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GAO-01-533T Defense Maintenance: Sustaining Readiness Support Capabilities Requires a Comprehensive Plan
In addition to the end of the Cold War and the resulting military force structure downsizing, three events have shaped the depot maintenance environment. First, the base realignment and closure process has reduced DOD's Cold War era infrastructure from 38 military depots to 19. Second, as recommended in various studies, DOD has increasingly relied on defense contractors for depot maintenance and related logistics activities. Third, depot maintenance personnel have been cut by 59 percent, the third highest percent of any category of DOD personnel. DOD has not effectively managed the restructuring of its depot maintenance and related programs. In its earlier and ongoing reviews of defense maintenance and related logistics issues, GAO has identified several management weaknesses in the areas of policy, planning, recapitalization, human capital issues, financial management, performance of maintenance programs, and meeting legislative requirements. As GAO's recent performance accountability report on defense issues notes, logistics activities represent a key management challenge. Maintenance is an important part of those activities, and DOD is at a critical point with respect to the future of its maintenance programs that is linked to its overall logistics strategic plan.
The U.S. government mandates that all Department of Defense logistic-wide initiatives adopt commercially proven practices and strategies to undergo maintenance, repair and overhaul (MRO) transformations. Reasons for the drastic order include aging weapons systems, an aging workforce, limited financial resources, and new technologies, just to name
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.
Section 2466 of title 10, U.S. Code, stipulates that not more than 50 percent of annual depot maintenance funding provided to the military departments and defense agencies can be used for work accomplished by private sector contractors. It also provides that the Secretary of a military department may waive the 50-50 requirement if the Secretary determines a waiver is necessary for reasons of national security and notifies Congress regarding the reasons for the waiver. Further, section 2466 provides that the Department of Defense (DOD) shall submit two reports on public- and private-sector depot maintenance workloads to the Congress every year. The first report is to provide the percentages of funds expended in the public and private sectors during the 2 preceding fiscal years (the prior-years report), and the second report is to project this same information for the current and 4 succeeding fiscal years (the future-years report). For 2001, the prior-years report was issued on February 1, 2001, and the future-years report on April 1, 2001.