility and authority for depot-level maintenance capabilities in  active and reserve facilities.
While we made these recommendations 4 years ago, they continue to be  essential to addressing the problems of the proliferation of depot-level  maintenance facilities and inaccuracies in 50-50 reporting.
section_title: Although Some Efforts Are Ongoing, Action Plan Not Yet Developed to Ensure Implementation of Recommendations in a Timely Manner
paragraphs: The Army’s 2003 report noted that the Army had taken numerous steps  since 1999 to improve its management of the proliferation of depot-level  maintenance facilities and its 50-50 data. However, the report pointed  out that the Army needed to implement the report’s recommendations  before it can claim with complete confidence that it is meeting the 50-50  requirement. Headquarters officials responsible for the report told us  that the Army maintenance organizations concurred with the report’s  recommendations. The Army has already begun implementing some of its  report’s recommendations such as holding annual workshops and revising  its guidance to include the congressional definition of depot-level  maintenance. However, it has not yet developed an overall action plan for  managing the implementation of all of the recommendations and, in  particular, for setting priorities for the more-critical recommendations.
As the report indicates, corrective actions are essential to improving  the Army’s ability to better manage the proliferation of maintenance  facilities and capture data for 50-50 reporting. Some of the critical  recommendations, such as the need to identify opportunities for  consolidating depot-level maintenance facilities, set up a single integrated  management information system capable of capturing all depot-level  maintenance data, and develop a National Maintenance Program to better  manage depot-level maintenance work have been in process for several  years. Thus, the identification of specific actions would appear  necessary to help the Army accomplish the implementation of these  recommendations more timely. A plan would include (1) the Army’s  priority for implementing the recommendations, (2) the Army  organizations accountable for implementation, (3) the specific time frames  for accomplishment, (4) whether the benefits of accomplishment support  the cost of implementation, (5) the funding required and the source of  funds, and (6) the criteria to determine the effectiveness of the  recommendations once they are implemented.
Officials at the Army Communications-Electronics Command said that  streamlining maintenance facilities is a good idea, but they do not have the  tools that would enable the command to fully implement the proliferation  report’s recommendations in this area. They said that updating Army  Regulation 750-1 (Army Materiel Maintenance Policy) and conducting  50-50 workshops were a step in the right direction, but that both actions  need to be more comprehensive in educating field-level personnel  on policy and requirements. For example, they pointed out that just  reiterating the congressional definition of depot-level maintenance  in Army Regulation 750-1 did little to add clarity to the definition.  Additionally, the last two workshops were spent largely on training for the  Depot Maintenance Operations Planning System, a new system to be used  by all Army major commands and acquisition managers to capture and  report annual 50-50 workload data. According to these personnel, this  system appears extremely complex and training should be aimed at those  who are actually responsible for reporting maintenance data. Officials at  the National Guard Bureau generally disagreed that the Army report’s  recommendations will ensure accurate 50-50 reporting—especially in view  of the apparent disconnect between the recommendations and the Army’s  maintenance transformation process, and the Army’s plans for moving to  two-level maintenance.
Army Communications-Electronics Command officials also suggested  that, for timely and effective implementation, the Army establish a  working group of representatives with subject matter expertise from all  levels within the Army to oversee the implementation. Officials at Army  headquarters who were responsible for the report told us that they did not  yet have a formal action plan established. They said they were planning  to establish a working group in December 2003 to review the  recommendations and determine what actions needed to be taken.
section_title: Long-term Improvements in 50-50 Reporting May Remain Problematic
paragraphs: As previously discussed the Army has taken steps to improve its  management of the proliferation of depot-level maintenance facilities  and its 50-50 reporting. The Army’s 2003 report and our analysis  indicate that some of the key actions related to improving the Army’s  long-standing issues in effectively identifying the proliferation of  depot-level maintenance facilities and improving its 50-50 reporting  have been in process for several years. The magnitude of long-term  improvements likely to be realized remains uncertain, given prior delays in  instituting solutions and the inconsistent understanding and application of  50-50 reporting criteria.
