oversight

Aircraft Maintenance: Air Force Transferred and Eliminated Tasks to Address Funding Shortfalls

Published by the Government Accountability Office on 1990-06-07.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                        AIRCRAFT
JllIlV     I!)!)0




                        MAINTENANCE
                        Air Force Transferred
                        and Eliminated Tasks
                        to Address Funding
                        Shortfalls

                                                 6i
                                        I
                                        141735
National Security and
International Affairs Division

R-239422

June 7,199O

The Honorable Earl Hutto
Chairman, Subcommittee on Readiness
Committee on Armed Services
House of Representatives

Dear Mr. Chairman:

This report responds to your request that we evaluate the Air Force’s efforts in fiscal years
1988 and 1989 to transfer aircraft maintenance tasks to the operating commands and
eliminate and defer other maintenance tasks to address funding shortfalls. It discusses the
effect of these actions on readiness, projected funding shortfalls, and aircraft depot
maintenance requirements.

As agreed with your office, unless you publicly announce its contents earlier, we plan no
further distribution of this report until 30 days after its issue date. At that time we will send
copies to interested parties and make copies available to others upon request.

Please contact me at (202) 275-4268 if you or your staff have any questions concerning the
report. Major contributors to this report are listed in appendix II.

Sincerely yours,




Nancy R. Kingsbury
Director
Air Force Issues
ECxecutiveSummary


                   In the budget request to the Congress in February 1988, the Air Force
Purpose            projected that total aircraft depot maintenance requirements exceeded
                   funding by $156 million and $241 million in fiscal years 1988 and 1989,
                   respectively. In response to these shortfalls, Air Force officials testified
                   in March 1988 that the operating commands were being asked to do
                   some depot work and that the Air Force Logistics Command was elimi-
                   nating and deferring other depot maintenance tasks.

                   The Chairman, Subcommittee on Readiness, House Committee on Armed
                   Services, requested that GAO review the transfer of maintenance tasks
                   from the depots to the operating commands and determine whether such
                   transfers duplicated depot activities, increased costs, and affected air-
                   craft readiness. GAO subsequently agreed to determine the significance
                   of the Logistics Command’s elimination and deferral of maintenance
                   requirements in offsetting funding shortfalls.


                   The Logistics Command is responsible for aircraft depot maintenance,
Background         which includes major aircraft overhauls, periodic inspections, and
                   installation of modifications. Aircraft depot maintenance is accom-
                   plished at the Air Logistics Centers, also known as depots, and contrac-
                   tor facilities. The operating commands, such as the Tactical Air
                   Command and the Military Airlift Command, also accomplish less com-
                   plex aircraft maintenance at bases using their own resources.


                   During fiscal years 1988 and 1989, some depot maintenance tasks were
Results in Brief   transferred from the Logistics Command to the operating commands.
                   GAO found that operating commands did not substantially duplicate cur-
                   rent depot activities or significantly increase maintenance costs. The
                   operating commands’ efforts helped maintain aircraft readiness by
                   allowing the Logistics Command to accomplish high-priority tasks. The
                   results achieved in fiscal years 1988 and 1989 indicate that accomplish-
                   ing some depot maintenance tasks at the operating bases is feasible,
                   cost-effective, and contributes to improved readiness.

                   Air Force actions to eliminate or defer overstated and low-priority depot
                   aircraft maintenance requirements did more to reduce the funding
                   shortfall than the work accomplished by the operating commands. Even
                   though a significant amount of work was eliminated and deferred, readi-
                   ness was maintained, aircraft were not grounded due to a failure to per-
                   form scheduled maintenance, and safety-related, essential work was
                   accomplished.


                   Page 2                               GAO/NSIAD-90-114   Aircraft   Depot Maintenance
                          Executive   Summary




                          Also, the severe funding shortfalls projected for fiscal years 1988 and
                          1989 did not occur. This results in questions about the validity of
                          requirements and projected shortfalls presented in budget submissions.
                          The Department of Defense and the Air Force have efforts underway to
                          improve requirements determinations and budget submissions to the
                          Congress.


