Defense Management: DOD Has a Rigorous Process to Select Corrosion Prevention Projects, but Would Benefit from Clearer Guidance and Validation of Returns on Investment
Published: 2010-12-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Corrosion costs DOD over $23 billion annually, affects both equipment and facilities, and threatens personnel safety. DOD has taken steps to improve its corrosion prevention and control (CPC) efforts. These efforts include reorganizing the DOD-wide Corrosion Office and instituting Corrosion Executive positions in each of the military departments. In response to the Senate Appropriations Committee Report accompanying the fiscal year 2010 DOD appropriations bill, GAO evaluated to what extent (1) the Corrosion Executives are involved in preparing CPC project proposals for submission, (2) the Corrosion Office has created a process to review and select projects for funding, and (3) the military departments have validated the return on investment (ROI) for funded projects. GAO also reviewed the process the Corrosion Office uses to determine the CPC activities that it will fund. To carry out this study, GAO observed project selection panel meetings, interviewed corrosion officials, and reviewed documents and project proposals.
section_title: What GAO Found
paragraphs: The acceptance of the military departments' CPC proposals varied relative to the types of projects and nature of review that the military Corrosion Executives required before the proposals were submitted to the Corrosion Office for funding consideration. DOD guidance provides that Corrosion Executives coordinate CPC actions, including submitting corrosion project opportunities. Prior to submitting the proposals for a preliminary evaluation by the Corrosion Office's project selection panel, Army and Navy Corrosion Executives and staffs reviewed proposal summaries and provided feedback to the authors. The Air Force did not perform a review that included pre-submission feedback. Later, during a preliminary evaluation, the Corrosion Office's project selection panel determined that a much higher percentage of Army and Navy proposals were acceptable than those submitted by the Air Force. A selection panel member told us that because the Air Force did not perform a pre-submission review of proposals, deficiencies in those proposals were not corrected prior to the panel's evaluation. DOD has criteria and a rigorous multistep procedure for evaluating proposals, but some military department stakeholders indicated that this information is not communicated clearly. Previously, GAO noted involving stakeholders helps agencies target resources to the highest priorities. Criteria used for the project selection panel to evaluate proposed projects are not clearly identified in DOD's Corrosion Prevention and Mitigation Strategic Plan, and some project managers said that they were unfamiliar with how projects were evaluated. While the Corrosion Office already takes actions, such as providing in-depth feedback to proposals' authors and assembling corrosion experts to participate on the selection panel, unclear communications on some issues could adversely affect authors' abilities to prepare effective project proposals. The military departments are late in validating ROIs for some completed projects. The Strategic Plan suggests that follow-on reviews with validated ROIs are required for completed projects within 3 years after full project implementation. Project managers have completed these reviews for 10 of the 28 implemented projects funded in fiscal year 2005, with 8 of the 10 completed reviews performed by one Army command. Corrosion Executives told GAO that because CPC funding is awarded only for the 2-year project implementation period, they typically do not have funds remaining for validating ROIs after projects are completed. If the ROI validations of completed projects are not performed, the Corrosion Office will not have needed data to adjust project selection criteria in order to invest limited CPC funds in the types of projects with the greatest potential benefits. The Corrosion Office created Product Teams to implement DOD-wide CPC activities in seven areas. Using volunteers and a budget averaging around $4.5 million per year, the Teams propose activities, such as determining the costs of corrosion and DOD-wide specifications for CPC products, which are then selected for funding by the Director of the Corrosion Office. The Corrosion Executives are becoming more involved in Team activities.
section_title: What GAO Recommends
paragraphs: GAO is making recommendations to: 1) improve the oversight of proposals submitted for funding consideration, 2) communicate more clearly the criteria used to select which projects will be funded, and 3) fund and complete ROI validations. In written comments on this report, DOD disagreed with the first two recommendations and agreed with the third, citing alternatives or differing views. GAO believes the recommendations remain valid.

section_title: Letter
paragraphs: In 2010, the Department of Defense (DOD) estimated that corrosion costs  the department over $23 billion annually. Moreover, the Defense Science  Board Task Force estimated in a 2004 report that 30 percent of corrosion  costs could be avoided through proper investment in prevention and  mitigation of corrosion during design, manufacture, and sustainment.  Corrosion negatively affects all military assets, including both equipment  and infrastructure, and is defined as the unintended destruction or  deterioration of a material due to its interaction with the environment.  Corrosion also affects military readiness, taking critical systems out of  action and creating safety hazards. For example, an October 2009 study  estimated that corrosion is responsible for up to 16 percent of the  unavailability of the equipment reviewed in the study. Also, our April 2007  report noted that the Army attributed over 50 aircraft accidents and 12  fatalities to corrosion since 1985. According to DOD, increased  prevention and control efforts are needed to adequately address the wide- ranging and expensive effects of corrosion on equipment and  infrastructure.
Congress has enacted several legislative requirements to address the high  cost of corrosion’s negative effects on military equipment and  infrastructure. To fulfill these requirements, DOD created the Office of  Corrosion Policy and Oversight (Corrosion Office) in 2003. The Corrosion  Office is responsible for the prevention and mitigation of corrosion of  military equipment and infrastructure. The National Defense  Authorization Act for Fiscal Year 2008, which amended 10 U.S.C. § 2228,  specified organizational changes to the Corrosion Office and added new  reporting requirements. These changes included assigning the former  duties of the DOD-wide Corrosion Executive to the newly established  position of Director of the Corrosion Office and mandating that the  incumbent report directly to the Under Secretary of Defense for  Acquisition, Technology and Logistics. Additionally, the Act required DOD  to annually report on corrosion funding to Congress. The Duncan Hunter  National Defense Authorization Act for Fiscal Year 2009 required each  military department to designate a Corrosion Control and Prevention  Executive (Corrosion Executive) to be the senior official in the  department with responsibility for coordinating corrosion prevention and  control (CPC) program activities, and also required each Corrosion  Executive to submit an annual report of recommendations regarding CPC  actions and funding levels to the Secretary of Defense.
We conducted this work in response to the Senate Appropriations  Committee Report accompanying the fiscal year 2010 DOD appropriations  bill. In the Report the Committee directed us to review selected CPC  projects and activities, identify the methodology and processes the  military services use to forward candidate projects for funding  consideration, and determine why the military services’ entire estimated  requirements are not reflected in the overall DOD funding requirement. In  April 2010, we provided observations on the process that DOD and the  military departments use to estimate funding requirements for CPC  projects and activities, and the reasons why DOD’s funding requirement  did not reflect the estimated requirements identified by the military  departments. This report discusses our evaluation of the extent  the Corrosion Executives are involved in preparing CPC project  proposals for submission,  the Corrosion Office has created a process to review and select  projects for funding, and  the military departments have validated the return on investment  (ROI) for funded projects.
We also discuss the process used by the Corrosion Office to determine the  CPC activities that it will fund.
In performing our work we used data on projects that the military  departments submitted to the Corrosion Office for funding consideration  in fiscal years 2005 through 2010. We assessed the reliability of the data by  interviewing staff knowledgeable about the data and the system that  produces them and by testing for missing data, outliers, or obvious errors.  We determined the data were sufficiently reliable for the purposes of  determining how the military departments decide which projects to submit  to the Corrosion Office for funding consideration and how the Corrosion  Office decides which projects to approve for funding. To enhance our  understanding of the review and decision-making processes, we selected  and reviewed a nonprobability sample of 24 project proposals and related  information that the military departments submitted in fiscal years 2006,  2008, or 2010. To select this sample, we used the following four  considerations  the year the project was submitted to the Corrosion Office,    whether the project was accepted or not accepted by the Corrosion  Office,  the Corrosion Office’s and military department’s combined project  cost, and  the estimated return on investment (ROI) of the project.
