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In recent years the Department of Defense (DOD) has implemented a policy change placing increased reliance on defense contractors for overhaul and maintenance and related logistics activities. This policy initiative has generated questions from the Congress about the capability and future viability of existing in-house logistics activities, particularly that of the military depots that have traditionally performed the largest share of the Department's depot maintenance work. DOD is required under 10 U.S.C. 2464 to identify and maintain within government-owned and-operated facilities a core logistics capability, including the equipment, personnel, and technical competence required to maintain weapon systems identified as necessary for national defense emergencies and contingencies. Specifically, the Secretary of Defense is to identify the workloads required to maintain the core logistics capabilities and assign to government facilities sufficient peacetime workload to ensure cost efficiency and technical competence, while preserving capabilities necessary to fully respond to national defense emergencies and contingencies.
In recent years the Department of Defense (DOD) has implemented a policy change placing increased reliance on defense contractors for overhaul and maintenance and related logistics activities. This policy initiative has generated questions from the Congress about the capability and future viability of existing in-house logistics activities, particularly that of the military depots that have traditionally performed the largest share of the Department's depot maintenance work. DOD is required under 10 U.S.C. 2464 to identify and maintain within government-owned and-operated facilities a core logistics capability, including the equipment, personnel, and technical competence required to maintain weapon systems identified as necessary for national defense emergencies and contingencies. Specifically, the Secretary of Defense is to identify the workloads required to maintain the core logistics capabilities and assign to government facilities sufficient peacetime workload to ensure cost efficiency and technical competence, while preserving capabilities necessary to fully respond to national defense emergencies and contingencies.
The Department of Defense's (DOD) policy and practices for developing core depot maintenance capabilities are creating gaps between actual capabilities and those needed for future national defense emergencies and contingencies. If the existing policy is not clarified and current practices continue, the military depots will not have the equipment, facilities, and trained personnel to provide logistics support on many of the weapon systems and related equipment for military use in the next five to 15 years. Although DOD intends for its depots to have these capabilities, actual practices are much different. Core policy does not adequately take into consideration future systems repair needs and the impact of retiring systems on developing capabilities. Furthermore, the practices of individual services hinder the establishment of future core capabilities and management oversight. Additional investments in new facilities, equipment, and workforce training and revitalization have been limited for some time. Finally, there is no strategic plan and associated service implementation plans to create and sustain a viable depot maintenance capability.
GAO has identified spare parts supply as a long-standing Department of Defense (DoD) management problem. In December 2003, GAO reported on problems with Operation Iraqi Freedom (OIF) logistics support including shortages of spare parts and supplies in Iraq. This report expands on that effort by assessing the following: (1) what supply shortages were experienced by U.S. forces in Iraq between October 2002 and September 2004, and what impact the shortages had on their operations; (2) what primary deficiencies in the supply system contributed to any identified supply shortages; and (3) what actions DoD has taken to improve the timely availability of supplies for current and future operations. To address these objectives, GAO selected nine items that represented possible shortages with operational impacts. U.S. troops experienced shortages of seven of the nine items GAO reviewed. GAO identified five systemic deficiencies that contributed to shortages of the reviewed items, including inaccurate Army war reserve spare parts requirements and ineffective distribution. Annual updates of Army war reserve parts requirements have not been conducted since 1999. As a result, the war reserves did not contain enough track shoes, batteries, and tires to support U.S. forces during initial operations. Effective distribution relies on a seamless process to promptly move supplies from the United States to a customer. GAO found that conflicting doctrinal responsibilities for distribution management, improperly packed shipments, insufficient transportation personnel and equipment, and inadequate information systems prevented the timely availability of four of the items. While U.S. troops developed short-term solutions to manage item shortages during OIF, DoD and the services have begun to undertake systemic, long-term changes to fix the supply problems identified. The majority of the changes are focused on distribution, and not on the full gamut of systemic deficiencies GAO identified7.
Since the end of the Cold War, the Department of Defense has dramatically reduced its fighting forces and logistics infrastructure. The Department estimates it is spending about $59 billion a year on logistics support 1 programs to operate and sustain weapon systems, 2 but it reports that significant reductions can be achieved by adopting a variety of different logistics support practices. We reported in January 2001 that serious weaknesses persist throughout the Department's logistics activities and that it is unclear to what extent ongoing reengineering management improvement initiatives will overcome them. 3 The Department has taken a number of significant steps in recent years directed at improving its outdated and inefficient logistics processes. Specifically, the Office of the Secretary of Defense and each of the military services and appropriate Defense commands have established a number of significant logistics reengineering efforts. In addition, the Office of the Secretary of Defense developed the Fiscal Year 2000 Logistics Strategic Plan in August 1999, which outlines six overall objectives, a basic.
"DOD estimated that overall spending on logistics, including supply chain management, was more than $210 billion in fiscal year 2010. Because of long-standing weaknesses in supply chain management, GAO has designated DOD supply chain management as a high-risk area and identified three focus areas for improvement-requirements forecasting, asset visibility, and materiel distribution. GAO reviewed the extent to which DOD has developed and implemented (1) corrective action plans that address challenges in the three focus areas, (2) an effective program for monitoring and validating the effectiveness and sustainability of supply chain management corrective actions, and (3) an ability to demonstrate supply chain management progress. GAO prepared this report to assist Congress in its oversight of DOD's supply chain management. GAO reviewed strategic and improvement plans, reviewed documents detailing the performance management framework, and assessed performance measures. GAO recommends that DOD develop and implement corrective action plans and performance measures for asset visibility and materiel distribution and take steps to fully institute its performance management framework. DOD concurred or partially concurred with two recommendations and did not concur with four, citing ongoing initiatives and existing policy. GAO..."