Depot Maintenance: Improved Strategic Planning Needed to Ensure That Army and Marine Corps Depots Can Meet Future Maintenance Requirements
Published: 2009-09-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Army and Marine Corps maintenance depots provide critical support to ongoing military operations in Iraq and Afghanistan and are heavily involved in efforts to reset the force. The Department of Defense (DOD) has an interest in ensuring that the depots remain operationally effective, efficient, and capable of meeting future maintenance requirements. In 2008, in response to direction by the Office of the Secretary of Defense (OSD), the Army and the Marine Corps each submitted a depot maintenance strategic plan. Our objective was to evaluate the extent to which these plans provide comprehensive strategies for meeting future depot maintenance requirements. GAO determined whether the plans were consistent with the criteria for developing a results-oriented management framework and fully addressed OSD's criteria.
section_title: What GAO Found
paragraphs: The depot maintenance strategic plans developed by the Army and Marine Corps identify key issues affecting the depots, but do not provide assurance that the depots will be postured and resourced to meet future maintenance requirements because they do not fully address all of the elements required for a comprehensive, results-oriented management framework. Nor are they fully responsive to OSD's direction for developing the plans. While the services' strategic plans contain mission statements, along with long-term goals and objectives, they do not fully address all the elements needed for sound strategic planning, such as external factors that may affect how goals and objectives will be accomplished, performance indicators or metrics that measure outcomes and gauge progress, and resources required to meet the goals and objectives. Also, the plans partially address four issues that OSD directed the services, at a minimum, to include in their plans, such as logistics transformation, core logistics capability assurance, workforce revitalization, and capital investment. Army and Marine Corps officials involved with the development of the service strategic plans acknowledged that their plans do not fully address the OSD criteria, but they stated that the plans nevertheless address issues they believe are critical to maintaining effective, long-term depot maintenance capabilities. The Army's and Marine Corps' plans also are not comprehensive because they do not provide strategies for mitigating and reducing uncertainties in future workloads that affect the depots' ability to plan for meeting future maintenance requirements. Such uncertainties stem primarily from a lack of information on (1) workload that will replace current work on existing systems, which is expected to decline, and (2) workload associated with new systems that are in the acquisition pipeline. According to depot officials, to effectively plan for future maintenance requirements, the depots need timely and reliable information from their major commands on both the amounts and types of workloads they should expect to receive in future years. Depot officials told us that the information they receive from their major commands on their future workloads are uncertain beyond the current fiscal year. Officials cited various factors that contribute to these uncertainties, such as volatility in workload requirements, changing wartime environment, budget instability, and unanticipated changes in customer orders. In addition, depot officials said that they are not involved in the sustainment portion of the life cycle management planning process for new and modified systems. No clear process exists that would enable them to have input into weapon system program managers' decisions on how and where new and modified systems will be supported and maintained in the future. Unless they are integrated in this planning process, these officials said, the depots will continue to have uncertainties about what capabilities they will need to plan for future workloads and what other resources they will need to support new and modified weapon systems.

section_title: Letter
paragraphs: Army and Marine Corps maintenance depots support combat readiness by  providing repair and manufacturing capability that is needed to keep  weapon systems and other equipment in good working order. The depots  have provided critical support to ongoing military operations and are  heavily involved in efforts to reset the force. The organic maintenance  capability provided by the depots also helps to fulfill requirements under  Title 10 of the U.S. Code, which directs the Department of Defense (DOD)  to maintain a core logistics capability and limit the percentage of annual  funding that may be used for depot maintenance performed by  contractors. Given the important role of the depots in sustaining a ready  force and fulfilling Title 10 requirements, DOD has an interest in ensuring  that the depots remain operationally effective, efficient, and capable of  meeting future maintenance requirements. At the same time, DOD has  been relying on contractors to support many of its weapons systems and,  in 2001, identified performance-based logistics as its preferred support  strategy. Prior to the onset of military operations in Iraq and Afghanistan,  DOD’s increased reliance on the private sector for depot maintenance  support—coupled with declining budgets, downsizing, and consolidations  as a result of previous Base Realignment and Closure Act (BRAC)  decisions—had led to a decline in depot-level maintenance workloads and  contributed to the general deterioration of capabilities at military depots.  The depots subsequently experienced a surge in workload as a result of  operations in Iraq and Afghanistan. For example, they installed protective  armor for trucks and repaired battle-damaged equipment.
In response to direction from the Office of the Secretary of Defense  (OSD), both the Army and the Marine Corps developed depot  maintenance strategic plans for their military depots and, in 2008,  submitted them for review to DOD. The intent of these strategic plans,  according to the OSD criteria, is to ensure the depots are postured and  resourced to meet future requirements. Our objective was to evaluate the  extent to which their plans provide a comprehensive strategy for meeting  future depot maintenance requirements. In addition, we obtained  information on depot productivity improvements (see app. II) and on  workforce trends between fiscal years 1999 and 2008 (see app. III). This  report is one in a series of reviews focusing on DOD’s logistics and  maintenance operations. In April 2008, we briefed your office on the  preliminary results of our work on the military departments’ depot capital  investments. In July 2008, we reported on the increased carryover work  occurring at the five Army depots. In December 2008, we reported on the  implementation and impact of performance-based logistics arrangements  on weapon system support costs. In May 2009, we reported on DOD’s  efforts to establish the required core capability for fielded, new, and  modified systems.