As part of these project reviews, we interviewed six officials who were the  principal authors and points of contact for 11 of the projects in our  sample. We additionally met with each Corrosion Executive to discuss the  steps they and their staffs took to oversee CPC efforts for their respective  military department. We met with officials at the Corrosion Office to  discuss the CPC project selection process and also observed two meetings  of the CPC project selection panel as part of the fiscal year 2011 project  selection process. We observed meetings where the panel provided  feedback to military department representatives regarding the panel’s  observations on the project proposals submitted for fiscal year 2011  funding consideration. To determine how the military departments  validate the ROIs for funded projects, we met with the Corrosion  Executives and their staffs, as well as the principal points of contact for 11  of the projects we reviewed. We also obtained the final reports for CPC  projects funded in fiscal year 2005 from the Corrosion Office and reviewed  these reports to obtain data on estimated and validated ROIs for these  projects. We met with representatives from three of the seven CPC  Working Integrated Product Teams to understand how CPC activities are  formulated, funded, and implemented. Further details on our scope and  methodology are included in appendix I.
We conducted this performance audit from April 2010 through December  2010, 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.
subsections: section_title: Background
paragraphs: Corrosion, if left unchecked, can degrade the readiness and safety of  equipment and has been estimated to cost DOD billions of dollars  annually. Using fiscal year 2006 data, DOD noted that it spends  approximately $80 billion each year to maintain its ships, aircraft, strategic  missiles, and ground combat and tactical vehicles. Corrosion-related costs  of equipment maintenance were estimated to total $19.4 billion each year,  or 24 percent of the total cost of maintenance. In addition, DOD spends  approximately $10 billion to maintain about 577,000 buildings and  structures at more than 5,300 sites worldwide. Approximately $1.9 billion,  or 11.7 percent, of these maintenance costs were estimated to be related to  corrosion.
The Director of the Corrosion Office is responsible for the prevention and  mitigation of corrosion of DOD equipment and infrastructure. The  Director’s duties include developing and recommending policy guidance  on the prevention and mitigation of corrosion to be issued by the  Secretary of Defense, reviewing the CPC programs and funding levels  proposed by the Secretary of each military department during the annual  internal DOD budget review process, and submitting recommendations to  the Secretary of Defense regarding those programs and proposed funding  levels. In practice, this review includes the process of selecting projects  proposed by the military departments for funding. In addition, the Director  leads the CPC Integrated Product Team, which is comprised of  representatives from the military departments to accomplish the goals and  objectives of the Corrosion Office, and includes the seven Working  Integrated Product Teams (Product Teams) that implement CPC activities.  These seven Product Teams are: policy and requirements; metrics, impact,  and sustainment; specifications, standards, and product qualification;  training and certification; communications and outreach; science and  technology; and facilities. Until fiscal year 2011, the Corrosion Office  consisted of the Director and contractor support. The Director told us that  4 full-time staff were expected to be hired in early fiscal year 2011.
The Corrosion Office funds projects and activities aimed at preventing and  mitigating corrosion. Projects are specific CPC efforts with the objective  of developing and testing new technologies. To receive Corrosion Office  funding, the military departments submit project proposals that are  evaluated by a panel of experts assembled by the Director of the  Corrosion Office. The Corrosion Office currently funds up to $500,000 per  project, and the military departments pledge complementary funding for  each project they propose. The level of military department funding and  the estimated ROI are two of the criteria used to evaluate the project  proposals. (See app. II for examples of CPC projects.) Activities  encompass efforts, such as training and cost studies, to enhance and  institutionalize CPC efforts within DOD. These activities are coordinated  through the seven Product Teams discussed above. Product Team  representatives told us that funding for these activities is centrally  coordinated through the Corrosion Office in consultation with the Product  Teams.
According to the Corrosion Office, constrained budgets and competing  requirements to support worldwide military operations have precluded the  full funding of CPC projects that have met the requirements for funding. In  April 2010, we reported on the funding available to the Corrosion Office  for projects and activities. For fiscal years 2005 through 2010, the  Corrosion Office accepted 271 CPC projects with funding requests totaling  $206 million, but DOD provided $129 million, or 63 percent of the funding  required for the Corrosion Office to fund all 271 projects. As a result, the  Corrosion Office funded 169 CPC projects over this 6 year period. As  represented in Figure 1, the historical funding rates for CPC projects have  fluctuated during fiscal years 2005 through 2010. During the same 6 year  period, the Corrosion Office also funded a total of $26 million in corrosion- related activities such as training, outreach, and costs of corrosion studies.
In April 2010, we reported that the CPC requirements for fiscal year 2011  totaled $47 million, but the fiscal year 2011 budget identified $12 million  for CPC, leaving an unfunded requirement of about $35 million.  Additionally, we reported that the funding level identified in the fiscal year  2011 budget request could result in a potential cost avoidance of $418  million. Similarly, multiplying the average estimated ROI by the amount of  the unfunded requirements shows that DOD may be missing an  opportunity for additional cost avoidance totaling $1.4 billion by not  funding all of its estimated CPC requirements. Both calculations are highly  contingent on the accuracy of the estimated ROIs that have not been  validated by the military departments. (See the Related GAO Products  section at the end of this report for a full listing of our reports on DOD’s  CPC program.)
section_title: Acceptance of Project Proposal Submissions to the Corrosion Office Often Varies by the Nature of Corrosion Executives’ Oversight and Review and Type of Project Proposed
paragraphs: The acceptance of military departments’ CPC project proposals varied  relative to the nature of review—if any—that the Corrosion Executives  required before proposals were submitted to the Corrosion Office for  funding consideration. The military departments have established  Corrosion Executives to oversee CPC efforts, but their level of oversight  varies. The Duncan Hunter National Defense Authorization Act for Fiscal  Year 2009 requires the Corrosion Executive of each military department to  serve as the principal point of contact between the military department  and the Director of the Corrosion Office. It also requires each Corrosion  Executive to submit an annual report to the Secretary of Defense  containing recommendations pertaining to the military department’s CPC  program, including corrosion-related funding levels necessary to carry out  all the Corrosion Executive’s duties. In addition, DOD Instruction 5000.67,  Prevention and Mitigation of Corrosion on DOD Military Equipment  and Infrastructure, which was updated in February 2010, reflects certain  legislative requirements and provides Corrosion Executives with  responsibility for certain CPC activities in their military department. It  requires the Corrosion Executives to submit CPC project proposals to the  Corrosion Office with coordination through the proper military  department chain of command, as well as to develop and support an  effective CPC program in their military department, evaluate the CPC  program’s effectiveness, serve as the principal point of contact with the  Corrosion Office, and establish a process to review and evaluate the  adequacy of CPC planning.
We have reported that a key factor in helping achieve an organization’s  mission and program results and minimize operational problems is to  implement appropriate internal control. Effective internal control also  helps in managing change to cope with shifting environments and evolving  demands and priorities. Control activities such as the policies, procedures,  techniques, and mechanisms that enforce management’s directives, are an  integral part of an entity’s planning, implementing, reviewing, and  accountability for stewardship of government resources and achieving  effective results. For an entity to run and control its operations, it must  also have relevant, reliable, and timely communications relating to internal  as well as external events.
During the annual process of identifying and submitting CPC project  proposals for funding consideration, each Corrosion Executive exercises a  different level of review prior to submission of the proposals to the  Corrosion Office. For example, the Army and Navy Corrosion Executives  organized and directed a review of their department’s project proposals  prior to submitting them to the Corrosion Office for fiscal year 2011 CPC  funding, but the Air Force Corrosion Executive’s preliminary oversight  was more limited.