During our review, we observed that several actions related to the  recommendations had been under way for a number of years but that  completion dates had slipped and funding had become uncertain. For  example, the recommendation that the Army continue efforts to establish  a fully integrated national maintenance requirements determination  process that includes all depot-level maintenance requirements refers to a  program known as the National Maintenance Program. The Army initiated  the program in July 1999 and planned to implement it by fiscal year 2004.  However, full implementation has slipped to fiscal year 2006. Additionally,  required funding to complete the program is uncertain. Army Materiel  Command officials said that the program’s goal is to centrally coordinate  and control depot-level maintenance work by developing standards for  items being repaired at qualified repair sources. They said that (1) the  program is helping to better identify and manage facilities that perform  depot-level maintenance outside the public depots; (2) the number of  maintenance facilities in the program has declined from 60 in fiscal year  2000 to 45 in fiscal year 2003, and these are expected to further decline to  25 in fiscal year 2005 as the Army decides which facilities will be qualified  to perform depot-level maintenance work; and (3) the command was  working with other commands to reduce the number of nondepot  maintenance facilities.
Full implementation of the National Maintenance Program appears to be  a key initiative in addressing the proliferation of depot-level maintenance  facilities. At the same time, our analysis indicates that, although the  concept of the National Maintenance Program could help improve future  annual reporting and eliminate some of the current fragmented and  duplicative depot-level maintenance workload assignments, it is too early  to assess the program’s full impact. The extent to which the program can  resolve all the problems related to the proliferation and inaccurate and  incomplete identification of depot-level maintenance work performed  in nondepot facilities is unclear. The Army’s 2003 report noted that the  Army’s schedule for completing the implementation of the National  Maintenance Program has slipped to fiscal year 2006. During our review,  we noted that, as of October 2003, the Army had completed standards for  only 737about 18 percentof the 4,148 candidates for the program.
While an estimated development cost of about $120 million has already  been spent, the Army is a long way from having the required standards that  are needed for the program. An Army Materiel Command official said that  the Army was not planning to provide any additional funding for the  further development of these standards.
In a prior report, we observed that, while the program is intended to  consolidate and distribute overhaul work for components returned to the  supply system, the evolving management framework will continue to allow  local maintenance facilities to repair items returned directly to using  organizations—maintenance-to-maintenance transactions that could meet  the statutory definition of depot-level maintenance. Additionally, the  program did not include some other depot-level maintenance work. For  example, it does not address the allocation of depot-level maintenance  requirements for overhauling, rebuilding, or upgrading major end items  such as tactical wheeled vehicles that are currently being overhauled in  field-level maintenance facilities or by contracts managed by field-level  organizations even though this work meets the statutory definition of  depot-level maintenance work.
With regard to resolving deficiencies in management information systems,  it is uncertain when the required changes that will be capable of capturing  and reporting depot-level maintenance workloads performed in nondepot  facilities will be operational. In October 2003, the Army began testing the  transition of its database for Specialized Repair Authority and One-Time  Repair authorizations into an automated system referred to as the Joint  Computer-Aided Acquisition and Logistic Support system. The Army’s  2003 report described this as an interim initiative to capture and report on  maintenance work performed under these two types of authorizations.  While this initiative will automate the capturing of this work, it will not  identify all depot-level maintenance work that may be performed in field- level facilities. For example, it will not capture depot-level maintenance  actions performed on equipment that will be returned directly to the user  without going through the Army’s supply system. A single integrated  management information system is hoped for when the Army’s evolving  Logistics Modernization Program is fully implemented. Testing at the first  site, the Tobyhanna Army Depot, is ongoing, but problems have occurred.  Earlier estimates of completion are about 18 to 24 months, but some  delays are expected. Additionally, to what extent it will resolve all the  deficiencies in the current systems is uncertain.
section_title: Conclusions
paragraphs: We believe that the Army’s implementation of our prior recommendations,  as well as the recommendations made in the Army’s proliferation report,  are essential to providing the Army with more precise information for  crucial decisions in the area of the Army’s depot-level maintenance  infrastructure. Their timely and effective implementation depends largely  on the necessary emphasis from senior Army leadership. If actions are  not implemented in a timely manner, the Army will unlikely have the  comprehensive information that it needs to determine the extent of  proliferation and effectively manage its excess capabilities and the  infrastructure it has—key data needed for complying with the existing  reporting statute, identifying excess infrastructure and making appropriate  consolidations, and making appropriate decisions for an additional round  of base realignments and closures that has been authorized for 2005.
