A first-level category summarizes  information for an entire type of system or equipment, such as aircraft or  ground vehicles. A first-level category can be broken down into second-level  subcategories, which are the major elements that make up the system or  equipment in the first-level category. DOD’s 2012 Biennial Core Report Partially Complies with Section 2464 and Includes Information for Each of the Military Services

DOD’s 2012 Biennial Core Report to Congress complies with two of the  required reporting elements of Section 2464—including core capability  requirements and planned workload—and partially complies with the third  element by including mitigation plans, but not all detailed rationales for   workload shortfalls. In the report, OSD  included complete information on the amount of planned workload that is  available to maintain the required capability, expressed in direct labor  hours at the top-level categories and the estimated cost of these  workloads for each of the military services. As reported, DOD has a total  planned workload of about 92 million direct labor hours at an estimated  cost of about $12 billion. The Report Includes Information on Shortfalls and Mitigation Plans but Does Not Include Detailed Explanations for Some Shortfalls

While DOD’s overall planned workloads exceed its core capability  requirements, DOD’s report shows shortfalls in certain categories for the  Army and the Air Force. However, the report does not include  required information on the rationale for some of these shortfalls—the  reasons why the services do not have the workloads to meet core  maintenance requirements. Section 2464 requires that DOD include in its  report “in any case where core depot-level maintenance and repair  capability requirements exceed or are expected to exceed sustaining  workloads,”—that is, in any case where there are shortfalls—“a detailed  rationale for the shortfall and a plan either to correct, or mitigate, the  effects of the shortfall.”
Consistent with how it reported the core requirements and planned  workloads, OSD aggregated the workload shortfalls under the top-level  categories of the work breakdown structure for each service. The report  shows that the Navy and Marine Corps did not identify any shortfalls in  the workloads available to support their core capability requirements. The  report shows workload shortfalls for the Army and Air Force totaling about  1.4 million direct labor hours. For the report, OSD aggregated the information on core  requirements and planned workloads provided by the services at the top- level categories of the work breakdown structure. The report provides mitigation plans for identified shortfalls in the Air  Force core capabilities but does not provide explanations for all of the  shortfalls. The report does not always include detailed explanations for identified  workload shortfalls, because the Army and Air Force did not always  provide explanations for them. Without clear explanations for why the  services do not have the workload to meet core maintenance  requirements, Congress does not have visibility whether the services’  plans to correct or mitigate the shortfalls will address the cause of the  shortfalls. Conclusions

Section 2464, among other things, requires DOD to maintain a core  maintenance capability that is government-owned and government- operated, assign sufficient workload to support this capability, and report  information on this capability to Congress. GAO staff who made key contributions to this report  are listed in appendix V.

Appendix I: Scope and Methodology

To determine the extent to which the Department of Defense’s (DOD)  2012 Biennial Core Report complies with Section 2464 of Title 10 of the  United States Code and includes service data and information required by  DOD to support the report, we analyzed the text of DOD’s Biennial Core  Report and obtained supporting information on DOD’s core determination  process for 2013.
Why GAO Did This Study

DOD uses both military depots and contractors to maintain many complex weapon systems and equipment. Recognizing the key role of the depots and the risk of overreliance on contractors, Section 2464 of Title 10 of the U.S. Code requires DOD to maintain a core maintenance capability--a combination of personnel, facilities, equipment, processes, and technology (expressed in direct labor hours) that is government-owned and government-operated--needed to meet contingency and emergency requirements. Section 2464 directs DOD to provide a Biennial Core Report to Congress and include three elements: (1) core capability requirements, (2) planned workloads, and (3) explanations and mitigation plans for any shortfalls between core capability requirements and planned workloads. In response to a requirement in Section 2464, GAO assessed the extent to which the report complied with the statute and included supporting information from the services as required by DOD. GAO reviewed relevant legislation, DOD's 2012 Biennial Core Report, the services' submissions to support the report, and related DOD guidance.

What GAO Found

The Department of Defense's (DOD) 2012 Biennial Core Report complies with two of the three biennial reporting elements of Section 2464 by including information on core capability requirements and planned workloads available for maintaining these requirements. The Office of the Secretary of Defense (OSD) reported core capability requirements totaling about 70 million direct labor hours for the military services. Also, OSD reported a total of about 92 million direct labor hours for planned workloads with an estimated cost of about $12 billion. OSD reported complete information on core requirements and planned workload at the top-level categories, such as Sea Ships, of the work breakdown structure. The statute directs that this information be organized by work breakdown structure, which is a group of categories of equipment and technologies. The top-level category--an entire type of system or equipment--can be broken down into lower levels of detail or subcategories, such as Aircraft Carriers or Submarines, that make up the system or equipment. DOD's overall planned workloads exceed its core capability requirements, but the report shows shortfalls in certain categories for the Army and the Air Force.
The report partially complies with the third biennial reporting element. DOD's report includes information on shortfalls at the top-level categories and plans to mitigate all shortfalls--where requirements exceed planned workload--identified in the report. However, the report does not include required information on the rationale for some of these shortfalls--reasons why the services do not have the workload to meet core requirements. The Navy and Marine Corps did not identify any shortfalls and were not required to provide explanations or mitigation plans. The report includes mitigation plans for shortfalls identified by the Army and the Air Force but does not always provide detailed explanations for why the Army and Air Force do not have sufficient planned workload to meet core requirements. The report does not always include detailed explanations for identified workload shortfalls, because the Army and Air Force did not always provide explanations for them. Without reporting clear explanations for why the services have shortfalls, Congress does not have visibility on whether the services' plans to correct or mitigate the shortfalls will address the cause of the shortfalls.

What GAO Recommends

GAO recommends that DOD improve its Biennial Core Report by including detailed explanations of why the services do not have the workload to meet core maintenance requirements for each identified shortfall. In written comments on a draft of the report, DOD concurred with the recommendation.