The Army Corrosion Executive requested the various Army commands to  submit abbreviated project proposals 5 weeks prior to the application  deadline set by the Corrosion Office. Individuals nominated by the Army  commands then reviewed these abbreviated proposals by using criteria the  Army adapted from the project selection evaluation charts included in  DOD’s Corrosion Prevention and Mitigation Strategic Plan. The  Corrosion Executive’s office provided the results from this internal peer  review to the authors of the proposed projects, so that comments obtained  from the review could be incorporated into the project proposals before  the Corrosion Executive submitted the projects to the Corrosion Office.  Army staff told us that some authors withdrew their project proposals  following this review, based on the feedback they received.
The Navy Corrosion Executive directed a similar review process, requiring  that a one-page synopsis of each project proposal be prepared and  submitted to him 7 weeks prior to the Corrosion Office deadline. The  Corrosion Executive assembled a panel with members from each of the  Navy’s system commands to review the synopses. Specifically, individuals  from other system commands reviewed and scored the synopses from the  remaining commands based on the synopses’ alignment with the Navy’s  priorities, and the estimated ROI. The Navy Corrosion Executive then  ranked the synopses based on the aggregate scores received from each  reviewer. A Navy project manager told us that receiving a low ranking did  not preclude project proposals from being submitted to the Corrosion  Office, because the Navy Corrosion Executive did not discourage the  managers of these projects from submitting the full proposal to the  Corrosion Office for funding consideration.
We found that the Air Force Corrosion Executive did not direct a similar  level of review and feedback for project proposals before they were  submitted to the Corrosion Office for fiscal year 2011 funding. The Air  Force Corrosion Executive requested that the Air Force major commands  submit project proposals to his office prior to submitting project proposals  to the Corrosion Office. However, the Air Force Corrosion Executive did  not establish a process to review the proposals and provide preliminary  feedback for revising them before submission to the Corrosion Office. The  Air Force Corrosion Executive told us that he did not conduct a review of  the proposals because, due to the historically low rate of Air Force CPC  projects accepted for funding, he thought it was appropriate to submit all  of the Air Force proposals to the Corrosion Office. He also said that since  the Corrosion Office is more familiar with the criteria used to judge the  proposals he did not want to reject any project proposals.
According to a member of the Corrosion Office’s project selection panel,  the additional steps taken by Army and Navy Corrosion Executives to  ensure that their military department’s proposals met the panel’s criteria  were contributing factors for a higher acceptance rate for Army and Navy  proposals. The project selection panel found during the preliminary  evaluation step of the proposal selection process that 66 percent of the  Army project proposals and 61 percent of the Navy project proposals  submitted for fiscal year 2011 funding were acceptable in their current  form, while 11 percent of the Air Force projects were considered  acceptable (see table 1).
The panel member also told us that the Army and Navy fiscal year 2011  proposals were more complete and more effectively addressed the  selection criteria than those submitted by the Air Force. For example,  most of the Air Force project proposals lacked required information  needed for the project selection panel to judge the merits of the proposal.  The panel’s feedback to the authors of the Air Force project proposals  highlighted areas where the provided information was insufficient or  incomplete, such as  the project managers did not follow the project proposal template in  the DOD Corrosion Prevention and Mitigation Strategic Plan, which  includes topics to be addressed in project proposals;  the contents of the project proposals did not explain the technology  demonstration aspects of the project; or  the project proposals did not include information on matching funds  that would be provided by the Air Force.
The project selection panel also concluded that most of the Air Force’s  fiscal year 2011 project proposals were requests for replacement funds,  rather than the technology demonstrations that the Corrosion Office’s CPC  program is intended to support. Selection panel members questioned if a  review had occurred by the Air Force Corrosion Executive because these  deficiencies were not identified and corrected prior to submitting the  project proposals to the Corrosion Office for funding consideration.
section_title: The Corrosion Office Has a Rigorous Process to Evaluate CPC Proposals for Funding, but Selection Criteria Are Not Clearly Communicated
paragraphs: For fiscal year 2011, the Corrosion Office used a rigorous multistep  process to review and select CPC project proposals that were acceptable  for funding; however, some military department personnel involved in the  process did not clearly understand the criteria used to select projects for  funding. A project selection panel reviewed submitted project proposals  from each military department at two different times. For the preliminary  review, the panel used a set of criteria that is different from those used for  final project selection later in the process. For the final review, the panel  used criteria that are found in the DOD Corrosion Prevention and  Mitigation Strategic Plan but not explicitly identified as the specific  criteria used to evaluate CPC projects. Corrosion Executives and several  authors of the project proposals told us they were not clear on what the  criteria were or when they were used.
subsections: section_title: The Corrosion Office Used a Rigorous Multistep Process to Select Projects for Funding
paragraphs: For the fiscal year 2011 project review and selection, we observed that the  Corrosion Office used a rigorous multistep process to determine if  proposed projects were acceptable for funding.
Step 1: In mid-June 2010, the military departments submitted 81 CPC  project proposals to the Corrosion Office, as shown in table 1 above.  At this point, Corrosion Office support staff assembled the project  plans into binders for review by the project selection panel convened  by the Director of the Corrosion Office. The fiscal year 2011 panel had  five members: the Director, Corrosion Office (chair); Associate  Director, Materials and Structures, Office of the Director, Defense  Research & Engineering (vice-chair); and an official from each of the  following organizations within the Office of the Under Secretary of  Defense (Acquisition, Technology and Logistics): Defense Acquisition  University; Installations and Environment; and Logistics and Materiel  Readiness, Maintenance Policy and Programs.
Step 2: In mid-July 2010, 2 weeks after project information was  provided to the panel, the panel members assembled for their  preliminary evaluation of the proposals. This preliminary evaluation,  which we observed, was conducted at a meeting immediately prior to  the annual DOD Corrosion Forum and resulted in projects being  designated as either a “go” (meaning that the projects are deemed  acceptable in their current form) or a “no go” (meaning that the  projects require additional information or changes in scope to be  acceptable to the panel). We observed that the panel used criteria for  this preliminary evaluation that are not made available to the  submitters of project proposals and are different from those used for  final project selection later in the process.
Step 3: Following the preliminary evaluation and during the Corrosion  Forum, the panel held individual feedback sessions with project  managers from the military commands, such as Naval Air Systems  Command, Army Aviation and Missile Command, and Air Force Civil  Engineer Support Agency, so feedback could be done in person. The  panel provided feedback on each project, regardless of whether it was  designated as a “go” or “no go.” A panel member told us that the panel  provided feedback on all projects so that project managers could  address—if they choose to do so—any perceived weaknesses in their  “go” projects and improve their ranking in the final evaluation, as well  as revise the “no go” project submissions. Following the feedback, the  project managers had three options: prepare and submit information  addressing the feedback provided by the panel, re-submit project  proposals in their original form, or remove projects from consideration  for that year’s funding process. Project managers told us that they  sometimes decide to remove their “no-go” projects from consideration  and that the military departments may implement such projects using  other funding. A project selection panel member told us that if a  project manager decided to modify a project proposal to address the  panel’s feedback, this modified proposal was due to the Corrosion  Office no later than 2 weeks after the feedback session. Upon receipt  of any revised proposals, the panel conducted another review of all  proposals (original and resubmitted), which involved each panel  member independently scoring the projects on judgmental criteria and  providing written comments.