The Army has not yet developed a plan for implementing the  recommendations in the Army proliferation report. We believe it is  essential that the Army have such a plan to help ensure the timely and  effective implementation of the recommendations. Such a plan would  include evaluating the priority for implementation and identifying the  time frame for implementing the recommendations, the responsible  organizations, and the criteria for measuring the desired results.
While improvements should be accomplished, the complexity and  vastness of the Army’s maintenance system and continuing questions  about such issues as the definition of depot-level maintenance and  changing maintenance strategies could continue to present challenges  in fully recording all depot-level maintenance work.
section_title: Recommendation
paragraphs: To ensure the timely and effective implementation of the  recommendations in the Army’s 2003 proliferation report to help the  Army improve its management of maintenance operations, including the  proliferation of depot-level maintenance facilities, and more precisely  capture and report depot-level maintenance data, we recommend that the  Secretary of the Defense direct the Secretary of the Army to establish a  specific plan to manage the implementation of the 29 recommendations  identified in the 2003 proliferation report. The plan should include the  priority and time frames for implementation, the responsible organizations  for implementing the plan, and the criteria for measuring success.
section_title: Agency Comments and Our Evaluation
paragraphs: The Department of Defense provided written comments (see app. IV) on a  draft of this report. In commenting on the draft, the Office of the Deputy  Undersecretary of Defense for Logistics and Materiel Readiness concurred  with our recommendation that the Army establish a plan to manage the  implementation of the 29 recommendations identified in the 2003 depot  maintenance proliferation report. The Department noted that the Army is  in the process of establishing an integrated product team to develop an  action plan to address the 29 recommendations to include reevaluating the  validity and modifying the recommendations where appropriate. The  Department also stated that the Army expects to have an action plan in  place no later than March 31, 2004. The Department’s response noted  specifically that the recommendation contained in the Army’s report  related to the designation of core work needs to be revised. We recognize  that some adjustment to the recommendations may be necessary as the  implementation plan is developed. Whether some recommendations  require modification for implementation is not as significant for the Army  as is the need for timely action and follow through to address the issues  identified in the Army’s depot maintenance proliferation report.
We are sending copies of this report to interested congressional  committees; the Secretary of Defense; the Secretary of the Army; and the  Director, Office of Management and Budget. We will make copies available  to others upon request. In addition, the report will be available at no  charge on the GAO Web site at http://www.gao.gov.
If you or your staff have questions regarding this report, please contact me  at (202) 512-8412 or holmanb@gao.gov or Julia Denman, Assistant  Director, at (202) 512-4290 or denmanj@gao.gov. Other major contributors  to this report were Nancy Benco, Wayne Gilliam, and Bobby Worrell.
section_title: Appendix I: Scope and Methodology
paragraphs: To answer the Senate and House Committees on Armed Services mandate  contained in Report of the Committee on Armed Services, House of  Representatives, Floyd D. Spence National Defense Authorization Act for  Fiscal Year 2001, we reviewed the Army’s Fiscal Year 2002 Study of the  Proliferation of Depot Maintenance-Type Activities Phase II Report, dated  July 31, 2003. We interviewed Army officials and analyzed pertinent  information regarding that report at (1) Army Headquarters in the  Washington, D.C., area; (2) Headquarters, Army Materiel Command in  Alexandra, Virginia; (3) three subordinate commands—the Army Aviation  and Missile Command, Huntsville, Alabama; Communications-Electronics  Command, Fort Monmouth, New Jersey; and the Tank-automotive and  Armaments Command, Warren, Michigan; (4) Headquarters, National  Guard Bureau, Arlington, Virginia; (5) Headquarters, Army Forces  Command, Atlanta, Georgia; and (6) Headquarters, Army Reserve  Command, Atlanta, Georgia. Also, we interviewed managers and  reviewed pertinent information regarding maintenance facilities located at  Fort Campbell, Kentucky; Fort McCoy, Wisconsin; Fort Riley, Kansas; and  Fort Rucker, Alabama. We made extensive use of our prior work related to  Army depot-level maintenance.