In conducting our work, we analyzed the services’ depot maintenance  strategic plans to determine if they were consistent with criteria for  developing a comprehensive results-oriented management framework and  addressed OSD’s criteria for developing a strategic plan. We discussed  these plans with officials from the Army, the Marine Corps, and the Office  of the Under Secretary of Defense for Logistics and Materiel Readiness. To  gain further perspective on the plans and related issues that affect the  depots’ posture for meeting future maintenance requirements, we visited  the Army’s five maintenance depots (Anniston, Corpus Christi,  Letterkenny, Red River, and Tobyhanna) and both of the Marine Corps’  maintenance depots (Albany and Barstow). We also obtained data on the  depots’ workload and workforce trends, as well as information on actions  aimed at improving depot productivity. Although each of the military  services was required to submit its depot maintenance strategic plan to  OSD, we decided to focus our initial work on the Army’s and Marine  Corps’ plans because of these services’ significant role in supporting  overseas contingency operations in Iraq and Afghanistan. As agreed with  your offices, we plan to report separately on the Air Force and Navy depot  maintenance strategic plans.
We conducted this performance audit from August 2007 through  September 2009 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives. A more detailed  description of our scope and methodology is included in appendix I.
subsections: section_title: Background
paragraphs: The Army and Marine Corps maintain organic depot maintenance  capabilities that are designed to retain, at a minimum, a ready, controlled  source of technical competence and resources to meet military  requirements. In fiscal year 2008, DOD budgeted about $5.6 billion for the  five Army and two Marine Corps maintenance depots and maintained a  workforce of about 26,000 personnel at these facilities. Depot-level  maintenance and repair involves materiel maintenance or repair requiring  the overhaul, upgrading or rebuilding of parts assemblies and  subassemblies, and testing and reclamation of equipment as necessary,  regardless of the source of funds for the maintenance or repair or the  location at which the maintenance or repair is performed. Army and  Marine Corps depots work on a wide range of weapon systems and  military equipment, such as combat vehicles, aircraft, and communications  and electronics equipment. Each of the services’ depot-level activities has  been designated as a Center for Industrial and Technical Excellence in the  recognized core competency of the designee, pursuant to Section 2474 of  Title 10, U.S Code. Table 1 describes the principal work performed at each  Army and Marine Corps depot.
During the late 1980s and the late 1990s, Army and Marine Corps  maintenance depots—like other DOD depots—were significantly  downsized as a result of reductions in the armed forces and DOD’s  decision to outsource many logistics activities, including depot  maintenance, to the private sector. These downsizing efforts contributed  to decreased workloads at the depots and diminished their capability,  reliability, and cost effectiveness for supporting requirements for legacy  systems; it also reduced their opportunities to acquire work for new and  modified weapon systems. The downsizing also affected the depots’ ability  to obtain investments in facilities, equipment, and human capital to  support their long-term viability and to ensure that they remained a key  resource for repair of new and modified systems. As a result, DOD’s  depots had become facilities that primarily repaired aging weapon systems  and equipment. In 2003, Army and Marine Corps depots experienced an  increase in workload, stemming from overseas contingency operations in  Iraq and Afghanistan. Contributing to this increase were efforts to reset  systems such as the High Mobility Multipurpose Wheeled Vehicle, the M1  Abrams Tank, and the Bradley Fighting Vehicle, as well as work related to  armor fabrication and the armoring of systems such as the Medium  Tactical Vehicle Replacement. Despite the increase in workload, the Army  and Marine Corps lacked direction from DOD on a department wide  strategic depot plan that clarified the future role of the military depots. We  reported in April 2003 that the services and DOD had not implemented  comprehensive strategic plans for defense maintenance to revitalize or  protect the future viability of their depot facilities, equipment, and  workers.  In that report, we recommended that the services develop  depot strategic plans that are linked to the services’ missions and  objectives, and that DOD develop a strategic plan that provides guidance  and a schedule for identifying long-term capabilities to be provided in  government-owned and -operated plants.
