To ensure core capability is maintained, Congress enacted Section 2464 of Title 10, which requires, in part, that the Secretary of Defense maintain a core logistics capability that is government owned, government operated, and that uses government personnel, equipment, and facilities. The authority and responsibility of the Secretary of Defense under Section 2464 has been delegated to the Under Secretary of Defense for Acquisition, Technology, and Logistics. Statutory guidance and DOD’s implementing guidance are aimed at ensuring that repair capabilities will be available to meet the military needs of the nation should an emergency or contingency arise (i.e., surge situations). The concept of core capability helps guide government policy on which activities DOD should perform at a military depot and which activities the private sector could or should perform. DOD’s two-pronged approach in its implementation of the core statute includes (1) the biennial core determination process for capturing and reporting core capability requirements and associated planned workloads for fielded systems and (2) the acquisition process for identifying and establishing core capability for new systems and those undergoing modifications. The following summarizes these processes. DOD’s 2007 biennial core determination process began with a December 2005 tasking letter from the Deputy Under Secretary of Defense for Logistics and Materiel Readiness to the services. The letter included guidance on the process and required the services to provide proposed depot maintenance core capability requirements and sustaining workloads for fiscal year 2007. The 2005 guidance in the tasking letter generally mirrored subsequent guidance issued in January 2007. The DOD core determination process is comprised of a series of mathematical computations and adjustments that are used to derive required core capability requirements and the associated planned workloads expected to be available to sustain those capabilities. The computations involved in this methodology are performed from the perspective of the service that owns the depot maintenance assets and are divided into two parts. Part 1 identifies the core capability requirements for DOD weapon systems. The services identify applicable weapon systems based on the JCS contingency scenarios. The JCS scenarios represent plans for responding to conflicts that may occur in the future. All systems required to execute the JCS scenarios are to be included in the core determination process regardless of whether depot maintenance is actually performed in the public or private sectors. The services exclude some systems for several allowable reasons (i.e., special access programs) that are documented citing the authority for each exclusion from the core process. After the applicable weapon systems are identified, the services compute annual peacetime depot maintenance capability requirements in direct labor hours to represent the amount of time it regularly takes to perform required maintenance, and a number of adjustments to these computations are then applied. Contingency requirements and resource adjustments are made to account for applicable surge factors during the different phases of a contingency (for example, preparation/readiness, sustainment, and reconstitution). The objective is to determine the most appropriate composite “surge” adjustment for a particular set of circumstances. Further adjustments are made to account for redundancy in depot capability. For example, a service may determine that repair capabilities for specific systems maintained in military depots are so similar that the capabilities for one system can effectively satisfy the capability requirements for another. Core capability requirements also are adjusted when one service’s maintenance capability requirements will be supported by other services. Throughout Part 1, core capability data for individual systems are incorporated into categories of equipment and technologies, which are also known as work breakdown structure categories, and these categories are to be broken down at a minimum, to the third level of indenture for aircraft and components, the second level of indenture for aircraft engines, and the first level of indenture for all other categories. For example, the aircraft equipment category includes subcategories for airframes, aircraft components, and aircraft engines, while the airframes category is further divided by types of airframes and the aircraft component category is subdivided into instruments, landing gear, avionics/electronics, and other areas. Part 2 of the biennial core process identifies the planned workloads associated with sustaining the depot maintenance core capability requirements identified in Part 1. In this part, after the amount of depot maintenance workloads (in direct labor hours) that are needed to sustain core capabilities are subtracted from funded public sector depot maintenance workload in each equipment/technology category, the difference could represent either an amount of workload that is not needed to sustain core capability requirements or a shortfall amount. This part establishes a minimum level of public sector depot maintenance workloads within each service. Applicable information on the results of each step in this process for Parts 1 and 2 are recorded on the DOD depot maintenance core capability worksheets and provided to OSD, which compiles the service data into a departmentwide assessment that is summarized in an internal report. DOD uses the acquisition process to identify and establish core capability requirements for new and modified systems. 