To determine the extent to which the Army’s report identified the total  amount of depot-level maintenance work performed at nondepot facilities,  we examined the requirements of section 2466 of title 10, U.S. Code, and  Army regulatory provisions for 50-50 reporting. We analyzed the report’s  scope and methodology, findings, and disclosure of the amount it  identified and compared these data with our prior work done on the  Army’s annual 50-50 reporting process. We interviewed the study group  manager, Army officials, and maintenance managers about the nature of  maintenance work performed by nondepot facilities and about whether it  was being reported as required. Because the Army has no central database  or readily available data, we did not attempt to determine the Army’s  universe of facilities that perform depot-level maintenance.
To answer whether the Army can accurately account for its depot-level  maintenance workloads and the key issues that preclude accurate  reporting, we examined the report’s findings to determine what areas were  identified as contributing problems. We used our prior work on the Army’s  depot-level maintenance program to correlate, compare, and test the  consistency of the identified problems with the ones we had previously  reported. We interviewed the study group manager, Army officials, and  maintenance personnel about the relevancy of the findings and the  application to the Army’s depot-level maintenance operations.
To answer whether the corrective actions identified in the Army’s report  are likely to address the proliferation issue and enhance the Army’s  reporting, we examined the recommendations to determine how  effectively they were linked to the identified problems. We also compared  the recommendations with those that we had previously made to test for  consistency. Finally, we discussed the relevancy of the recommendations  with the study group manager, Army officials, and maintenance  representatives.
We conducted our analysis of the Army’s report from July through  October 2003 in accordance with generally accepted government  auditing standards.
section_title: Appendix II: Army Maintenance Sites
paragraphs: The Army operates a number of maintenance facilities and has an  extensive infrastructure for the maintenance of its military weapons  systems and support equipment. For example, as we reported in April  2003, the Army employs about 10,000 personnel at its five public depots  to overhaul, repair, and upgrade its ground and air combat systems,  subsystems, and assemblies. The Army also has a vast number of other  maintenance facilities operated by U.S. government-employed civilians  and contractors. For example, we reported in October 1999 that the  Army had another 102 maintenance facilities that were potential  providers of depot-level maintenance services within the continental  United States—28 active Army, 2 Army Reserve, and 72 Army National  Guard.
In addition, the Army operates maintenance activities that provide  maintenance below the depot level. For example, as of August 2003,  the Forces Command reported that it had maintenance facilities at  10 installations that provide direct support for vehicle maintenance; the  Army reserve had about 160 maintenance facilities located throughout the  United States that perform unit, direct, and general maintenance support;  the National Guard had additional maintenance facilities performing unit  and direct support maintenance; and Army installations had a number of  maintenance facilities that perform various levels of maintenance.
We visited 17 of the Army, Army Reserve, and Army National Guard  maintenance sites. These 17 sites performed maintenance work valued  at more than $500 million during fiscal year 2002; employed more than  4,700 military, civilian, and contractor personnel; and occupied facilities  with more than 2 million square feet. Table 2 provides summary capacity  and capability information about the sites.
section_title: Appendix III: Army Report’s Issues and Recommendations
paragraphs: The Army’s Fiscal Year 2002 Study of the Proliferation of Depot  Maintenance-Type Activities identified 7 issues and made  29 recommendations for the following improvements to enhance the  Army’s ability to (1) evaluate the proliferation of nondepot facilities  that perform depot-level maintenance and (2) identify and report on  its 50-50 data. These recommendations were consistent with our  prior recommendations—noted in referenced GAO products.