Step 4: In mid-August 2010, Corrosion Office support staff used an  analytical tool to rank the projects based on the average of the scores  recorded by each panel member for eight criteria: the five judgmental  criteria above and three quantitative criteria—ROI, Corrosion Office  funding as a percentage of total project cost, and the project  performance, or implementation, period.
Step 5: Following the ranking of projects using the analytical tool, the  selection panel reconvened for a final evaluation of the projects. The  panel arranged the ranked list that resulted from the analytical tool  described above into four categories: best, acceptable–prioritized for  funding, acceptable–not prioritized, and not acceptable. According to  the staff, the “best” projects would likely all be funded, the  “acceptable–prioritized for funding” projects would be funded by  priority until the Corrosion Office funding is exhausted. Corrosion  Office support staff informed the panel that, based on historical  funding levels, they anticipated having $7 million in available funding  for CPC projects in fiscal year 2011. The panel identified 30 of the 53  accepted projects that it anticipated would be funded following  completion of DOD’s fiscal year 2011 budget process. These 30  projects included the 20 projects categorized as “best” and 10 projects  in the “acceptable–prioritized for funding” category. We observed that  the panel then reviewed the projects that were within the anticipated  funding level to ensure a balance between the number of facilities and  weapons projects identified for funding. In the meeting we observed,  no adjustments to the final ranking were necessary to ensure this  balance.
section_title: Criteria Used for Project Selection Are Not Clearly Communicated
paragraphs: Corrosion Office officials told us that projects are evaluated based on the  eight criteria that they believed were clearly listed in the DOD Corrosion  Prevention and Mitigation Strategic Plan (and discussed above), yet  some project managers told us they were unaware of these criteria. We  have previously reported that a key business practice for performance  management is the early and direct involvement of stakeholders.  We  have also reported that leading results-oriented organizations believe  strategic planning is not a static or occasional event but rather a dynamic  and inclusive process. For example, we noted that stakeholder  involvement is important to help agencies ensure that their efforts and  resources are targeted at the highest priorities.
We found that some military department stakeholders—including the  Corrosion Executives and project managers who submit project  proposals—had limited familiarity with the criteria to evaluate projects for  CPC funding. As described above, the selection panel used a different set  of criteria to make the preliminary “go/no-go” decision than the set used  for the final evaluation and decision. Corrosion Office officials told us that  they believed these criteria were clearly listed in the DOD Corrosion  Prevention and Mitigation Strategic Plan, but we found that only some of  the criteria used to evaluate CPC project proposals were clearly found in  the Strategic Plan. Further, the criteria identified by the Corrosion Office  officials were grouped in the Strategic Plan with other criteria not used  for the project selection process. Two of the six project managers with  whom we met told us that they were unfamiliar with the criteria used to  assess CPC projects. The other four project managers said that they  became familiar with the criteria by attending the DOD Corrosion Forums,  discussing projects with the panel during previous years’ feedback  sessions, or learning about the criteria from other project managers—not  by reading the DOD Corrosion Prevention and Mitigation Strategic Plan.  Some project managers told us that project managers who are new to the  process of applying for CPC funding would have difficulty understanding  the criteria sufficiently to prepare a successful project proposal. Also, the  Corrosion Executives told us that they were unfamiliar with the criteria  used by the project selection panel to prioritize projects for funding. For  example, the Air Force Corrosion Executive told us that he did not review  CPC projects prior to submitting them to the Corrosion Office for funding  consideration because he was not sufficiently familiar with the criteria  used by the Corrosion Office to select projects.
During our observations of the project selection panel process, we  identified several conditions that show communication between the  Corrosion Office and the military department stakeholders is not as clear  as it could be.
Criteria used for project selection are not clearly identified in the  Corrosion Prevention and Mitigation Strategic Plan. The Strategic  Plan includes an attachment with seven project assessment charts that  the Strategic Plan states are “not to be filled out and submitted” with  the project proposal and “will not be used to score projects, although  they may be used as a guide” for the preliminary and final project  evaluations. However, we observed the project selection panel using  one of the topics described in the assessment charts (ROI) to make  project acceptance decisions.
Further, it appeared that certain criteria were more important for  project acceptance than others, even though this difference in  importance was not identified in the Strategic Plan. For example,  during the project selection meetings we observed, the proposed  projects’ estimated ROI appeared to be a very important criterion in  the panel’s decision-making process. Also, we observed that the ratio  of funding requested from the Corrosion Office to that provided by the  military department was often cited by the project selection panel as a  reason for scoring a project higher or lower, even though the Strategic  Plan does not explicitly mention this criterion.
The panel also assessed some projects using criteria that were not  listed in the Corrosion Prevention and Mitigation Strategic Plan.  Specifically, the extent to which past projects had used similar  technology and the extent to which a proposed project’s location  previously experienced difficulties with project implementation both  factored in part into the selection panel’s decisions about whether to  accept projects for funding, even though these criteria are not listed in  the Strategic Plan.
The project selection process did not incorporate the priorities of the  military departments, even though the Navy provided this information  to the panel for the fiscal year 2011 selection process. Corrosion  Executives and project managers told us they believed that it was  appropriate for the project selection panel to consider the priorities of  the military departments, as each department was required to provide  matching funds for proposed projects. However, a selection panel  member and Corrosion Office officials told us that they disagreed with  this view, and added that the CPC program was intended as a  technology demonstration program with the goal of awarding funds to  the most competitive projects, regardless of department priorities.
The military department stakeholders’ limited knowledge and  understanding of the selection criteria could be a challenge for the  Corrosion Office in accomplishing the stated purpose of the Strategic Plan  to articulate policies, strategies, objectives, and plans that will ensure an  effective, standardized, affordable DOD-wide approach to prevent, detect,  and treat corrosion and its effects on military equipment and  infrastructure. This situation makes it difficult for stakeholders to craft  effective project proposals because they are unsure about the criteria that  the project selection panel uses to make decisions on which projects to  accept for funding.
section_title: The Military Departments Have Not Determined the Benefits of About Two Thirds of the Completed Corrosion Projects
paragraphs: The military departments have completed a third of their required ROI  validations for projects funded in fiscal year 2005, but completion of the  remaining projects’ validations for that year is behind schedule. Guidance  in the DOD Corrosion Prevention and Mitigation Strategic Plan  describes the steps to be taken to initially estimate the ROIs for CPC  projects submitted for funding by the Corrosion Office. These estimation  steps include (1) calculating the project costs—such as up-front  investment costs and operating and support costs, (2) calculating the  benefits that are expected to result from the project—such as reduction of  costs like maintenance hours and inventory costs, and (3) calculating the  net present value of the annual costs and benefits over the projected  service life of the proposed technology.
The DOD Corrosion Prevention and Mitigation Strategic Plan notes that  follow-on reviews of completed projects are required and that the reviews  are to focus on validating the project’s ROI. Corrosion Office officials told  us that because the CPC projects are generally funded for 2 years of  implementation and ROI validations are required within 3 years of  completing the project’s implementation, reviews for projects funded in  fiscal year 2005 are due by the end of fiscal year 2010. The ROI  validations consist of  reviewing assumptions used earlier in computing the estimated ROI;    updating the costs and benefits associated with the new technology  resulting from the project;  recalculating the ROI based on validated data; and    providing an assessment of the difference, if any, between the  estimated ROI and the validated ROI.
The military departments have completed these reviews, including the ROI  validations, for 10 (36 percent) of the 28 implemented projects funded in  fiscal year 2005. For these 10 projects, the average ROI ratio was validated  as 12:1, slightly higher than the average estimated ROI of 11:1 for these  projects when they were originally proposed. While the agreement  between the average estimated and validated ROIs is encouraging, the  small number of projects—overall and by type of project—does not allow  these findings to be generalized.