Principal Findings

Depot Maintenance Tasks   Base maintenance personnel of the Tactical Air Command and the Mili-
Transferred               tary Airlift Command accomplished some maintenance and moderniza-
                          tion tasks during fiscal years 1988 and 1989 that had been planned to be
                          accomplished by the depots. Air Force officials could not identify and
                          quantify all the tasks because many were accomplished along with nor-
                          mal base maintenance and separate records were not always kept.
                          Available information and the officials’ estimates, however, indicate
                          that the tasks transferred in fiscal year 1988 were a relatively small
                          portion of the total depot work load and that the number of tasks
                          decreased in fiscal year 1989 and is expected to decline further in fiscal
                          year 1990.

                          The maintenance tasks accomplished by the operating commands did
                          not substantially duplicate depot activities. The Logistics Command and
                          the operating commands jointly identified tasks that could be accom-
                          plished at bases. In most cases, base personnel supplemented depot per-
                          sonnel or accomplished maintenance that the Logistics Command had
                          eliminated or deferred. For example, operating command personnel
                          installed modifications that the Logistics Command had decided to
                          delay, made inspections and repairs that had been eliminated from
                          depot scheduled maintenance, and assisted depot field teams in accom-
                          plishing other tasks.

                          Accomplishing tasks at operating bases instead of depots did not signifi-
                          cantly increase total maintenance costs and helped maintain aircraft
                          readiness. Air Force officials stated that the operating commands
                          absorbed the depot work loads without requiring additional base main-
                          tenance personnel, equipment, and facilities. Operating bases are staffed
                          to meet wartime requirements and can expand peacetime operations-
                          at least for a period of time- with existing resources. Air Force officials
                          stated that the logistics system has a substantial degree of “elasticity,”


                          Page 3                               GAO/NSIAD-90-114   Aircraft   Depot Maintenance
                          Eixecutlve   Summary




                          which gives the Air Force flexibility in coping with changes in funding
                          and work load. The officials added that accomplishing these necessary
                          tasks at operating bases helped maintain readiness by allowing the
                          Logistics Command to accomplish high-priority tasks.


Requirements Eliminated   Logistics Command officials eliminated or deferred maintenance
                          requirements that were not essential, safety related, or executable. For
or Deferred               example, from fiscal years 1988 and 1989 programs, the officials elimi-
                          nated inspections and paintings (except for severe corrosion control)
                          and deferred the installation of nonsafety-related modifications. The
                          officials also eliminated requirements that had been overstated in the
                          amended fiscal years 1988/1989 budget submission. The officials said
                          the budget included unexecutable items (tasks that could not be accom-
                          plished by the depots during the program year because of a lack of pro-
                          duction capacity, parts, personnel, or for reasons other than a lack of
                          funding), which overstated work that the depots could realistically
                          accomplish.

                          As a result of these actions, the Air Force significantly reduced aircraft
                          maintenance requirements from estimates in the February 1988
                          amended budget. For example, the fiscal year 1988 requirement of $789
                          million was reduced by $83 million to $706 million in June 1988 prima-
                          rily by eliminating unexecutable requirements. The requirement was
                          subsequently reduced by about $88 million by eliminating about $60
                          million and deferring about $28 million in specific maintenance tasks.


Funding Shortfalls        In its February 1988 amended budget request, the Air Force projected
                          aircraft depot maintenance funding shortfalls of $156 million in fiscal
Overstated                year 1988 and $241 million in fiscal year 1989. By the end of fiscal year
                          1988, funding shortfalls were substantially reduced to $28 million; fur-
                          thermore, for fiscal year 1989, funding shortfalls were reduced to zero.

