Growing Number of Partnerships Involve a Relatively Small Portion of Depot Workload

DOD’s public-private partnerships for depot maintenance increased from  19 to 93 from fiscal year 1998 through fiscal year 2002 and involved  2.2 percent of DOD’s total depot maintenance program expenditures in  fiscal year 2002. Of the  90 partnerships we reviewed, 28 either improved some aspects of repair  performance or showed potential for doing so. On  the other hand, 19 partnerships thus far have generated no work for  the depots. Characteristics for Effective Partnerships Identified, but DOD Is Limited in Its Ability to Measure Partnerships’ Overall Success

DOD and contractor officials have identified 14 characteristics that they  believe over time will contribute to a partnership’s success in achieving  DOD’s objective of improved depot efficiency and viability, but DOD has  not developed sufficient data and goals for assessing its partnering  initiative. However, DOD’s ability to measure the partnerships’ overall  success is limited because it has not yet developed baseline data and  measurable goals for assessing the outcomes of its partnering efforts and  the metrics that it has developed sometimes will not provide the clear data  needed to fully assess the partnerships. Several Factors Could Affect DOD’s Planned Partnership Expansion

While DOD plans to expand its use of public-private partnerships to  improve the efficiency and viability of its depots, several factors could  affect the department’s expansion efforts. Partnering Opportunities May Be Limited by External Factors

The opportunities available for DOD to expand its use of public-private  partnerships may be limited by external factors that the services cannot  replicate or create at will. Although DOD expects private-sector partners to contribute to developing  these capabilities, the extent to which the private sector will make such  investments is uncertain. Our work found that these provisions have fostered the use of  partnerships. Conclusion

Even with the significant increase in the number of DOD’s public-private  partnerships from fiscal year 1998 through fiscal year 2002, the existing  partnerships represent only 2.2 percent of DOD’s $19 billion depot  maintenance program. Without initially establishing both clear and  measurable goals to define success in improving the efficiency and viability  of its depots and the metrics that provide the relevant data for the  measurement, DOD has limited objective means to assess whether the  partnerships are working as intended. Furthermore, while DOD is  expecting private-sector investment in public depots to support the  creation of capability to support new systems the extent to which this  investment is likely to occur is uncertain. 6.
Why GAO Did This Study

For several years, the Department of Defense (DOD) and the Congress have encouraged the defense logistics support community to pursue partnerships with the private sector to combine the best commercial processes and practices with DOD's extensive maintenance capabilities. In January 2002, DOD issued policy encouraging the use of public-private depot maintenance partnerships to improve the efficiency and viability of its depots. GAO reviewed these partnerships and assessed the extent that DOD is participating in these partnerships, the characteristics needed to achieve effective partnerships and where DOD is in its ability to measure success, and the management challenges to DOD's planned expansion of partnerships.

What GAO Found

While the number of public-private partnerships that DOD is participating in has increased from 19 to 93 from fiscal year 1998 through fiscal year 2002, the existing partnerships represented only 2 percent of DOD's fiscal year 2002 $19 billion depot maintenance program. Even with the small amount of expenditures and workload associated with partnerships, some partnerships that GAO reviewed either improved some aspects of repair performance or showed potential for doing so. On the other hand, 19 partnerships have generated no work thus far. DOD and contractor officials have identified 14 characteristics that they believe over time will contribute to a partnership's success in achieving DOD's objective of improved depot efficiency and viability. However, DOD has a limited ability to measure the overall success of its partnering efforts because it has not yet developed measurable goals for the expected outcomes of the effort and the metrics that it has developed sometimes will not provide the data needed to fully assess the partnerships. Without initially establishing clear, measurable goals to define success in improving the efficiency and viability of its depots and metrics that provide the relevant data for the measurement, DOD has limited objective means to assess whether the partnerships are working as intended. Furthermore, DOD faces challenges in its efforts to expand its use of public-private partnerships. For example, opportunities available for DOD to expand its use of these partnerships may be limited by external factors that the services cannot replicate or create at will, such as one-time business opportunities. Also, while DOD is expecting private sector funding to support the establishment of capability for depot partnerships for new systems, the amount of private-sector investment to date is only $6.9 million, and the extent to which the private-sector will make additional investments is uncertain.