The House Armed Services Committee has previously encouraged DOD to  develop a comprehensive strategy to ensure that the depots are viably  positioned, and that they have the workforce, equipment, and facilities  they need to maintain efficient operations to meet the nation’s current and  future requirements. In March 2007, the Under Secretary of Defense for  Acquisition, Technology, and Logistics approved the DOD Depot  Maintenance Strategy and Implementation Plans, which articulated OSD’s  strategy and plans for ensuring that the department’s organic depot  maintenance infrastructure is postured and resourced to meet the national  security and management challenges of the 21st century. The plan also  specified that each military service was responsible for conducting  strategic planning for depot maintenance that focused on achieving DOD’s  strategy. OSD required the services to submit the results of their strategic  plans no later than 6 months after the publication of DOD’s plan. In March  2007, the Deputy Under Secretary of Defense for Logistics and Materiel  Readiness modified this requirement to have each service submit either its  published depot maintenance strategic plan, or a report describing the  process being used to develop its strategic plan, and a target date for  completing the plan by September 1, 2007. The Army and Marine Corps  finalized and submitted their strategic plans to OSD in 2008. In addition,  the Army developed an implementation plan to accompany its strategic  plan. The Marine Corps did not produce an implementation plan.
section_title: Strategic Plans Lack Elements Needed to Position the Depots to Meet Future Maintenance Requirements
paragraphs: While the depot maintenance strategic plans developed by the Army and  the Marine Corps identify key issues affecting the depots, they do not fully  address all of the elements required to achieve a results-oriented  management framework, and they are not fully responsive to OSD’s  direction to the services for developing their plans. Furthermore, these  plans do not address uncertainties in workload that affect the depots’  ability to plan for meeting future maintenance requirements. Finally, they  do not show whether and how the depots will have a role in planning for  the sustainment of new and modified weapon systems. As a result of these  deficiencies in their strategic plans, the Army and Marine Corps may lack  assurance that their depots are postured and resourced to meet future  maintenance requirements.
subsections: section_title: Strategic Maintenance Plans Do Not Fully Address All the Elements That Are Needed for a Results-Oriented Management Framework
paragraphs: The Army’s and the Marine Corps’ depot maintenance strategic plans do  not fully address all of the elements that are needed for a comprehensive  results-oriented management framework. In addition, the plans are not  fully responsive to OSD’s direction to the services for developing these  plans. Our prior work has shown that organizations need sound strategic  management planning in order to identify and achieve long-range goals  and objectives. We have identified critical elements that should be  incorporated in strategic plans to establish a comprehensive, results- oriented management framework. A results-oriented management  framework provides an approach whereby program effectiveness is  measured in terms of outcomes or impact, rather than outputs, such as  activities and processes. The framework includes critical elements such as  a comprehensive mission statement, long-term goals and objectives,  approaches for accomplishing goals and objectives, stakeholder  involvement, external factors that may affect how goals and objectives will  be accomplished, performance goals that are objective, quantifiable, and  measurable, resources needed to meet performance goals, performance  indicators or metrics that measure outcomes and gauge progress, and an  evaluation plan that monitors the goals and objectives. OSD also directed  the services to include many of the elements in their depot maintenance  strategic plans. Specifically, the OSD criteria stated that each military  service’s plan should include a comprehensive mission statement, general  goals and objectives (including outcome-related goals and objectives), a  description of how the goals and objectives are to be achieved, metrics  that will be applied to gauge progress, key factors external to the  respective service and beyond its control that could significantly affect the  achievement of their general goals and objectives, and descriptions of the  program evaluations used in establishing, monitoring, or revising goals and  objectives, with a schedule for future program evaluations. Furthermore,  OSD directed the services to address a number of specific issues in their  strategic plans, including logistics transformation, core logistics capability  assurance, workforce revitalization, and capital investment. OSD wanted  the services, at a minimum, to address these four issues because it  believed they were critical to ensuring the depots would be postured and  resourced to meet future requirements.
Based on our evaluation of the Army’s and Marine Corps’ depot  maintenance strategic plans, we found that the plans partially address the  elements for a results-oriented management framework. While the  services’ strategic plans address key issues affecting the depots and  contain mission statements, along with long-term goals and objectives,  they do not fully address all the elements needed for sound strategic  planning. Elements not fully addressed in the strategic plans are    Approaches for accomplishing goals and objectives;    Stakeholder involvement in developing the plan;    External factors that may affect how goals and objectives will be    Performance goals that are objective, quantifiable, and measurable;    Resources required to meet performance goals;    Performance indicators or metrics that measure outcomes and gauge  progress of the goals and objectives; and    An evaluation plan that monitors the goals and objectives.
Table 2 summarizes, based on our evaluation, the extent to which the  Army and Marine Corps depot maintenance strategic plans address the  strategic planning elements needed for a comprehensive results-oriented  management framework.
The Army’s and Marine Corps’ depot maintenance strategic plans partially  address logistics transformation, core logistics capability assurance,  workforce revitalization, and capital investment—the four issues that OSD  directed each service, at a minimum, to include in their plans. Table 3  summarizes, based on our evaluation, the extent to which the Army and  Marine Corps depot maintenance strategic plans discuss these four issues.
