2466—the 60/40 rule, its effects on readiness and national security, and a description of specific difficulties experienced by DOD as a result of that requirement; (2) an analysis of the public-private distribution of depot maintenance and repair workloads for fiscal years 1991 through 1995; and (3) a projection of the public-private workload distribution for fiscal years 1997 through 2001. Current Depot Maintenance Market Is Not Highly Competitive

Although DOD’s workload distribution report stated that privatization would lower depot maintenance costs, DOD offered no documentation to show that its plans to rapidly increase the private sector’s share of depot maintenance workload will be cost-effective. Reported Historical Workloads Could Be More Comprehensive

Section 311 did not provide specific guidance on data to be included in the workload reports. This data collection included the value of parts and services the depots purchase from the private sector as public sector costs. Reporting workload in direct labor hours would provide a more accurate picture of workload mix in that it would address the repair parts problem. However, DOD’s report did not include such data. Data Reported in Historical Workloads Excluded From Future Projections

Like the historical data provided for fiscal years 1991 through 1995, the future workload projections for fiscal years 1997 through 2001 also overstate the public sector’s share by the treatment of funding for repair parts and subcontracts to the private sector and understate the private sector’s share by including the funding of government-furnished material in the public sector’s share and by not including in the private sector share the costs of contract depot maintenance for some classified systems and the cost of contracts awarded by DOD depots for maintenance and repair services. However, when we adjusted the data to make it comparable, the historical and future data are relatively consistent. Matters for Congressional Consideration

More comprehensive and consistent workload data would improve congressional oversight of the allocation of workload between the public and private sectors.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) "Depot Maintenance and Repair Workload" report, focusing on: (1) the effect of the legislative requirement concerning the allocation of depot maintenance workloads between the public and private sectors; (2) historical public and private sector depot maintenance workload allocations; and (3) projected public and private depot maintenance workload allocations for fiscal years 1997 through 2001.

What GAO Found

GAO found that: (1) DOD generally complied with the section 311 requirements regarding workload data, except that it did not provide direct labor hour data as required by Congress; (2) DOD stated that it does not collect labor hour statistics from private contractors, but GAO's analysis of DOD's workload report shows that the use of more comprehensive and consistent data would provide Congress and DOD decisionmakers a more accurate picture of historical and future projections of depot maintenance workload allocations between the public and private sectors; (3) without such data, the reports are of limited use to Congress and defense decisionmakers when considering public and private sector workload allocation policy; (4) the 60/40 rule has not adversely affected military readiness; (5) the historical public-private depot workload data for fiscal years 1991 to 1995 presented in the workload distribution report includes in the public sector workload share, the value of repair parts and services they purchase from the private sector, but some of these parts are furnished to the private sector as government-furnished material; and (6) the report's projections of public-private depot workloads for fiscal years 1997 to 2001 are not consistent and comparable to historical data.