Nine of these ten CPC projects with validated ROIs were focused on  corrosion in facilities, and facilities projects accepted by the Corrosion  Office for funding have historically had lower estimated ROIs than CPC  equipment projects. Specifically, for CPC projects funded in fiscal year  2005, the facilities projects had an estimated average ROI of 13:1, while the  equipment projects had an estimated average ROI of 67:1. Figure 2 shows  the estimated average ROIs for projects funded in fiscal years 2005  through 2010.
Both Corrosion Office and military department officials conceded that  they are behind schedule on completing ROI validations for fiscal year  2005 projects. Army and Navy corrosion officials told us that, because CPC  funding is awarded for a 2-year project implementation period, they  typically do not have sufficient funds remaining for validating the ROI  after projects are implemented. However, the Army group that conducts  CPC projects for facilities has completed 8 of its 9 required ROI validations  for projects funded in fiscal year 2005. According to an Army official, this  group has historically been allocated $5 million annually for CPC  activities. The Corrosion Office Director told us they are aware of the  military departments’ difficulties in completing the validations and are  considering budgeting DOD-wide CPC funds for ROI validation. If this  action is taken, funding would go to the Product Team responsible for  CPC metrics for the team to allocate to ensure completion of the  validations.
Because the military departments have not completed the required  validations of ROI estimates, DOD and the military departments are unable  to fully demonstrate the costs and benefits of the CPC projects. One  project selection panel member told us that the lack of completed ROI  validations makes it more difficult for the panel to make decisions about  how to change project selection criteria to invest limited funds in the types  of projects with the greatest benefits. Moreover, the continued access to  limited evaluative data prevents DOD from making better informed  decisions about the amount of funding for the Corrosion Office’s CPC  program, as well as where best to invest CPC funds.
section_title: Product Teams Propose and Implement DOD-wide CPC Activities, and the Staffing Process for the Teams Is Evolving
paragraphs: The Corrosion Office has created seven Product Teams to propose and  implement DOD-wide CPC activities in seven areas, as discussed earlier.  Using volunteers from the military departments, the Product Teams  propose activities, such as determining the costs of corrosion, which are  then selected for funding. In the past, product team members served on an  informal voluntary basis with little involvement from the military  departments. However, now that each department has a Corrosion  Executive, the process for selecting the Product Teams’ members is  changing.
subsections: section_title: Product Teams Implement CPC Activities
paragraphs: According to a Product Team member, the Product Teams convene during  the DOD Corrosion Forums held twice each year and coordinate activities  by email and through the Corrosion Office Web site during the rest of the  year. For example, at the July 2010 DOD Corrosion Forum that we  observed, the Product Teams presented their activities to the attendees,  discussed their progress on the activities, and prepared a set of goals for  actions to be completed before the next Corrosion Forum. The Product  Teams’ action plans are included in the DOD Corrosion Prevention and  Mitigation Strategic Plan and are updated annually. The Product Teams  are staffed by representatives from the military departments, and  Corrosion Office staff and the Product Team representatives told us that  an informal process is used to fund the CPC activities implemented by the  Product Teams. Specifically, each year the Director of the Corrosion  Office asks the Product Team chairs to provide details on the funding  required for the activities planned for the next year. The Director then  requests the funds through the annual budget request submitted to the  DOD Comptroller. Product Team representatives told us that they were  satisfied with the level of funding provided for CPC activities. Table 2 lists  the funding for each Product Team for fiscal years 2005 through 2010.
The tasks completed by the Product Teams vary according to their area of  specialization. Descriptions of two Product Teams’ tasks and impact are  used to illustrate the specialization and important information generated.
The Metrics, Impact, and Sustainment Product Team has focused on  determining the baseline costs of corrosion for DOD. This task involves  establishing a methodology to measure the costs associated with  corrosion throughout DOD and applying the methodology to selected  components of the military departments (such as Army aviation and  missiles, and Navy ships). These efforts resulted in a series of reports that  estimated the cost of corrosion for various classes of equipment and  facilities across the military departments. A project manager with whom  we met told us that these cost studies helped him and his colleagues to  identify areas in which to focus their CPC efforts. He told us that the Army  Aviation and Missile Command established a corrosion team to focus on  cost drivers, following the issuance of a cost study that estimated Army  aviation and missile assets had corrosion costs of $1.6 billion per year.  This Product Team plans to update the cost of corrosion for each military  department component on a 3-year cycle and to use this information to  track the impact of CPC efforts over time. This Product Team also has  ongoing efforts to measure the impact of corrosion on readiness. A  preliminary report, published in October 2009, concluded that corrosion- related factors can cause asset unavailability of up to 16 percent, with the  greatest impact occurring on aviation assets. One Product Team  representative told us that (1) their studies on corrosion costs were  completed prior to the Corrosion Executives’ being established at the  military departments and (2) the Product Team plans to consult with the  Corrosion Executives to incorporate their input into future updates to the  cost studies. He told us that he expected this would have a positive impact  at the military departments.
In addition, the Specifications, Standards, and Product Qualification  Product Team has developed a Web-based tool to help suppliers match  their products with existing specifications and standards used by DOD. A  Product Team representative told us that this activity is expected to result  in improved technologies and products available to the DOD maintenance  community for use in preventing corrosion. Additionally, the Product  Team representative told us that product specifications are required to be  updated every 2–5 years and that these updates cost DOD up to $20,000  each. He told us that there are over 800 corrosion-related product  specifications, such as information on what types of treatments, primers,  and paints are to be applied to a particular material in a given situation.  Because of the large number of specifications involved and the cost of  revising each of them, this Product Team has focused its efforts on  assembling a list of 38 “high-risk” specifications that are given priority for  funding.
section_title: Staffing of the Product Teams Is Evolving to Incorporate the Corrosion Executives and Their Inputs
paragraphs: The Corrosion Executives of the military departments are responsible for  supporting the Product Teams, which are part of the CPC Integrated  Product Team, and the Product Team staffing process is evolving to  recognize their emerging roles and responsibilities. Since February 2010,  the Corrosion Executives have been required by DOD Instruction to  support the Product Team process by designating trained or qualified  representatives. According to the DOD Corrosion Prevention and  Mitigation Strategic Plan, the Director of the Corrosion Office manages  and coordinates the CPC Integrated Product Team, which includes the  Product Teams. The Strategic Plan does not reflect this new requirement  for the Corrosion Executives to designate representatives to the Product  Teams.
The Corrosion Executives and two of the Product Teams’ chairs told us  that the process of staffing the Product Teams is changing. According to  the Navy Corrosion Executive, in the past, participation on a product team  has always been based on individual interest and whether a volunteer had  time available to dedicate to a Product Team. However, recently, when a  Navy representative who was serving as the chair of a Product Team asked  to be replaced, the Navy Corrosion Executive nominated another  individual from the Navy to serve on the Product Team. The Corrosion  Executive communicated the nomination to the Director of the Corrosion  Office and the Corrosion Executives of the Army and Air Force, and there  were no objections to the change. The Navy Corrosion Executive told us  that this example is typical of the informal process currently used to staff  the Product Teams. He added that the Corrosion Executives have met with  the Director of the Corrosion Office to discuss establishing a Corrosion  Board of Directors, which could establish regular meetings between the  Corrosion Executives and the Director of the Corrosion Office to discuss  policy issues, including a more formal process of staffing the Product  Teams.