Army and Marine Corps officials involved with the development of the  service strategic plans acknowledged that their plans do not fully address  the OSD criteria, but they stated that the plans nevertheless address issues  they believe are critical to maintaining effective, long-term depot  maintenance capabilities. An official in the Office of the Deputy Chief of  Staff of the Army, G4,  who was involved with the Army’s depot  maintenance strategic plan acknowledged that the Army’s plan does not  fully address OSD’s criteria. According to this official, the Army’s plan  focuses on issues of greatest priority to the service’s depots. The official  added that the OSD criteria lacked clear and specific instructions to the  services. According to an official in the Marine Corps’ Logistics Plans,  Policy, and Strategic Mobility Division who was involved with that  service’s depot maintenance strategic plan, the Marine Corps’ plan was  intended to be only an overarching outline and was not intended to  provide the detailed “nuts and bolts” that would be needed for  implementation. The Army and Marine Corps have not updated their  strategic plan since initially submitting them to OSD in 2008, and since that  time neither service has received notice from OSD that its plan did not  meet OSD’s criteria or should be revised and updated. An OSD official in  the Office of the Deputy Secretary of Defense for Logistics and Materiel  Readiness told us that although the services’ strategic plans are not  completely responsive to OSD’s direction, they represent a good first start  on developing a strategic plan. Although OSD plans to require the services  to update their plans, this official told us that OSD would wait until after  completion of the Quadrennial Defense Review. That review is to be  completed in early 2010. According to the OSD official, it would be  counterproductive to ask the services to update their strategic plans in  2009 and then update them again following the Quadrennial Defense  Review.
section_title: Strategic Plans Do Not Address Uncertainties in Workload That Affect the Depots’ Ability to Plan for Meeting Future Maintenance Requirements
paragraphs: The Army’s and Marine Corps’ depot maintenance strategic plans do not  provide strategies for mitigating and reducing uncertainties in future  workloads that affect the depots’ ability to plan for meeting future  maintenance requirements. These uncertainties stem primarily from a lack  of information from the depots’ major commands on workload that will  replace current work on legacy systems, which is expected to decline, as  well as workload associated with new systems that are in the acquisition  pipeline (which is discussed further in the next section of this report).  Workload uncertainties hinder effective planning for meeting future depot  maintenance requirements because workload is a key driver in planning  for the necessary capabilities such as workforce skills, equipment, and  infrastructure. Depot officials said that these resources require significant  lead times to develop and put in place to effectively respond to the  customers’ needs. In the absence of timely and reliable data on future  workloads, the depots’ efforts to identify and develop needed capabilities  and to conduct workforce planning may be adversely affected.
The depots’ major commands generate workload projections from  workload forecasting systems and are based on past history and  discussions with customers about workload planned for the depots. The  Army uses the Army Workload and Performance System as a tool for  projecting future workloads, coordinating personnel requirements,  managing resources, and tracking performance. The Marine Corps use the  Principle End Item Stratification Module within the Material Capability  Decision Support System to determine its depot level maintenance  requirements. Army and Marine Corps guidance identifies workload as a  key planning factor for supporting the expected life of a materiel system.  For example, Army Regulation 750-1, Army Materiel Maintenance Policy,  states that a depot maintenance capability will be established and  sustained on the basis of workload generated by those weapon systems  and materiel that is essential to the completion of the Army’s primary roles  and mission. The Marine Corps’ Depot Level Maintenance Program guide  establishes general guidelines for planning workloads for the depots.
Although the services have guidance, systems, and processes for workload  planning, depot officials told us that the workload forecasts they receive  from their major commands are unreliable beyond the current fiscal year.  Officials cited various factors that contribute to workload uncertainties,  such as the volatility in workload requirements; changing wartime  environment; budget instability, including the timing of and heavy reliance  on supplemental funding; and unanticipated changes in customer orders.  Depot officials also cited other factors such as delayed work returning  from theater and workload cancellations. Depot officials told us that they  were not in a position to address these factors on their own, and that  reducing or mitigating future workload uncertainties would require  substantial involvement of the service headquarter organizations and  major commands that are responsible for managing the depots. Officials at  the TACOM Life Cycle Management Command, one of the commands  that support two Army depots, said that they too had difficulty forecasting  workload flowing to the depots because of factors that were outside their  control, such as technology development and surge requirements. Marine  Corps Logistics Command officials said that they are currently  implementing an enterprise-level maintenance program that focuses on  how to better identify future year requirements.
Army and Marine Corps depot officials expressed particular concern that  they lacked information on workloads that might replace some of their  current work on legacy systems that is expected to decline due to various  factors, including a drawdown of U.S. forces resulting from a decline in  combat operations in Iraq and from the 2005 BRAC decisions. For  example, Anniston Army depot’s work on the M1 Abrams tank fleet is  projected to decrease from about 6,000 tanks to 2,500 tanks by fiscal year  2013, as a result of the Army’s projected decline in demand. In addition,  the 2005 BRAC decision is expected to reduce future workload at the  Marine Corps’ Barstow depot by about 30 percent by fiscal year 2011,  when BRAC is fully implemented. Moreover, Army and Marine Corps  officials noted that the surge in workload resulting from operations in Iraq  could be masking a decline in traditional organic depot work that occurred  during this operation. Furthermore, these officials expressed concern that  they lack information on workload associated with new and modified  systems in the acquisition pipeline that will require future maintenance  support at the depots. Depot officials also said that they are not involved  in the sustainment portion of the life cycle management planning process  for new and modified systems. Army Aviation and Missile Command  officials said that the life cycle sustainment planning process is a  responsibility of the program manager. While the command is  operationally aligned with the program manager and plays a significant  role in deciding how weapon systems will be supported, they do not  include the depots in this planning process.
