According to department officials, the  department did not address two of the elements because changes to its  guidance and processes for developing the 2018 report resulted in the  2016 and 2018 reports not being directly comparable. DOD officials  stated that they plan to address these two elements in the 2020 Biennial  Core Report. Specifically:  Army: The Army reported a total projected shortfall of about 2.9 million  direct labor hours, as shown in table 3. The Army cited newly established software depot maintenance  requirements as one of the reasons for its shortfall. Specifically, the Army is currently working to move  software-related direct labor hours from contractor to military sources,  which will help the Army mitigate—that is, shrink—its projected shortfall  by fiscal year 2020. The Army reported that it plans to mitigate many of its  projected core shortfalls by using skill sets similar to those required for maintaining a core capability in repairing equipment for foreign militaries. As a result,  the Navy did not report any software core capability requirement or  projected workload for fiscal year 2019. The Marine Corps identified a  rationale and mitigation plan for its projected shortfall in construction  equipment. According to Air Force officials, the electronics on these two types of  missiles are very similar and require the same skill set. DOD Did Not Address the Two Elements Concerning Progress in Implementing Mitigation Plans and Executing Reported Workloads

DOD in the 2018 Biennial Core Report did not address progress made in  implementing mitigation plans from the prior core report (element 6), nor  did they address the degree to which projected workload reported in the  prior core report was executed (element 10). DOD’s 2018 Biennial Core Report Is Generally Complete

DOD’s 2018 Biennial Core Report is generally complete in that it lacks  any obvious errors and aligns with supporting information provided by the  military services. DOD’s focused efforts in 2017 and 2018 to develop better guidance and  procedures assisted in improving the completeness of DOD’s 2018  Biennial Core Report—in part, according to DOD officials, due to our prior  recommendations. Officials told us that our prior recommendations, based on our reviews of  the 2012, 2014, and 2016 biennial core reports, served to guide DOD’s  update of its guidance and procedures. According to OSD officials, changes to the  guidance included deleting data fields unrelated to core requirements;  streamlining and clarifying reporting instructions; ensuring that service  submissions be reviewed and approved by general, flag, or senior  executive service officials; determining the weapon systems or other platforms that are in the Chairman of the Joint Chiefs of Staff strategic  and contingency plans; addressing inter-service workloads; having the  worksheet automatically calculate shortfalls; and defining “software” and  “software maintenance.”
Most recently, in our review of the 2016 Biennial Core Report, we found  (1) data errors; (2) inconsistent capture of inter-service workloads across  the military services; (3) inconsistent calculations or transpositions of  projected workload shortfalls across the military services; and (4)  inconsistent calculations of the estimated cost of projected workloads  across the military services. While section 2464 has been amended multiple times since  then, the requirement for DOD to maintain a core logistics capability that  is government-owned and government-operated has persisted. In 2011  Congress added a requirement for DOD to provide a biennial core report. Appendix III: Scope and Methodology

Section 2464(d) of Title 10 of the United States Code requires the  Department of Defense (DOD), among other things, to submit to  Congress a biennial report providing information on its core depot-level  maintenance and repair capability requirements and workload. Section 2464 also requires us to review DOD’s report for  compliance with section 2464 and assess the completeness of the  report. To determine the extent to which the DOD 2018 Biennial Core Report  complies with section 2464(d), we analyzed the text of the report and  obtained supporting information on DOD’s process to determine its core  maintenance capability for fiscal year 2019.
Why GAO Did This Study

DOD uses both military depots and contractors to maintain its complex weapon systems and equipment. Recognizing the depots' key role and the risk of overreliance on contractors, section 2464 of title 10 of the U.S. Code requires DOD to maintain a core logistics capability that is government-owned and operated, involving a combination of personnel, facilities, equipment, processes, and technology. Section 2464 requires DOD to provide a Biennial Core Report to Congress that addresses 10 reporting elements, including information on its core capability requirements and projected workload for the next fiscal year.
Section 2464 includes a provision that GAO review DOD's Biennial Core Reports for compliance and completeness. In reviewing the 2018 Biennial Core Report, GAO assessed the extent to which DOD's report (1) addressed the 10 reporting elements required by section 2464(d), and (2) is complete. GAO reviewed and analyzed relevant legislation, DOD guidance, and the 2018 Biennial Core Report, and met with DOD and military service officials to discuss the processes used to develop the information in DOD's 2018 Biennial Core Report.

What GAO Found

In its 2018 Biennial Core Report, the Department of Defense (DOD) addressed 8 of 10 reporting elements. Specifically, DOD reported, by military service, its:
depot maintenance workload required to sustain core maintenance capability requirements, based on contingency planning scenarios;
projected fiscal year 2019 depot maintenance workloads; and
projected fiscal year 2019 shortfalls (i.e., insufficient workload to sustain the required level of capability) and rationales and mitigations for those shortfalls.
The Army reported a projected workload for fiscal year 2019 that would meet about 84 percent of its identified core capability—a shortfall of 2.9 million direct labor hours (see figure). The Army identified numerous reasons—such as newly established software depot maintenance requirements—for its shortfalls. Furthermore, the Army presented mitigation plans for its shortfalls, such as moving software-related work from contractor to military sources.
The other services did not report overall shortfalls, but some services reported shortfalls associated with specific types of work. For example, the Air Force reported a shortage associated with the repair of tactical missiles. As a mitigation plan, the Air Force stated that it plans to use workload associated with repairing strategic missiles to maintain this capability, since the electronics on the two types of missiles are very similar and require the same maintenance skill set.
DOD did not address two required reporting elements—progress in implementing mitigation plans from the 2016 biennial core report, and the degree to which projected workload reported in the 2016 biennial core report was executed. According to DOD officials, changes in its guidance and processes for developing the 2018 report resulted in the 2016 and 2018 reports not being directly comparable. However, DOD officials stated that they plan to address these two elements in the 2020 Biennial Core Report.
DOD's 2018 Biennial Core Report is generally complete, in that it lacks obvious errors and aligns with supporting information provided by the services. DOD's concerted efforts to implement better guidance and procedures—in part, according to DOD officials, by implementing GAO's prior recommendations from 2012, 2014, and 2016—assisted in improving the completeness of the report.