While the Corrosion Office has, in the past, relied on the Product Team  members to represent the position of the military departments on  corrosion-related issues, the Corrosion Executives told us they felt that it  was now more appropriate for such discussions to occur between the  Director of the Corrosion Office and the Corrosion Executives directly.  However, the Air Force has recently designated particular Product Team  representatives from their military department as authorized to speak for  the department in communications with the Corrosion Office. The Air  Force Corrosion Executive told us that this designation was intended to  prevent any miscommunication between Product Team representatives  and the Corrosion Office.
Product Team members with whom we spoke had mixed reactions to the  involvement of the Corrosion Executives in the Product Teams. One  member told us that he felt it was appropriate for the Product Teams to be  staffed by volunteers and was concerned that an increased role by the  Corrosion Executives in designating members to the Product Teams  would reduce the commitment of the members to the Product Teams. In  contrast, another Product Team member told us that he thought it is good  for the Corrosion Executives to be more involved, because it is important  to ensure that the Corrosion Executives have buy-in to the Product Team  activities.
section_title: Conclusions
paragraphs: Corrosion significantly impacts DOD in terms of cost, readiness, and  safety. The Corrosion Office has made substantial progress toward  establishing a coordinated DOD-wide approach to controlling and  mitigating corrosion, including  creating a process to select and fund projects intended to develop and  use new CPC technologies,  quantifying the costs of corrosion, and    working more closely with the military departments.
Also, each military department has recently designated a legislatively  mandated Corrosion Executive to manage and coordinate its corrosion  efforts and give increased visibility to this important area of equipment  and infrastructure sustainment. However, some continuing uncertainty  about how the Corrosion Executives should fulfill their responsibilities  may be limiting the positive impact that these positions could have on CPC  efforts. For example, the nature and extent of reviews of CPC proposals  before they are submitted to the Corrosion Office were cited as a possible  cause for differences in the rates at which the military departments’  proposed projects are selected for supplemental funding from the  Corrosion Office. Similarly, some issues with how clearly the criteria used  to select projects for funding are communicated may have negative  effects. These effects include significant revisions to project proposals and  can result in fewer projects being accepted. If these concerns are not  addressed, DOD and the military departments may not achieve maximum  benefits from the program and thereby limit the effects of corrosion on the  assets that they manage. An additional area of concern is the limited  follow-through on the requirement to validate the ROIs that were  originally estimated for the funded projects. While the few validations  completed thus far document positive results, the small and non- representative group of findings prevents (1) generalization about the  impact of other funded projects and (2) efforts to identify and focus future  funding toward types of projects that have been shown to have the best  likelihood for high payoffs. Also, more complete information on ROIs  could provide DOD with an empirical basis for determining how, if at all,  the Corrosion Office’s funding and activities should be modified.
section_title: Recommendations for Executive Action
paragraphs: To ensure that the Department of Defense is taking full advantage of the  cost savings that can be achieved by implementing CPC projects, we  recommend that the Secretary of Defense direct the Under Secretary of  Defense (Acquisition, Technology and Logistics) to take the following  three actions:    Update applicable guidance, such as DOD Instruction 5000.67,  Prevention and Mitigation of Corrosion on DOD Military Equipment  and Infrastructure or the DOD Corrosion Prevention and Mitigation  Strategic Plan to further define the responsibilities of the military  departments’ Corrosion Executives, to include more specific oversight  and review of the project proposals before and during the project  selection process.
Modify the DOD Corrosion Prevention and Mitigation Strategic Plan  to clearly specify and communicate the criteria used by the panel in  evaluating CPC projects for funding consideration. This action should  include listing and describing each criterion used by the panel in the  preliminary and final project evaluation decisions and discussing how  the criteria are to be used by the panel to decide on project  acceptability.
Develop and implement a plan to ensure that return on investment  validations are completed as scheduled. This plan should be completed  in coordination with the military department Corrosion Executives and  include information on the time frame and source of funding required  to complete the validations.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD agreed with one of our  recommendations and did not agree with the other two recommendations.  DOD’s letter also provided some technical comments that we have  incorporated as appropriate. For example, DOD’s comments noted some  new information that the department had not shared with us previously.  Therefore, we revised our report to reflect the fact that DOD now  estimates that approximately $1.9 billion, or 11.7 percent, of facilities’  maintenance costs are related to corrosion. We have also revised our  report to reflect additional information the department provided on how  the Product Teams are staffed. DOD’s comments are included in their  entirety in appendix III.
DOD did not agree with our recommendation that the Secretary of  Defense direct the Under Secretary of Defense (Acquisition, Technology  and Logistics) to update applicable guidance, such as DOD Instruction  5000.67 or the DOD Corrosion Prevention and Mitigation Strategic Plan,  to further define the responsibilities of the military departments’  Corrosion Executives, to include more specific oversight and review of the  project proposals before and during the project selection process. In its  comments, DOD stated that DOD-level policy documents are high-level  documents that delineate responsibilities to carry out the policy. Specific  implementing guidance is provided through separate documentation. DOD  also stated that the Corrosion Office will be updating the DOD Corrosion  Prevention and Control Planning Guidebook and beginning the process  of converting it into a DOD manual in the next year. In addition, DOD’s  response noted that the “best practice” of the military department  Corrosion Executives conducting their own internal reviews before and  during the project selection process will be included in that update. Our  recommendation to “update applicable guidance” did not prescribe where  the updated guidance should be made. Instead, our recommendation only  offered examples of documents that might be modified. We believe that  updating the Guidebook and converting that to a DOD Manual would  provide the needed direction to the military department Corrosion  Executives and would meet the intent of our recommendation.
DOD also did not agree with our recommendation that the Secretary of  Defense direct the Under Secretary of Defense (Acquisition, Technology  and Logistics) to modify the DOD Corrosion Prevention and Mitigation  Strategic Plan to clearly specify and communicate the criteria used by the  panel in evaluating CPC projects for funding consideration, as well as  listing and describing each criterion used by the panel in the preliminary  and final project evaluation decisions. In its response, DOD stated that it  disagreed with the implications that the Strategic Plan is deficient in  clearly specifying the criteria and that added discussion is needed in the  Strategic Plan regarding how the criteria are used by the panel. DOD  commented that the criteria used by the panel and the steps in the process  are completely transparent to the  authors, and the  details have been verbally communicated to stakeholders and are available  on line and by e-mail in Appendix D of the Strategic Plan. However, DOD  also stated: (1) “While not always defined as ‘criteria,’ all factors  considered in the evaluation are articulated in Appendix D” and (2) “While  not expressly defined as ‘criteria,’ these indices are clearly criteria from  which anyone submitting a project plan can determine what is likely to  improve the chances of a higher DEA [the model used in the panel  process] ranking.”
In developing our findings, we analyzed the Strategic Plan to understand  the process and criteria used to evaluate CPC projects for funding;  observed the panel proceedings for both the preliminary and final project  reviews; discussed the panel process with panel members and military  department Corrosion Executives; and discussed their understanding of  the process and the criteria used for project evaluation with Corrosion  Executives and project authors. The views of the panel members,  Corrosion Executives, and project authors, as well as our observations,  formed our findings and conclusions and led to our recommendations.  Despite the efforts of the Corrosion Office to communicate with its  constituency through briefings, emails, and other methods as delineated in  DOD’s comments, some of those involved in the process reported to us  that they did not clearly understand what the criteria were and when they  were used in the process. Moreover, DOD’s comments quoted above  acknowledge that criteria are not always clearly defined in Appendix D of  the Strategic Plan. We believe our findings are sound and that our  recommendation to clearly identify and communicate the criteria is still  appropriate. Continued use of unclear criteria could result in wasted  personnel time associated with preparing and revising proposals.