Both the Army’s and the Marine Corps’ depot maintenance strategic plans  recognize that forecasting workload is important to the depots. However,  while the Army’s strategic plan notes the need to identify sufficient work  for its depots, it does not explain how or when the Army will take steps to  develop more reliable forecasts or take other steps that could reduce or  mitigate depot workload uncertainties. The Marine Corps’ strategic plan  also mentions workload estimating, stating that the Marine Corps plans to  forecast depot maintenance workload with sufficient lead time to allow it  to analyze the required depot capabilities. However, the strategic plan  does not specify how the depots will be involved in this process, how this  process will be accomplished, or who is going to be held accountable to  ensure that this process is performed.
section_title: The Plans Do Not Address Whether and How the Depots Will Have a Role in Planning for the Sustainment of New and Modified Weapon Systems
paragraphs: Neither the Army’s nor the Marine Corps’ strategic plans address whether  and how the depots will be integrated into the sustainment portion of the  life cycle management planning process for new and modified weapon  systems. During this process, weapon system program managers plan for  how and where a new or modified system will be supported and  maintained in the future—decisions that have a profound impact on  planning future depot workload and related infrastructure, capital  investments, and workforce requirements. According to depot officials,  they are not involved in the program managers’ planning because no clear  process exists that would enable them to have input.
The department’s overarching acquisition guidance, DOD Directive  5000.01, states that the program manager shall be the single point of  accountability for accomplishing program objectives for total life-cycle  systems management, including sustainment. While program managers are  required to assign work to the depots to maintain core capabilities, they  have no formal requirement to include the depots in the sustainment  planning process to determine how a weapon system will be supported. In  prior reports, we have noted that program managers often make decisions  to contract out the repair of new and modified systems without  considering the impact of these decisions on the requirement to maintain  core capability for essential systems in military depots. Our recent report  on core depot maintenance indicates that shortcomings in DOD’s  acquisition guidance and its implementation have resulted in DOD  program managers not identifying and establishing required core  capability at military depots in a timely manner—capability that will be  needed to support future maintenance requirements for new and modified  systems.
The depots’ lack of involvement in life cycle management planning limits  their ability to influence how weapon systems being acquired by their  service will be sustained, and also plan for and develop capabilities they  will need to support these systems in the future. For example, even though  Red River Army depot is designated as the primary repair facility for  Bradley Fighting Vehicles, depot planners stated that they were not  involved in the Army’s life cycle management planning process to decide  which facility would have full capability to perform the test and repair  work on the newer model of the Bradley A3. As a result, this depot  received minimal work associated with this weapon system, while the  majority of this work—including the testing on the turret and the major  overhaul of the system—went to a private contractor.
According to depot officials, including the depots in the sustainment  portion of the life cycle management planning process cannot be achieved  without full participation and coordination between the sustainment and  acquisition communities, and without consistent communication between  the services’ major commands and the depots during the process of  determining how new and modified systems will be sustained. The Army  Materiel Command’s Industrial Base Strategic Plan notes the importance  of developing a process that provides closer interface between the  acquisition and sustainment communities to ensure that future weapon  system requirements are matched with organic sustainment capabilities  early in the acquisition process. Also, the Marine Corps Logistics  Command’s Alignment and Integration Strategic Plan emphasizes the  importance of this command to assist program managers with the planning  and execution of total life cycle management responsibilities for their  weapon systems. Without a clear process to integrate the depots in the  sustainment portion of the life cycle management planning process, the  depots cannot determine what capabilities are needed to plan for future  workloads and what other resources are needed to support new and  modified weapon systems.
section_title: Conclusions
paragraphs: The Army and Marine Corps face some challenges to ensure that their  maintenance depots will remain operationally effective, efficient, and  capable of meeting future maintenance requirements. The increased  reliance on contractor support for weapon systems, including contractor  support provided through performance-based logistics, and the continuing  uncertainties about workload, increase the risk that the depots may not be  postured and resourced to meet future requirements. These issues, if not  addressed, could adversely affect materiel readiness and future depot  operations and potentially lead to equipment shortages and delays in  meeting the combatant commander’s requirements. While strategic  planning is a valuable management tool to help mitigate the challenges  facing the depots, the Army and Marine Corps plans as currently written  are not comprehensive enough for this purpose. The plans do not fully  address all the elements needed for a results-oriented management  strategy or the specific issues that OSD directed each service, at a  minimum, to include in their plans. Furthermore, until the services address  problems caused by workload uncertainties, the depots will continue to  have difficulties planning for future maintenance requirements. Regarding  workload uncertainties for systems that have yet to enter the defense  inventory, without a clear process for integrating the depots into the  sustainment portion of the life cycle management planning process, the  depots may continue to lose key opportunities to develop needed  capabilities that would enable them to provide depot level maintenance  support for new and modified systems.
