	Background

Although there is no generally agreed upon definition of partnering, for purposes of this report, partnering arrangements include, but are not limited to (1) use of public sector facilities and employees to perform work or produce goods for the private sector; (2) private sector use of public depot equipment and facilities to perform work for either the public or private sector; and (3) work-sharing arrangements, using both public and private sector facilities and/or employees. In the Quadrennial Defense Review, DOD states that it will use in-house facilities to partner with industry to preserve depot-level skills and use excess capacity. Statutory Authority Exists Under Which Partnering Can Occur

A number of statutory provisions enacted primarily during the 1990s provide, within limitations, the authority and framework for partnering. Central among these limitations is that any goods or services sold by the depots must not be available commercially. The Army has entered into partnering arrangements under the legislation covering sales of goods and services. The Army has designated which depots may sell articles and service outside of DOD and has issued specific implementing guidance. The Secretary of Defense has delegated to the Secretary of the Air Force the authority to designate which depots may sell articles and services outside of DOD. However, the Air Force Secretary has not made any such designations nor developed criteria to determine whether a good or service is available from a domestic commercial source. Air Force officials state that 10 U.S.C. 4543 and subcontracting under  10 U.S.C. Under this partnering arrangement, United Defense Limited Partnership contracted with the depot to perform grit blasting on the vehicle hulls and the depot provided use of its test track facilities pursuant to a subcontract with the contractor under  10 U.S.C. None of the Army’s partnering arrangements reviewed included the leasing of excess or nonexcess depot equipment or facilities as permitted under sections 2471 and 2667 of title 10. In April 1997, AFMC denied the request because it believed that it did not have the authority to enter into such a partnering arrangement since the Secretary of the Air Force had not designated any depots to enter into such arrangements nor issued implementing guidance to use in determining commercial availability. A legal framework and the authority to enter into partnering arrangements exist in title 10. The Air Force, on the other hand, has not initiated any partnering arrangements, citing the lack of a designation from the Secretary of the Air Force identifying which logistics centers may use the sales statutes and the legislative requirement that the good or service provided by the depot not be commercially available. We surveyed the services to determine what partnering arrangements were ongoing or had been proposed at their depots, and the services’ views of such arrangements. Additional copies are $2 each.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the use of partnering arrangements between the Department of Defense (DOD) and private-sector contractors to use excess capacity at military service repair depots, focusing on the: (1) legal framework under which partnering can occur; and (2) types of current partnering arrangements and the services' and industry's views of such arrangements.

What GAO Found

GAO noted that: (1) a number of statutory provisions enacted primarily during the 1990s provide, under certain conditions, the authority and framework for partnering arrangements; (2) various provisions of title 10 of the United States Code allow the services to sell articles and services outside DOD for limited purposes and under certain conditions; (3) the Army has this authority for many of its industrial facilities under section 4543 of title 10; (4) the Army controls the sales authority under this provision; (5) the authority for the remaining DOD industrial facilities, including those of the Air Force, is contained in 10 U.S.C. 2553; (6) it requires the Secretary of Defense to designate which facilities will have the authority to sell articles and services outside of DOD; (7) under both provisions, the goods or services sold must not be available commercially in the United States and providing these goods and services must not interfere with a facility's military mission; (8) due in part to these differing authorities, the extent to which the Army and the Air Force pursue partnering arrangements varies; (9) the Army has designated depots that may sell articles and services outside of DOD and has developed criteria for determining when such goods and services are not commercially available; (10) at the time of GAO's review the Army had established 13 partnering arrangements using both the sales statutes in title 10 and worksharing arrangements not requiring specific legislation; (11) Army and private-sector officials state that partnering has improved operational efficiencies at their respective facilities and that they are pursuing additional partnering opportunities; (12) the Secretary of Defense has delegated to the Secretary of the Air Force the authority to designate which facilities may sell articles and services outside of DOD; (13) however, the Air Force Secretary has not made any such designations nor developed criteria to determine whether a good or service is available from a domestic commercial source; (14) there have been several private-sector and depot proposals to enter into partnering arrangements but none have been approved; and (15) the Commander of the Air Force Materiel Command states that he is not opposed to partnering, but he is not willing to enter into such arrangements unless savings can be demonstrated.