Various statutes affect the mix of depot maintenance workload between the public and private sectors. The DOD report, Policy Regarding Performance of Depot-Level Maintenance and Repair, was submitted to your committees on April 4, 1996. The policy does not address how DOD intends to further downsize its depot maintenance capacity and improve the efficiency and cost-effectiveness of remaining DOD depot maintenance infrastructure. DOD Policy Is Inconsistent With Congressional Guidance With Respect to Competing Noncore Workloads Maintained in DOD Depots

Section 311(d)(5) of the act provides that for depot maintenance workloads in excess of that required to be performed by DOD depots,  (i.e., noncore workloads), DOD’s policy should provide for competition “between public and private entities when there is sufficient potential for realizing cost savings based upon adequate private-sector competition and technical capabilities.” DOD’s policy is inconsistent with this instruction. Under this policy, DOD depots would be used sparingly for public-private competitions and DOD depots cannot compete for all noncore workloads where “adequate private sector competition” exists, even though they may offer the most cost-effective source of repair.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) policy regarding depot-level maintenance and repair, focusing on the: (1) future role of defense depots; and (2) inconsistency of DOD policy with current statutes and congressional directives.

What GAO Found

GAO found that: (1) the DOD depot maintenance policy calls for a greater mix of public and private-sector maintenance capabilities; (2) DOD will likely rely more on private-sector depots given the uncertainty of future workload assignments; (3) the policy is vague and offers no guidance as to how DOD should downsize its depot maintenance capacity; (4) the policy ignores congressional directives calling for competition between public and private-sector entities for non-core maintenance work; (5) under this policy, DOD depots would not be allowed to compete for non-core workloads even if they offer the most cost-effective source of repair; and (6) DOD needs to develop a system that allows excess capacity reduction and vigorous public-private competition between DOD depots and commercial firms.