section_title: Recommendations for Executive Action
paragraphs: To provide greater assurance that the military depots will be postured and  resourced to meet future maintenance requirements, we recommend that  the Secretary of Defense direct the Secretary of the Army and the  Commandant of the Marine Corps to take the following three actions to  update the depot maintenance strategic plans:    Fully address all elements needed for a comprehensive results-oriented  management framework, including those elements partially addressed in  the current plans-—such as the approaches for accomplishing goals and  objectives, stakeholder involvement, external factors that may affect how  goals and objectives will be accomplished, performance goals that are  objective, quantifiable, and measurable, resources needed to meet  performance goals, performance indicators used to measure outcomes and  gauge progress, and an evaluation plan that monitors goals and objectives.
Fully address the four specific issues of logistics transformation, core  capability assurance, workforce revitalization, and capitalization,  consistent with OSD criteria provided to the services.
Develop goals and objectives, as well as related strategic planning  elements, aimed at mitigating and reducing future workload uncertainties.  As part of this last effort, the Army and Marine Corps should develop a  clear process for integrating the depots’ input into the sustainment portion  of the life cycle management planning process for systems in the  acquisition pipeline.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD concurred with all  three of our recommendations to provide greater assurance that the  military depots will be postured and resourced to meet future  maintenance requirements. DOD’s written comments are reprinted in  appendix IV.
The department concurred with our first two recommendations to direct  the Army and the Marine Corps to update their depot maintenance  strategic plans to fully address all elements needed for a comprehensive  results-oriented management framework, and fully address the four  specific issues of logistics transformation, core capability assurance,  workforce revitalization, and capitalization, consistent with OSD criteria  provided to the services. DOD stated that they will reiterate and  incorporate these recommendations into the next update of the strategic  plan. While this is a step in the right direction, DOD did not indicate what  steps, if any, it plans to take to ensure that the Army and Marine Corps will  also incorporate these recommendations into their depot maintenance  strategic plans. Therefore, DOD may need to take further action by  following up with the Army and Marine Corps to ensure that they fully  incorporate these recommendations into their depot maintenance  strategic plans.
DOD also concurred with our third recommendation to direct the Army  and Marine Corps to develop goals and objectives for mitigating and  reducing future workload uncertainties and integrate the depot’s input into  the sustainment portion of the life cycle management planning process.  DOD stated that the Army has initiated several actions to mitigate and  reduce uncertainties in projecting future depot workload and to ensure  viability of the depot workforce. DOD said that the Army has established  integrated product teams to address core workload shortfalls and  developed an action plan and the resources and time line required to  transfer sufficient workload from the original equipment manufacturers to  the applicable Army depot to meet core requirements. In addition, DOD  said that the Army has begun to develop policy that would require review  of Core Logistic Assessments / Core Depot Assessments and Source of  Repair Analyses during the milestone decision review process, and to  develop a comprehensive training package for export to program  executive officers and program managers, Life Cycle Management  Commands, and depots. While these are positive steps that would help to  improve future workload planning, these steps focus on addressing core  requirements and do not fully address the need to mitigate and reduce  workload uncertainties or to include the depots’ input into the  sustainment portion of the life cycle management planning process for  systems in the acquisition pipeline. We continue to believe the depots will  have difficulties planning for future maintenance requirements until the  services develop solutions for mitigating and reducing uncertainties across  the full range of the depots’ workloads. We also continue to believe that  without a clear process for integrating the depots into the sustainment  portion of the life cycle management planning process, the depots will  continue to lose key opportunities to develop capabilities that would  enable them to provide depot-level support for systems in the acquisition  pipeline. The department reiterated its plan to incorporate our  recommendations into the next update of the strategic plan. As we stated  above with regard to our first two recommendations, DOD may need to  take further action by following up with the Army and Marine Corps to  ensure that they fully incorporate this recommendation into their depot  maintenance strategic plans.
We are sending copies of this report to the appropriate congressional  committees and the Secretary of Defense, the Secretaries of the Army, the  Navy, the Air Force, and the Commandant of the Marine Corps. In  addition, this report will be available at no charge on the GAO Web site at  http://www.gao.gov.
Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report. If you or your staff  have questions about this report, please contact me at (202) 512-8365 or  solisw@gao.gov. Key contributors to this report are listed in appendix VI.
section_title: Appendix I: Scope and Methodology
paragraphs: To evaluate the extent to which the Army’s and Marine Corps’ strategic  plans provide a comprehensive strategy for meeting future depot  maintenance requirements, we assessed the Army’s April 2008 Depot  Maintenance Enterprise Strategic Plan, and the Marine Corps February  2008 Depot Maintenance Strategic Plan to determine if they are consistent  with the criteria for developing a comprehensive results-oriented  management framework as indicated in GAO’s prior work on strategic  management plans. While the Office of the Secretary of Defense (OSD)  required all the services to prepare and submit such plans to them, we  decided to focus our work on the Army’s and Marine Corps’ plans because  of their significant roles in supporting overseas contingency operations in  Iraq and Afghanistan. We also determined if the Army’s and Marine Corps’  strategic plans for depot maintenance fully addressed the criteria for  developing a strategic plan specified in the Department of Defense (DOD)  March 2007 Depot Maintenance Strategy and Implementation Plans.  Furthermore, we determined if the Office of the Under Secretary of  Defense for Logistics and Materiel Readiness assessed the services’ depot  management strategic plans and provided follow on actions to ensure the  plans meet their criteria. In addition, we reviewed and addressed issues  regarding uncertainties in projecting future workloads, which is necessary  for effective depot planning. We also interviewed depot management  officials to determine the depots’ participation in the sustainment portion  of the life cycle management planning process to effectively plan and  prepare for future maintenance work and related capabilities.
To gain further perspective on the services’ efforts to plan for the future of  the depot maintenance facilities, we interviewed and obtained  documentation from officials at Headquarters, Department of the Army,  Washington, D.C.; U.S. Army Materiel Command, Fort Belvoir, Virginia;  Headquarters Marine Corps, Arlington, Virginia; Marine Corps Systems  Command, Quantico, Virginia; and Marine Corps Logistics Command,  Albany, Georgia. We also visited, interviewed, and obtained  documentation from officials at the Army’s five maintenance depots that  perform organic level maintenance at Anniston Army Depot, Anniston,  Alabama; Corpus Christi Army Depot, Corpus Christi, Texas; Letterkenny  Army Depot, Chambersburg, Pennsylvania; Red River Army Depot,  Texarkana, Texas; and Tobyhanna Army Depot, Tobyhanna, Pennsylvania.  In addition, we visited, interviewed depot officials and obtained  documentation from the Marine Corps’ two maintenance depots that  perform organic level maintenance at Maintenance Center Albany, Georgia  and Maintenance Center Barstow, California. Furthermore, we obtained  data and information on actions aimed at improving depot productivity at  the Army and Marine Corps depots and data on the depots’ workforce  trends from fiscal year 1999 through fiscal year 2008. We determined that  the data used were sufficiently reliable for our purposes. We conducted  this performance audit from August 2007 through September 2009 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Army and Marine Corps Depot Actions to Improve Productivity
paragraphs: Both the Army and Marine Corps depots have reported actions they have  taken to improve their productivity. The depots have reported that they  have improved their maintenance operations’ productivity and efficiency  through the use of several process improvements including Lean, Six  Sigma, Value Stream Mapping, and Theory of Constraints. They report that  such improvements have allowed them to identify and reduce or eliminate  unnecessary work-related functions and other impediments that created  restrictions or “bottlenecks” in their production processes and have  resulted in increases in the number of weapon systems or other  components processed, reductions in repair cycle times, and reductions  in the cost of production. The Army and Marine Corps have issued a  policy and a guidebook, respectively, aimed at improving the depots’  repair processes, including information on assessing the depots’ progress  in making, sharing, and sustaining improvements and in measuring overall  productivity. We questioned depot officials about the data associated with  these improvements and relied on their professional judgment concerning  the adequacy and reliability of the data.
Table 4 shows information reported by the Army depots on the results of  initiatives to improve the repair process for selected weapon systems— one from each of the five Army depots. The Army depots generally assess  the results of their productivity improvements based on increases in the  number of units produced, reductions in repair cycle times, and reductions  in production costs. The third column shows the period during fiscal years  2004 through 2007 in which the initiative was implemented. The fourth  column shows the average reduction in repair cycle time expressed in  days, and the fifth column shows this reduction expressed as a percentage  by which repair time was reduced. The final column shows the estimated  cost reduction or savings that the Army depots reported for the period.  Army depot officials told us that there is limited sharing of lessons learned  or cross application among the depots and that increased sharing and  cross application could contribute to additional reductions in repair days  and cost savings or cost avoidances.
Table 5 shows information reported by the Marine Corps depots on the  results of initiatives to improve the repair process for selected weapons  systems repaired at its two depots for fiscal years 2004 through 2007. The  Marine Corps depots generally assess the results of their productivity  improvements based on reductions in repair cycle times. The second  column shows the average number of days taken for the repair cycle in  fiscal year 2004, the baseline year before the depots initiated their process  improvement initiatives. The third column shows the average number  days the depots reported for repair cycle time in fiscal year 2007, after  implementing process improvement initiatives. The fourth and fifth  columns show the reported reduction in repair time expressed as number  of days and the percentage by which repair time was reduced. The Marine  Corps depots generally do not either capture or report cost savings or cost  avoidances resulting from such improvements. A Marine Corps official  responsible for managing the results of the depots’ improvement told us  that some of the reductions in repair days were achieved by using  overtime and multiple shifts. The official also told us that there is limited  sharing of lessons learned or cross application among the depots and that  increased sharing and cross application could contribute to additional  reductions in repair days and in cost savings or cost avoidances.
