Search

The Department of Defense's (DOD) annual appropriation totals billions of dollars for spare parts. In addition, it has received supplemental funding totaling $1.5 billion since fiscal year 1999 to increase the availability of spare parts. However, DOD continues to experience critical spare parts shortages that impact military readiness. GAO examined whether (1) DOD's logistics strategic plan addresses the mitigation of critical spare parts shortages that adversely affect readiness, (2) DOD's logistics initiatives are likely to mitigate spare parts shortages that affect readiness, and (3) DOD has the ability to identify the effect of increased investments for spare parts on readiness. The Office of the Secretary of Defense's (OSD) logistics strategic plan focuses on transforming the department's logistics operations by emphasizing weapon system support, customer service, and enterprise integration, but does not specifically address mitigating spare parts shortages. In addition, while it contains some key attributes of a strategic plan, such as broad goals and implementation strategies, it lacks other key attributes. In June 2002, the department published the Future Logistics Enterprise, which serves as the strategic plan behind efforts to transform logistics operations within the department to ensure consistent, reliable support that meets the warfighters' requirements. This plan presents its vision for accelerating logistics improvement, enhancing support to the warfighter and aligning logistics processes with the operational demands of the 21st Century. While the Future Logistics Enterprise plan identifies six departmentwide initiatives under three broad topical areas to improve weapon system availability, none of the initiatives specifically address mitigating critical spare parts shortages. However, DOD has directed a separate Defense Logistics Agency effort to improve the availability of critical aviation spare parts. Under the three topics of weapon system support, customer service, and enterprise integration, OSD's six agencywide initiatives aim to improve supply operations and readiness. In fact, two--Condition Based Maintenance Plus and Total Life Cycle System Management--pecifically identify improving readiness as an objective. For example, the Condition Based Maintenance Plus initiative is designed to improve maintenance capabilities and business processes that could increase operational availability and readiness throughout the life cycle of the department's weapon systems. If successfully implemented, this initiative would improve maintenance operations and might affect spare parts shortages, but it does not have goals and performance measures related to mitigating spare parts shortages. As a result, DOD may not know whether it is investing its resources in the most efficient and effective manner. Recent OSD efforts to link funding to readiness could enhance its ability to identify the affect of funding for critical spare parts on readiness. In an August 2002 study report, the DOD Comptroller identified the value of investing in critical parts that adversely affect readiness and recommended the Defense Logistics Agency and the services link budget requests to weapon system readiness rates. The Comptroller's recommendations stemmed from concern that the Defense Logistics Agency and the services' inventory systems tend to purchase low-cost/high-demand items and not those that would most improve readiness rates. While citing some improvement, the Comptroller made eight recommendations, four of which were specifically aimed at improving efforts to increase investment in critical spare parts and link funding requests to readiness rates. In addition, the Comptroller changed the budget justification document (budget exhibit) to provide such information to Congress. [ABSTRACT FROM AUTHOR]

Despite reporting $10.5 billion in appropriations spent on spare parts since fiscal year 2000, the Air Force continues to report shortages of spare parts. The service has taken numerous actions to address these shortages. GAO examined whether the Air Force's strategic plan addresses the mitigation of spare parts shortages, whether key initiatives are likely to mitigate the shortages, and the impact on readiness identified from increased investments for spare parts. The Air Force Strategic Plan generally provides an appropriate framework for mitigating spare parts shortages. However, one of two subordinate plans does not contain performance measures and targets linked to the strategic plan, and the other does not contain any performance targets. Therefore, the Air Force is not in a position to determine if the actions taken pursuant to its subordinate plans overcome spare parts shortages and provide assurance that it is getting the greatest readiness return on its spare parts investment. Key logistics initiatives under the Spares Campaign and Depot Maintenance Reengineering and Transformation (DMRT) efforts may help to mitigate spare parts shortages, but the initiatives' potential effectiveness is limited because of some key problems. First, the Air Force is not starting all identified initiatives that relate to the causes of shortages because it did not have needed personnel and funding. It assessed its logistics processes and identified more than 80 initiatives to solve more than 300 deficiencies; 43 initiatives were to improve processes that affect spare parts shortages, with about half relating to depot maintenance and the other half to supply. Although all depot maintenance-related initiatives have been started, 12 of the supply related initiatives have not been started. Second, 23 of the 31 initiatives lack both output-related performance measures and targets. Without output-related measures and targets to assess the initiatives' impact, the Air Force has little means of determining the extent to which it has successfully mitigated spare parts shortages and improved readiness. Third, the Air Force chose not to use the results of one of its initiatives, which identified a new total spares requirement as the basis for its fiscal year 2004 budget request. This decision resulted in a $578 million unfunded spare parts requirement. Finally, management problems--including failure to articulate the need for change, a lack of top-level commitment, and failure to address organizational issues--have hampered implementation of the initiatives. In February 2003, the Air Force established the Innovation and Transformation Directorate to address these problems, but its plans and priorities have not been set. The Air Force can estimate the impact of increased funding on individual weapon systems' supply availability and has done so. Based on its approximately $5.3 billion fiscal year 2004 spare parts budget request, the Air Force reported that aircraft supply availability would range from 73 to 100 percent. However, it cautioned that higher supply availability does not automatically result in higher mission capable rates because of other factors. [ABSTRACT FROM AUTHOR]