Issue 1: Title 10 Definition of Depot Maintenance and 50-50 Reporting  Policy Guidance  Recommendations:    Post the new Army Regulation 750-1 as soon as possible to the Army  Publications Agency Web site. Posting the regulation will contribute to  the education of Army activities on the congressional definition of  “depot maintenance” and the 50-50 reporting process.
Continue to conduct annual 50-50 workshops and issue clear guidance  regarding depot maintenance policies to major commands, program  executive officers, and program managers.
Use Headquarters, Department of the Army, senior-level maintenance  boards to communicate depot maintenance policies.
Publish depot maintenance information articles in professional  publications.  [See also GAO-03-1023; U.S. General Accounting Office, Depot  Maintenance: Key Unresolved Issues Affect the Army Depot System’s  Viability, GAO-03-682 (Washington, D.C.: July 7, 2003); and U.S. General  Accounting Office, Depot Maintenance: Change in Reporting Practices  and Requirements Could Enhance Congressional Oversight, GAO-03-16  (Washington, D.C.: Oct. 18, 2002).]  Issue 2: Accuracy of Army’s Current 50-50 Reports  Recommendations    The Army Deputy Chief of Staff (G-4) should ensure that compliance  with the 50-50 rule becomes an Army priority and that command  emphasis is applied to correct all reporting problems.
Army G-4 should submit an amended 50-50 report for fiscal year 2002.
Army G-4 should include all Army major commands, program executive  offices, and separate commands in the 50-50 reporting process.  [See also GAO-03-1023; U.S. General Accounting Office, Depot  Maintenance: Workload Allocation Reporting Improved, but Lingering  Problems Remain, GAO/NSIAD-99-154 (Washington, D.C.: July 13, 1999);  and U.S. General Accounting Office, Depot Maintenance: Management  Attention Required to Further Improve Workload Allocation Data,   GAO-02-95 (Washington D.C.: Nov. 9, 2001).]  Issue 3: Specialized Repair Authority and One-Time Repair Workload  Reporting Requirements  Recommendations    Army G-4 should provide applicable major commands with immediate  and specific guidance to reinforce compliance with current Specialized  Repair Authority and One-Time Repair policies. Strong emphasis  should be placed on collecting One-Time Repair data for 50-50  reporting purposes.
Current policy and procedures regarding the approval and tracking of  One-Time Repair should be expanded in Army Regulation 750-1.
Major commands should appoint an installation or local Specialized  Repair Authority coordinator to ensure that (1) all major command  facilities at an installation are provided the most current information  on Specialized Repair Authority and One-Time Repair policies and  (2) the appropriate Specialized Repair Authority and One-Time Repair  production data are submitted properly through the installation or  local regional major command Specialized Repair Authority  coordinator to the major command headquarters. Similarly, the  National Guard Bureau should appoint Specialized Repair Authority  coordinators for each state, territory, and the District of Columbia.
Army G-4, in coordination with the Army Materiel Command (AMC),  should direct the Aviation and Missile Command to terminate the  existing Aviation Repair Authority process and immediately comply  with all Headquarters, Department of Army, Specialized Repair  Authority policies.  [See also U.S. General Accounting Office, Depot Maintenance: Change in  Reporting Practices and Requirements Could Enhance Congressional  Oversight, GAO-03-16 (Washington D.C.: Oct. 18, 2002).]  Issue 4: Army G-4 Guidance Regarding Depot Maintenance Reporting  Procedures  Recommendations    Army G-4 should revise the 50-50 standard operating procedures to  provide the major commands, program executive officers, and program  managers with more explicit guidance regarding those 50-50 reporting  requirements that are still causing confusion,    Army G-4 should coordinate with major commands, program executive  officers, and program managers to ensure that the standard operating  procedure revisions are clearly understood and that the 50-50 standard  operating procedures address the upgrade and modification programs.
Army G-4 should develop a “decision tree” (an easy-to-use reference  guide) to better distinguish between those programs that should be and  should not be reported.
