This report analyzes the process DOD is using to determine depot maintenance repair strategies for its new weapon systems and major upgrades. DOD’s management policies and plans continue to evolve as it seeks to make greater use of private sector repair capabilities while responding to congressional direction. Greater Use Is Being Made of Private Sector Capabilities, but Some Major Decisions Are Still Pending

Survey results from 71 new and upgraded weapon systems showed that, consistent with DOD’s policy change, programs are deciding or leaning toward having the private sector perform most of the depot maintenance. As shown above, 33 of the 46 programs that have made firm source-of-repair decisions, or are strongly leaning toward either the public or private sector, have selected the private sector for most repairs. Several program officials told us that they were delaying final support decisions, in part, because of the uncertain status of DOD depot and core policies and what they viewed as the potential for changes to the legislative requirements relating to the workload mix between the public and private sectors. Past Plans Preferred Organic Performance

The data for the 71 new systems reflect a marked shift from past policies and practices, which generally preferred the public sector. Our review of programs where source-of-repair decisions have been made or where one source of support is favored showed that key factors were not always taken into account during the decision-making process or were not always consistently applied across programs. We found that cost analyses comparing public and private support options were not always done or were done inconsistently and that core capabilities were not often considered. Of these 14 programs, 12 (86 percent) intend to use the system’s prime contractor or the original equipment manufacturers as their sources of repair. Inadequate, Unclear, and Contradictory Guidance

DOD Regulation 5000.2-R provides the primary policy guidance on source-of-repair decisions. This official further stated that the provisions on public depot core capabilities and weapon system support plans contained in the 1998 Defense Authorization Act require that the department review and possibly revise policies and processes for making source-of-repair decisions based on consideration of the revised core language. For example, guidance places increased emphasis on keeping costs down, and it encourages programs to use long-term contractor support. For this report, we addressed (1) DOD’s policy and implementation plans for allocating depot-repair workloads for new and upgraded weapon systems between the public and private sectors and (2) the decision-making process it used to make source-of-repair decisions. Eighty-four of these programs were taken from DOD’s October 28, 1996, list of major defense acquisition programs and are generally the largest acquisition programs within DOD. 10, 1997).
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed: (1) the Department of Defense's (DOD) policy and implementation plans for allocating depot-repair workloads for new and upgraded weapon systems between the public and private sectors; and (2) the process it uses to make source-of-repair decisions.

What GAO Found

GAO noted that: (1) overall, its work shows that DOD is moving to greater reliance on the private sector for depot support of new weapon systems and major upgrades; (2) this condition reflects DOD's shift from past policies and practices, which generally preferred the public sector; (3) DOD officials say that DOD is doing this within the framework of existing legislative requirements, while seeking legislative changes that would allow it to make greater use of the private sector; (4) GAO found that, in those programs where source-of-repair decisions have been made or where a specific source of repair is being strongly favored, these determinations were not always well supported; (5) further, weaknesses existed in guidance for implementing the decisionmaking process; (6) of 71 new system acquisition programs reviewed, 46 programs have made a source-of-repair decision or are strongly leaning toward one sector or the other; (7) of the 46 programs, 33 are selecting the private sector for most repairs and 13 are selecting the public sector; (8) the other programs reviewed have either selected a mixed workload utilizing both public and private sectors or are undecided; (9) uncertainty and unresolved issues related to DOD policy guidance, core capabilities, and DOD's belief there may be changes in legislation relating to depot workload allocation have caused several of the large acquisition programs to defer long-term support decisions; (10) in lieu of making a decision, these programs were opting for some type of interim contractor support arrangement that places initial support responsibilities with the original equipment manufacturers; (11) significant weaknesses exist in DOD's implementation of the decisionmaking process for determining depot maintenance strategies for new systems; (12) GAO's review of programs where source-of-repair decisions have been made showed that key factors were not always taken into account during the decision process nor, when they were, were they always consistently applied across programs; (13) for example, cost comparisons between public and private support options were not always done as required or were inconclusive; (14) inconsistencies in the decisionmaking process are partly attributable to changing and contradictory guidance for making source-of-repair decisions and uncertainties regarding public depot core capability requirements; and (15) DOD revised its primary guidance in October 1997 and continues to examine other possible changes.