                          During fiscal years 1988 and 1989, the Air Force maintained overall
                          readiness levels: mission capable rates (the percent of available aircraft
                          capable of performing their mission) remained high, and aircraft were
                          not grounded due to a failure to perform scheduled depot maintenance.
                          Air Force officials were generally satisfied with the level of depot main-
                          tenance support provided to aircraft systems and stated that high-prior-
                          ity, mission-essential, and safety-related tasks had been accomplished.




                          Page 4                               GAO/NSIAD-90-114   Aircraft   Depot Maintenance
      \
  I               Executive Snmmary




                  The Congress, in both fiscal years 1989 and 1990, appropriated addi-
                  tional funding for depot maintenance, some of which was used to elimi-
                  nate aircraft maintenance funding shortfalls. The severe shortfalls
                  projected for fiscal years 1988 and 1989 did not occur once officials
                  eliminated overstated and low-priority work. The Office of the Secre-
                  tary of Defense and the Air Force have efforts underway to improve
                  depot maintenance requirements determinations and budget
                  submissions.


                  GAO is not making recommendations in this report.
Recommendations

                  The Department of Defense agreed with GAO'S findings and stated it will
Agency Comments   continue to pursue and monitor efforts underway to improve depot
                  maintenance requirements determinations.




                  Page 6                             GAO/NSIAD-90.114AircmftDepotMaintenance
                                                                                               .

                                                                                                   5””
Contents


Executive Summary                                                                                          2

Chapter 1
Intr6duction          Air Force Aircraft Maintenance                                                       8
                      Determining Depot Requirements and Funding Requests                                  9
                      Projected Funding Shortfalls                                                        10
                      Objectives, Scope, and Methodology                                                  11

Chapter 2                                                                                                 13
Depot Work Load       Tasks Accomplished by Operating Commands
                      Effects of Transferred Work Loads
                                                                                                          13
                                                                                                          17
Transferred to        Conclusions                                                                         19
Operating Commands
Chapter 3                                                                                             20
Requirements for      Overstated Requirements in Amended Budget Eliminated                            20
                      AFLC Eliminated and Deferred Maintenance Tasks                                  21
Maintenance and       Shortfalls Significantly Reduced and Readiness                                  23
Modernization Tasks        Maintained
Reduced               Efforts to Improve Requirements Estimates and Budget                            25
                           Submissions
                      Conclusions                                                                     26

Appendixes            Appendix I: Comments From the Assistant Secretary of                            28
                          Defense for Production and Logistics
                      Appendix II: Major Contributors to This Report                                  29

Tables                Table 1.1: Projected Funding Shortfalls                                         10
                      Table 3.1: Eliminated and Deferred Requirements                                 22
                      Table 3.2: Funding Shortfalls                                                   24

                      Abbreviations

                      AFH       Air Force Base
                      AFLC      Air Force Logistics Command
                      ALC       Air Logistics Center
                      DOD       Department of Defense
                      GAO       General Accounting Office
                      MAC       Military Airlift Command
                      TAC       Tactical Air Command


                      Page 6                            GAO/NSIAD-SO-114   Aircraft   Depot Maintenance
Y




    Page 7   GAO/NSIAD-O-114   Aircraft   Depot Maintenance
                                                                                                                ,
Chapter 1

Introduction


                     The Air Force services and repairs its aircraft and equipment to main-
                     tain and improve its warfighting capability. Aircraft, weapon systems,
                     and equipment in the Air Force’s inventory require maintenance
                     throughout their useful life spans. Required maintenance ranges from
                     routine oil changes to inspections, calibrations, and component replace-
                     ment to modification or complete rebuild. The Air Force Logistics Com-
                     mand (AFIC) and the operating commands, which include the Tactical
                     Air Command (TAC), Military Airlift Command (MAC), and Strategic Air
                     Command, are jointly responsible for maintaining aircraft.