Issue 5: Impact of National Maintenance Program on 50-50 Reporting  Processes Below Public Depot Level  Recommendations    AMC should continue efforts to establish a fully integrated national  maintenance requirements determination process that includes all  depot maintenance requirements.
The Army should complete the implementation of the National  Maintenance Program by fiscal year 2006 as currently planned.
The Army should conduct further analyses to identify opportunities for  consolidating depot-level maintenance activities.
Issue 6: Management Information System Requirements for Improving  Current Methods of Capturing and Reporting 50-50 Data  Recommendations    The Army should develop an integrated management information  system capable of capturing and reporting depot maintenance  workloads below the organic depot level. AMC should consider  replacing the interim Specialized Repair Authority business  systemthe combined Joint Computer-Aided Logistics Support  System/Logistics Integrated Database/Army Electronic Product  Support Systemswith a single integrated Specialized Repair  Authority tracking and workload system through the development of  the Logistics Modernization Program and as the various major  command feeder systems are either replaced or consolidated by way of  the development of the Global Combat Support System-Army.
Army G-4 should query AMC’s Logistics Integrated Database monthly  to ensure that major command activities are using the new Department  of the Army Pamphlet 738-750 maintenance codes for inputting  workload data into automated systems to account for Specialized  Repair Authority and One-Time Repair tasks embedded in maintenance  workloads at the installation level.
Army G-4 should continue to support AMC’s efforts to develop a  Maintenance Contract Database under the National Maintenance  Program.
Issue 7: DOD and Army Policies Affecting Army’s Ability to Manage the  Proliferation of Depot Maintenance Activities  Recommendations    New weapons systems should be designated as core or non-core up  front in the system’s life cycle at Milestone C (Production and  Deployment). The system’s Logistics Support Plan should be revised  accordingly on the basis of core depot assessment and presented at  Milestone C for approval.
The Army should adopt a new core depot assessment process for  weapons systems that have not yet undergone core determination  analyses.
The Army should continue to revise/replace flawed Department of the  Army policies that apply to the Depot Source of Repair (DSOR)  decision process. The primary objectives of this effort should be the  consistent compliance of all applicable legislation, regulations, and  policies, and to ensure that the organic depots are not excluded from  the DSOR decision process.
The Army should audit/review program executive officer, program  manager, and AMC activities to ensure that they are following guidance  on core logistics requirements, weapons system support strategies, and  the DSOR decision process in accordance with the Assistant Secretary  of the Army for Acquisition, Logistics, and Technology   memorandum dated January 9, 2003, entitled Depot Considerations in  Acquisition.
The ASA (ALT) should develop an Army acquisition policy that requires  program executive officers and program managers to acquire access to  system technical data owned by the original equipment manufacturer  for use by appropriate organic or contractor maintenance facilities  during the performance of system logistical support.
The ASA (ALT), Army G-4, and AMC should establish a partnership  with an approved memorandum of agreement to integrate acquisition  weapons system requirements with traditional end item and secondary  item overhaul requirements to (1) assist AMC in maximizing the  capabilities of the five organic depots to meet core requirements and  (2) seek a renewed commitment from all parties that the depots will  not be excluded from the DSOR process without the required analyses  being conducted.
Army G-4, ASA (ALT), and AMC should work closely together to  develop and implement a plan for documenting baseline data to  compare contractor costs with organic support costs.
Army G-4, ASA (ALT), AMC, and AMC’s major subordinate commands  should work closely with Headquarters, Department of the Army ASA  (ALT) staff to market the depots with the program executive officers  and program managers at every opportunity.
section_title: Appendix IV: Comments from the Department of Defense
section_title: Related GAO Products
paragraphs: Depot Maintenance: DOD’s 50-50 Reporting Should Be Streamlined.  GAO-03-1023. Washington, D.C.: September 15, 2003.
Depot Maintenance: Key Unresolved Issues Affect the Army Depot  System’s Viability. GAO-03-682. Washington, D.C.: July 7, 2003.