DOD agreed with our recommendation that the Secretary of Defense  direct the Under Secretary of Defense (Acquisition, Technology and  Logistics) to develop and implement a plan to ensure that return on  investment validations are completed as scheduled. DOD stated that plans  are underway to address this requirement.
DOD also commented that some of our statements are inaccurate. For  example, DOD claims that statements in the draft report regarding the use  of different criteria for the preliminary and final project evaluation are not  true. However, in our discussions with the panel members and project  authors, as well as our observations of the panel process, it was clear that  some criteria were used in one evaluation and not in the other. Second,  DOD stated that the evaluation team  is not an “ad hoc working  group” and the panel members are selected based on experience,  expertise, and judgment. In response to DOD’s comments, we modified  our characterization of the panel. Finally, DOD commented that a  statement in the draft report that the process did not consider military  department priorities is not accurate. However, as we state in the report,  both Corrosion Office staff and a panel member told us that it was not the  intent of the CPC program to fund military department priorities, but to  award funds to the most competitive projects. Also, DOD’s comments  state that “the panel does not initially rank projects using the military  department priorities” and assert that those priorities have been used by  the panel in the final ranking if a military department has two or more  projects that are considered to be comparatively equal. However, this is a  relatively limited circumstance and, in the view of some stakeholders,  does not adequately acknowledge the priorities of the military  departments.
We are sending copies of this report to the appropriate congressional  committees. We are also sending copies to the Secretary of Defense; the  Deputy Secretary of Defense; the Under Secretary of Defense  (Comptroller); the Under Secretary of Defense (Acquisition, Technology  and Logistics); the Secretaries of the Army, Navy, and Air Force; and the  Commandant of the Marine Corps. This report will also be available at no  charge on our Web site at http://www.gao.gov. Should you or your staff  have any questions concerning this report, please contact me at (202) 512- 8246 or edwardsj@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Key contributors are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: For the overall context of our analysis, we reviewed relevant laws;  Department of Defense (DOD) and military department-specific guidance;  the DOD Corrosion Prevention and Mitigation Strategic Plan; and  reports issued by LMI and the Defense Science Board.
To address our objectives, we met with the Director of the Office of the  Secretary of Defense’s Corrosion Policy and Oversight Office (Corrosion  Office), members of the Corrosion Prevention and Control (CPC) project  selection panel assembled by the Director of the Corrosion Office, DOD  contractors who assist the Director of the Corrosion Office in managing  the CPC program, each military department’s Corrosion Executive and  their staffs, representatives of three of the seven Working Integrated  Product Teams (Product Teams) that coordinate CPC activities, and the  six project managers who authored the proposals for 11 of the CPC  projects included in our sample.
We obtained data from the Corrosion Office for projects that the military  departments had submitted for funding consideration for fiscal years 2005  through 2010. Projects submitted for fiscal year 2011 funding were not in  that population because the Corrosion Office had not completed the  funding of these projects at the time of our review. We assessed the  reliability of the data by (1) interviewing staff knowledgeable about the  data and the system that produces them; (2) testing for missing data,  outliers, or obvious errors using comparisons to data obtained during prior  GAO reviews; and (3) conducting logic tests. We determined that the data  were sufficiently reliable for the purposes of our review, which were to  determine how the military departments decide which projects to submit  to the Corrosion Office for funding consideration, and how a panel of  experts and the Corrosion Office decide which projects to approve for  funding. To identify corrosion projects for a more detailed review, we  selected a nonprobability sample of projects from each of fiscal years  2006, 2008, and 2010 using the following criteria:  year the project was submitted to the Corrosion Office,    whether the Corrosion Office did or did not accept the project,  the Corrosion Office’s and military department’s combined project  cost, and  the estimated return on investment of the project.
Applying the above criteria, we selected a sample of 24 projects for further  review.
To determine the extent the Corrosion Executives are involved in  preparing CPC project proposals for submission to the Corrosion Office  for funding consideration, we met with each of the Corrosion Executives  and their staffs and reviewed the military departments’ corrosion reports,  to identify whether there was a process at each department to review CPC  projects. For projects in our sample, we interviewed six officials who were  the principal authors and points of contact for 11 of the projects in our  sample. We also reviewed legislation and military department documents,  as well as guidance on internal controls, to identify relevant  responsibilities and practices that could be used as criteria.
To determine the extent the Corrosion Office has created a process to  review and select projects for funding, we interviewed the Corrosion  Office staff who manage the process of requesting and receiving project  proposals from the military departments. We also interviewed some  members of the project selection panel that decided which projects to  accept for funding to obtain their observations on the evaluation and  selection process. For projects in our sample, we reviewed records of the  project selection panel’s decisions whether to accept the projects for  funding. We observed the project selection panel’s preliminary and final  project evaluation meetings for fiscal year 2011 projects to determine the  current process for evaluating projects. Additionally, we reviewed the  project proposal template included in DOD’s Corrosion Prevention and  Mitigation Strategic Plan.
To determine the extent the military departments have validated the return  on investment (ROI) of funded projects, we obtained the 10 project review  reports that had been completed for fiscal year 2005 projects. We reviewed  these reports for data on the validated ROI, the comparison between the  validated data and the original estimate, and information on the reasons— if applicable—why the ROI had changed.
To determine how the Corrosion Office determines which CPC activities  to fund, we interviewed the chairs of three of the seven Product Teams  who manage the CPC activities. We also reviewed materials (e.g., cost  studies) that the Product Teams produced, obtained information on the  funding for the Product Teams and attended sessions at the DOD  Corrosion Forum where Product Team representatives described their  ongoing and planned activities.
We conducted this performance audit from April 2010 through December  2010 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.
section_title: Appendix II: Information on Selected Corrosion Prevention and Control Projects
subsections: section_title: The Army Aviation and Missile Command implemented this project which had estimated costs of $95,000 divided equally between the Army and the Corrosion Office and an estimated ROI of 47:1. The project involved using advanced commercial off the shelf forced-air dehumidification technology to dehumidify the air intake for the PATRIOT missile system radar set. The intent of this effort was to reduce the $46.4 million in annual corrosion costs identified in DOD’s May 2007 report on the cost of corrosion for Army aviation and missile equipment.
paragraphs: The Corrosion Office accepted the  project and provided $48,000.  Army Aviation and Missile  Command staff told us that the  project is still being implemented  and that some units have  deployed to the field.
The Army Aviation Missile Command and the Naval Air Systems  Command submitted a joint project proposal to demonstrate new  technology using a laser powder deposition technique to repair  knife edge seals that are components within the T700 engine.  Almost all of the used (overhauled) seals wear enough to require  repair or replacement. This new technology can reduce repair time  and replacement of the seals. The T700 engine is used by the Air  Force, Army, and the Navy. The military departments did not  identify their funding contribution but requested $30,000 from the  Corrosion Office. This Army-led project has an estimated ROI of  7:1.
The Corrosion Office accepted  this project and provided $30,000.  Army Aviation and Missile  Command staff told us that delays  in obtaining Army funding have  slowed the implementation of this  project.
The Naval Air Systems Command submitted this project proposal  for a total cost of $2.7 million, of which 68 percent was requested  from the Corrosion Office. The project has an estimated ROI of  14:1. Due to the high rate of corrosion-related replacement of  antennas on the Navy’s F/A-18 Hornets and the cost of $2.5  million per year to replace the antennas, the project proposed  developing a new generation of sealants to avoid corrosion on  aircraft antennas and floorboards.
The project was accepted but not  funded by the Corrosion Office.  Naval Air Systems Command staff  told us that the project was funded  by other sources and is in the  early stages of implementation.