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. 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. [ABSTRACT FROM AUTHOR]

The armed services have significantly reduced their procurement of new weapons systems and are keeping their existing systems longer than originally anticipated. The Department of Defense (DOD) estimates that it is spending $59 billion a year on logistics support to operate and sustain weapons systems, but DOD believes that better logistics support practices could reduce these costs by as much as 20 percent. To cut costs and improve efficiency, the military services have begun implementing logistics support strategies that rely on the private sector. DOD Regulation 5000.2-R expresses a preference for using long-term contractor logistics support but requires that an analysis be done first to determine how logistics support work is to be allocated to public or private entities. It is impossible to determine whether initial cost-effectiveness estimates for proposed contractor-logistics-support approaches are being achieved because the Army and Navy lack the required data. Consequently, the services may be adopting support approaches without knowing whether expected readiness improvements and cost-reduction goals are being met, where adjustments are needed, or the conditions under which the various support approaches are likely to achieve the most cost-effective results. Comparisons of the same or similar work done by military and private facilities are not possible or were inconclusive in determining which is more cost-effective. No comparisons were possible for the Army because, as a matter of policy, it does not divide its depot-level maintenance work for the same items between Army and contractor facilities. Only four comparisons of aircraft systems were possible in the Navy, and these showed mixed results. Although contractors have provided some logistics support needs, major Army and Navy commands have concerns about widespread contractor logistics support. However, the DOD's and the services' actions so far do not fully address these concerns, or the issues have not been fully resolved. [ABSTRACT FROM AUTHOR]

Military logistics is an important and expensive job. The Defense Department (DOD) will spend about $84 billion out of its $280-billion budget on logistics support this year. Even so, failing equipment and parts shortages continue to be a problem. DOD has taken steps to reengineer its logistics process, but many aspects of its overall plan are incomplete, raising questions about whether or when the goals of better service and lower costs will be realized. It is too early to assess the impact that reengineering logistics support will have on combat forces. Officials representing combat forces have raised several concerns, including the effect of having large numbers of private contractors on or near the battlefield, the ability of contractors to meet the surge requirements, and the effects of contracting on the number of jobs available to military personnel returning to the United States from overseas duty. Several factors, if not addressed, could limit DOD's ability to achieve its reengineering goals. These factors include the impact that use of sole-source, long-term contracts would have on anticipated reengineering savings and the effects that existing laws and policies would have on the implementation of reengineering initiatives. GAO summarized this report in testimony before Congress; see: Defense Logistics: Integrated Plans and Improved Implementation Needed to Enhance Engineering Efforts, by David R. Warren, Director of Defense Management Issues, before the Subcommittee on Military Readiness, House Committee on Armed Services. GAO/T-NSIAD-00-206, June 27 (nine pages). [ABSTRACT FROM AUTHOR]

Enemy sea mines were responsible for 14 of the 18 Navy ships destroyed or damaged since 1950, and producing countries have developed mines that are even more difficult to detect and neutralize. After the Persian Gulf War, during which two Navy ships were severely damaged by sea mines, the Navy began to take steps to improve its mine warfare capabilities. This report (1) discusses the Navy's plans for improving mine countermeasures capabilities; (2) provides information on the status of current research, development, test, and evaluation programs; and (3) evaluates the process that the Defense Department used to prepare the annual certification required by law. [ABSTRACT FROM AUTHOR]