Department of Defense: Status of Financial Management  Weaknesses and Progress Toward Reform. GAO-03-931T.  Washington, D.C.: June 25, 2003.
Depot Maintenance: Change in Reporting Practices and Requirements  Could Enhance Congressional Oversight. GAO-03-16. Washington D.C.:  October 18, 2002.
Depot Maintenance: Management Attention Needed to Further  Improve Workload Allocation Data. GAO-02-95. Washington D.C.:  November 9, 2001.
Defense Logistics: Actions Needed to Overcome Capability Gaps in the  Public Depot System. GAO-02-105. Washington, D.C.: October 12, 2001.
Defense Maintenance: Sustaining Readiness Support Capabilities  Requires a Comprehensive Plan. GAO-01-533T. Washington, D.C.;  March 23, 2001.
Depot Maintenance: Key Financial Issues for Consolidations at Pearl  Harbor and Elsewhere Are Still Unresolved. GAO-01-19. Washington, D.C.:  January 22, 2001.
Depot Maintenance: Action Needed to Avoid Exceeding Ceiling  on Contract Workloads. GAO/NSIAD-00-193. Washington, D.C.:  August 24, 2000.
Depot Maintenance: Air Force Waiver to 10 U.S.C. 2466.   GAO/NSIAD-00-152R. Washington, D.C.: May 22, 2000.
Depot Maintenance: Air Force Faces Challenges in Managing to 50-50  Ceiling. GAO/T-NSIAD-00-112. Washington, D.C.: March 3, 2000.
Depot Maintenance: Future Year Estimates of Public and Private  Workloads Are Likely to Change. GAO/NSIAD-00-69. Washington, D.C.:  March 1, 2000.
Depot Maintenance: Army Report Provides Incomplete Assessment  of Depot-Type Capabilities. GAO/NSIAD-00-20. Washington, D.C.:  October 15, 1999.
Depot Maintenance: Status of the Navy’s Pearl Harbor Project.  GAO/NSIAD-99-199. Washington, D.C.: September 10, 1999.
Depot Maintenance: Workload Allocation Reporting Improved, but  Lingering Problems Remain. GAO/NSIAD-99-154. Washington, D.C.:  July 13, 1999.
Navy Ship Maintenance: Allocation of Ship Maintenance Work in  the Norfolk, Virginia, Area. GAO/NSIAD-99-54. Washington, D.C.:  February 24, 1999.
Defense Depot Maintenance: Public and Private Sector Workload  Distribution Reporting Can Be Further Improved. GAO/NSIAD-98-175.  Washington, D.C.: July 23, 1998.
Defense Depot Maintenance: DOD Shifting More Workload for New  Weapon Systems to the Private Sector. GAO/NSIAD-98-8. Washington,  D.C.: March 31, 1998.
Defense Depot Maintenance: Information on Public and Private  Sector Workload Allocations. GAO/NSIAD-98-41. Washington, D.C.:  January 20, 1998.
Defense Depot Maintenance: Uncertainties and Challenges DOD Faces  in Restructuring Its Depot Maintenance Program. GAO/T-NSIAD-97-112.  Washington, D.C.: May 1, 1997. Also, GAO/T-NSIAD-97-111. Washington,  D.C.: March 18, 1997.
Defense Depot Maintenance: DOD’s Policy Report Leaves Future Role  of Depot System Uncertain. GAO/NSIAD-96-165. Washington, D.C.:  May 21, 1996.
Defense Depot Maintenance: More Comprehensive and Consistent  Workload Data Needed for Decisionmakers. GAO/NSIAD-96-166.  Washington, D.C.: May 21, 1996.
Defense Depot Maintenance: Privatization and the Debate Over  the Public-Private Mix. GAO/T-NSIAD-96-148. Washington, D.C.:  April 17, 1996. Also, GAO/T-NSIAD-96-146. Washington, D.C.:  April 16, 1996.
Depot Maintenance: Issues in Allocating Workload Between the  Public and Private Sectors. GAO/T-NSIAD-94-161. Washington, D.C.:  April 12, 1994.