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. DOD Instruction 5000.02, which provides additional DOD guidance for managing and overseeing defense acquisition programs, requires that program managers perform a core logistics analysis, as part of the acquisition strategy, by the Milestone B acquisition decision point or by Milestone C, if there is no Milestone B. Milestone B is the second major decision point in the acquisition process and comes after the technology development phase. Milestone C, the third major decision point, comes after the system development and production phase. The core logistics analysis identifies whether the capability to maintain and repair a weapon system is necessary to support core requirements and whether the capability should be established at a military depot. Furthermore, according to DOD Directive 4151.18, capabilities to support identified depot maintenance core requirements shall be established not later than 4 years after the system’s initial operational capability. The program manager uses DOD’s acquisition management framework that is intended to translate mission needs and requirements into systems acquisition programs. The program manager develops an acquisition strategy that details how the program’s goals and objectives will be met. The acquisition strategy also serves as a “road map” for program execution from program initiation through post-production support. As part of the acquisition strategy, the core analysis is supposed to identify whether a weapon system will satisfy core logistics requirements. In 2001, we reported that DOD lacked assurance that core logistics capabilities were being maintained as needed to ensure timely and effective response to national defense emergencies and contingencies, as required by Section 2464 of Title 10, noting that several factors precluded this assurance. DOD’s core policy, which established a process for identifying core maintenance capability, was not comprehensive in that it did not provide a forward look at new weapon systems and associated future maintenance capability requirements. In addition, we also reported that DOD has had other limitations, including a lack of sufficient investment in facilities, equipment, and human capital to ensure the long- term viability of the military depots. DOD, through its core process, has not comprehensively and accurately assessed whether it has the required core capability to support fielded systems in military depots. Although DOD generally followed its own guidance for conducting the 2007 biennial core assessment, we found that (1) DOD’s method of compiling and internally reporting core requirements and associated workloads for the 2007 core process did not reveal shortfalls that the services had identified for specific equipment/technology categories, (2) the services had errors and inconsistencies in their identification of core requirements and associated workloads, and (3) there was no mechanism for ensuring that the services take corrective actions to resolve capability shortfalls. As a result of these deficiencies, DOD lacks assurance that it has the required capabilities to support its core requirements. Finally, DOD is not required to provide Congress information on its core process, and therefore the results of the core process are not readily and routinely visible for purposes of congressional oversight. The method by which DOD compiled and internally reported its 2007 core requirements and associated workloads did not reveal core capability shortfalls, even though the services, in their core computations, had identified shortfalls in specific equipment/technology categories. For example, the Army and the Navy identified workload shortfalls to support avionics and electronics components—a shortfall of 238,090 labor hours in the Army and 78,974 hours in the Navy. However, DOD did not disclose this and other specific shortfalls because it aggregated the results of the core determination process in its internal reporting on core capability. As a result, DOD did not present a comprehensive and accurate assessment of the services’ 2007 core capability. Core capability shortfalls exist when the military depots do not possess the combination of skilled personnel, facilities, equipment, processes, and technology that are needed to perform a particular category of work (e.g., composite repair) and that are necessary to maintain and repair the weapon systems and other military equipment needed to fulfill strategic and contingency plans. When shortfalls occur, DOD may not have the necessary capability to repair weapon systems, which could affect the readiness of troops that rely on these weapon systems that support future military operations. According to an internal memorandum summarizing the results of the core process for the Under Secretary of Defense for Acquisition, Technology, and Logistics, DOD determined that projected workload in military depots was adequate to support core capability requirements. The memorandum stated, “The Services are complying with their core capability requirements as they meet wartime needs. Their projected organic workloads in military depots are adequate to support core capability requirements.” More specifically, the memorandum stated that the department’s planned maintenance workload of 92.7 million hours was “well over” the minimum of 70.5 million hours needed to fulfill core requirements at military depots.