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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.

Summary: 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. 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.