The Navy and Army jointly submitted this project proposal with the  Naval Air Systems Command as the lead organization. The  project had a total cost of $470,000, with 74 percent requested  from the Corrosion Office. The project’s estimated ROI was 2:1.  This project would use Metallast technology to help provide more  precise control of coating consistency, durability, and corrosion  protection to improve the process of anodizing complex parts.  Implementation would include installing new computer controlled  anodizing systems at two Naval aviation depots, and also  assessing the feasibility of a follow-on implementation at an Army  depot.
The project was accepted, but not  funded by the Corrosion Office.  Naval Air Systems Command staff  told us that the project was funded  by other sources, and has been  completed.
Naval Air Systems Command submitted this project proposal for a  total cost of $550,000, with 82 percent requested from the  Corrosion Office. Its estimated ROI was 1:1. The project proposal  addresses implementation of a Plug and Coat sputtered aluminum  system on an existing IVD aluminum system at the Naval depot in  Jacksonville and to validate potential use in other naval aviation  depots. The Plug and Coat system is a proven technical solution  to access cavities and other internal surfaces of high-strength  steel components and coat them with aluminum to protect against  corrosion. The proposal said that the current process (1)  consumes excessive man-hours to process parts and (2) leads to  additional corrosion of components.
The project was not accepted by  the Corrosion Office. Naval Air  Systems Command staff told us  that the project was not pursued  further.
The Air Force Research Laboratory submitted this project  proposal for a total cost of $560,000, with 54 percent requested  from the Corrosion Office. Its estimated ROI was 605:1. The  project plan proposed evaluating and testing several new paint  spray gun systems using various types of existing coatings. Ease  of use, economics, and the quality and uniformity of the finish  coating would be compared for the various systems.
The project was accepted but not  funded by the Corrosion Office.  According to laboratory officials,  the project was not resubmitted  because Air Force priorities  changed and they did not believe  it would rank above the funding  line.
The U.S. Army Natick Soldier Center submitted this project  proposal for a total cost of $627,000, with an estimated ROI of  842:1. The project plan proposed demonstrating new processes  for use of an alternative to copper 8 coating system now in use for  protection against material bio-degradation. The proposed  alternative was an environmentally friendly coating system for  fabric protection for use on tents, truck covers, helmets,  parachutes, and other materials.
This project was accepted by the  Corrosion Office but not initially  funded. According to a center  official, the project was eventually  funded by the Corrosion Office.  The project is complete and a final  project report was recently sent to  the Corrosion Office, but no ROI  validation was conducted as part  of the final report.
The U.S. Army Corps of Engineers, Engineer Research  Development Center, submitted this project proposal for a total  cost of $1.6 million split evenly between the Army Corps of  Engineers and the Corrosion Office, and estimated an ROI of 6:1.  The initial project plan scope focused on testing remote monitoring  of Army non-metallic bridges to help identify corrosion or  degradation where ordinary nondestructive testing methods  cannot identify actively growing defects. The Army expanded the  scope of this project at the request of the Corrosion Office. As a  result of the Interstate 35W Bridge collapse in Minneapolis,  Minnesota, with corrosion and fatigue cracking likely contributors  to the catastrophe, the Corrosion Office requested the Army to  expand the scope of this project to include both non-metallic and  metallic bridges. Because of this, the Corrosion Office waived the  $500,000 funding limit for this project. Engineers stated that part  of the project was to monitor the I-20 Bridge near Vicksburg,  Mississippi. Expansion of the scope included coordinating with the  Department of Transportation, Federal Highways Administration,  and the Illinois and Indiana Departments of Transportation.
Prior to the refocusing of the  project, engineers told us that it  was accepted with some  additional clarification required.  Engineers were in the process of  resubmitting the project proposal  when the Corrosion Office  requested the wider scope. This  project was accepted and funded.  The project is three fourths  completed.
The Naval Facilities Engineering Service Center, Pacific  submitted this project proposal for a total cost of $1.2 million, with  $80,000 requested from the Corrosion Office. Its estimated ROI  was 5:1. The project was to demonstrate the effectiveness of a  discrete galvanic anode cathodic protection system as a means of  mitigating corrosion and increasing the service life during the  repair of the reinforced concrete Kilo Wharf at the Naval Base  Guam.
This project was accepted and  funded. The project is still being  implemented. Engineers told us  that the project ran into some  complications. For example, the  sites where the project was  installed are not the originally  planned sites. The contractor  estimates at the originally planned  sites were much higher than the  government estimates. Because  of this the facilities command had  to find a different site to use for  project implementation.
The Naval Facilities Engineering Service Center, Pacific submitted  this project proposal for a total cost of $450,000, with 56 percent  requested from the Corrosion Office. The estimated ROI was 2:1.  The project was to test results of a technical paper reporting that  an improved backfill and/or galvanic anode system may provide  better cathodic protection than current impressed systems.
A center official noted that the  Navy removed this from funding  consideration because (1) it could  not find any matching funds and  (2) there was no site selected to  demonstrate the technology.
The Naval Air Systems Command submitted this project proposal  for a total cost of $940,000, with 29 percent requested from the  Corrosion Office. The project’s estimated ROI was 2:1. The  project was to evaluate alternative paint removal technology that  could be used (1) where spot paint removal is necessary for non- destructive inspections and (2) at intermediate and depot-level  facilities where larger scale removal of coating is required for  inspections and repairs.
This project was not accepted and  not funded by the Corrosion  Office. A command official noted  that funding was obtained from  other sources to complete this  project.
section_title: Appendix III: Comments from the Department of Defense
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact name above, the following staff members made  key contributions to this report: Ann Borseth, Assistant Director; Janine  Cantin; Foster Kerrison; Charles Perdue; Terry Richardson; Michael  Shaughnessy; and Erik Wilkins-McKee.
section_title: Related GAO Products
paragraphs: Defense Management: Observations on Department of Defense and  Military Service Fiscal Year 2011 Requirements for Corrosion  Prevention and Control. GAO-10-608R. Washington, D.C.: April 15, 2010.
Defense Management: Observations on the Department of Defense’s  Fiscal Year 2011 Budget Request for Corrosion Prevention and Control.  GAO-10-607R. Washington, D.C.: April 15, 2010.
Defense Management: Observations on DOD’s Fiscal Year 2010 Budget  Request for Corrosion Prevention and Control. GAO-09-732R.  Washington, D.C.: June 1, 2009.
Defense Management: Observations on DOD’s Analysis of Options for  Improving Corrosion Prevention and Control through Earlier Planning  in the Requirements and Acquisition Processes. GAO-09-694R.  Washington, D.C.: May 29, 2009.
Defense Management: Observations on DOD’s FY 2009 Budget Request  for Corrosion Prevention and Control. GAO-08-663R. Washington, D.C.:  April 15, 2008.
Defense Management: High-Level Leadership Commitment and Actions  Are Needed to Address Corrosion Issues. GAO-07-618. Washington, D.C.:  April 30, 2007.
Defense Management: Additional Measures to Reduce Corrosion of  Prepositioned Military Assets Could Achieve Cost Savings. GAO-06-709.  Washington, D.C.: June 14, 2006.
Defense Management: Opportunities Exist to Improve Implementation  of DOD’s Long-Term Corrosion Strategy. GAO-04-640. Washington, D.C.:  June 23, 2004.
Defense Management: Opportunities to Reduce Corrosion Costs and  Increase Readiness. GAO-03-753. Washington, D.C.: July 7, 2003.
Defense Infrastructure: Changes in Funding Priorities and Strategic  Planning Needed to Improve the Condition of Military Facilities.   GAO-03-274. Washington, D.C.: February 19, 2003.