section_title: Appendix III: Trends in Army and Marine Corps Depot Workforce Levels
paragraphs: Workforce levels for the Army and Marine Corps depots have been  increasing along with the workloads since fiscal year 2003. The depots  have accommodated the surge in workload by hiring primarily temporary  and contract employees. Depot officials told us they hired temporary and  contract workers in lieu of permanent government workers due to  uncertainties about the duration of the overseas contingency operations in  Iraq and Afghanistan. The depots plan to reduce temporary and contract  labor as workload related contingency operations decreases. Although  uncertainties about future workload inhibit their workforce planning, we  found that the depots’ workforce strategic planning addresses anticipated  personnel and skill gaps. For example, while the workloads have  increased, the depots have been able to maintain a skilled workforce. In  addition, with a large percentage of depot workers becoming eligible to  retire over the next 5 years, some of the depots are working with local  community colleges to provide specialized programs focused on skills  needed by the depots.
The Army and Marine Corps depots’ workforce was relatively stable from  fiscal year 1999 though fiscal year 2002. The depots report that the  increase in workload associated with the Global War on Terrorism  (GWOT) began during fiscal year 2003. Before GWOT, the total depot  workforce was more than 89 percent permanent government employees,  but at the end of fiscal year 2008 permanent government employees made  up only 62 percent of the total depot workforce. After remaining relatively  constant from fiscal year 1999 through fiscal year 2002, total workforce  increased from fiscal year 2003 through fiscal year 2008, along with the  increases in workload associated with GWOT. From fiscal year 2003  through fiscal year 2008, the Army depots’ workforce increased by 106  percent and the Marine Corps’ by 99 percent. Figures 1 and 2 illustrate  these changes in the Army’s and the Marine Corps’ depots’ workforces  from fiscal year 1999 through fiscal year 2008.
The trends reflected in figures 1 and 2 show marked changes in the  composition of the Army’s and Marine Corps’ depots’ workforces since  fiscal year 2003. The largest increases have been in the number of  temporary workers and contract labor hired in lieu of permanent staff. As  GWOT continued and the workload continued to increase, the depots  continued to hire more temporary and contract workers to accommodate  the increased workload. The depots plan to reduce the number of  temporary and contract workers as they employ GWOT-related workload  decreases.
As figures 1 and 2 illustrate, in fiscal year 2008, 37 percent of the Army  depots’ workforce and 48 percent of the Marine Corps depots’ workforce  were comprised of temporary and contract workers. Specifically,  temporary workers represented about 15 percent of the Army depots’  workforce and 25 percent of the Marine Corps depots’ workforce.
Contract workers represented about 22 percent of the Army depots’  workforce and about 23 percent of the Marine Corps depots’ workforce.
We have previously reported that the depots may face challenges that  could inhibit effective strategic workforce planning. These challenges  include the high average age of workers, difficulty in maintaining depot  viability if large numbers of eligible skilled workers retire, and lack of an  available source of trained and skilled personnel. The Army and Marine  Corps depots’ have reduced the average age of their permanent workers.  For fiscal year 2008, the age of permanent workers in the Army’s depots  averaged 45, and the age of permanent workers in the Marine Corps’ depot  averaged 46. Since fiscal year 1999, the average age of the Army’s  permanent depot workers has decreased by 9 percent, while that of the  Marine Corps’ has decreased by 12 percent. Depot officials attributed this  reduction to the retirement of older permanent workers; the availability of  younger, qualified applicants; and in-house training programs.
The depots have developed workforce strategic plans that address current  and anticipated personnel and skill gaps. These plans include maintaining  a mix of personnel with the skills and capabilities needed to satisfy  current workload requirements. According to Army and Marine Corps  depot officials, permanent, skilled workers are readily available. Further,  the depots forecast a high rate of retirement eligibility in the next 5 years,  and they are taking steps to address the potential loss of skilled personnel.  According to Army data, 34 percent of the Army’s permanent depot  workforce will be eligible for retirement in fiscal year 2013. According to  Marine Corps data, 43 percent of the Marine Corps’ permanent depot  workforce will also be eligible for retirement in fiscal year 2013. Both  services’ depots track and monitor personnel who may be eligible to retire  soon, considering their skills in order to address potential skill gaps in the  future workforce. Both Army and Marine Corps depots address this  potential loss of personnel and skills in their workforce strategic plans,  and they have instituted various types of recruitment and training  programs designed to attract and train workers.
section_title: Appendix IV: Comments from the Department of Defense
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Julia Denman and Tom Gosling,  Assistant Directors; Larry Bridges; John Clary; Joanne Landesman;  Latrealle Lee; Katherine Lenane; and Christopher Watson made key  contributions to this report.