                     The AFLC is responsible for depot maintenance, which includes major air-
Air Force Aircraft   craft overhauls, modifications, and complete rebuilds of reparable parts
Maintenance          and end items. Depot maintenance is performed at AFLC’S Air Logistics
                     Centers (ALC), also referred to as depots; contractor facilities; or by spe-
                     cialized depot or contractor teams deployed to operational sites. Depot
                     tasks typically require more extensive shop facilities, equipment, and
                     personnel with more specialized skills than are available at operating
                     bases.

                     In fiscal years 1988 and 1989, depot maintenance for direct Air Force
                     funded aircraft, including aircraft of the TAC and the Strategic Air Com-
                     mand, was funded by the depot maintenance and modernization1 pro-
                     gram in the Air Force’s operation and maintenance appropriation. Most
                     depot maintenance costs for MAC aircraft are paid for by the Airlift Ser-
                     vice Industrial Fund, which is a revolving fund reimbursed by charges
                     for airlift services provided to Department of Defense (DOD)
                     organizations.

                     Operating commands are responsible for accomplishing maintenance at
                     air bases on assigned aircraft. Base maintenance includes inspecting and
                     servicing aircraft on the flightline, making structural repairs, and
                     repairing and replacing damaged or unserviceable parts and components
                     in shops at the main operating bases. Base maintenance is funded by the
                     operating commands’ own operation and maintenance resources.

                     Air Force regulations prescribe procedures and criteria for determining
                     the appropriate level to perform specific maintenance tasks. The Air
                     Force’s objective is to accomplish maintenance at the lowest level that is

                     ‘Modernization provides for the installation of equipment to improve aircraft or other equipment. At
                     DOD’s request, the Congress agreed to fund modernization from the procurement account beginning
                     in fiscal year 1990.



                     Page 8                                           GAO/NSIAD-90-114      Aircraft   Depot Maintenance
      .
  I
                    Chapter 1
                    Introductlan




                    consistent with economy, technical feasibility, and mission require-
                    ments. Repair level analyses, logistical support analyses, and cost stud-
                    ies are conducted during the design and acquisition of a weapon system
                    to determine the appropriate level of maintenance. Factors such as the
                    frequency and complexity of the repair process, the type or degree of
                    skill specialization required, the need for extensive and specialized facil-
                    ities and equipment, and related cost factors are considered in determin-
                    ing whether repair responsibility is assigned to bases or depots. The Air
                    Force seeks to develop the support system that promotes the highest
                    possible aircraft availability and ensures sustainability at a low life-
                    cycle expense. Regulations also prescribe processes for later changing
                    the level of maintenance based on operational experience and
                    conditions.


                    AU officials develop and manage the annual depot maintenance pro-
Determining Depot   gram for assigned aircraft. They identify the specific maintenance and
Requirements and    modernization tasks and the estimated hours required to accomplish the
Funding Requests    work. A typical program would include programmed depot maintenance,
                    which consists of predetermined, cyclical, scheduled maintenance and
                    modernization tasks; periodic inspections; painting; and installing modi-
                    fications to improve safety, performance, and operational capability. To
                    save money and time, the depot program may also include base-level
                    tasks negotiated between the ALC and operating command to be done
                    concurrently with programmed depot maintenance. ALC and AFU man-
                    agement review boards review, revise, and approve the annual depot
                    maintenance requirements, and, after further budget reviews, these
                    requirements are submitted in the President’s budget.

                    Determining, validating, and executing requirements is a lengthy pro-
                    cess subject to much change. About 3 years elapse between initial identi-
                    fication of a requirement and accomplishment. For example, the depot
                    maintenance requirements for fiscal year 1989 were initially estimated
                    in late 1986 but not completed until October 1989. During this period,
                    programs, priorities, funding, and the factors used to compute require-
                    ments may change substantially; thus, the work accomplished may be
                    quite different than earlier estimated.

                    The Air Force’s budget request includes the computed depot mainte-
                    nance requirements for the upcoming fiscal year plus a carryover of
                    those requirements not funded in the previous fiscal year. The carry-
                    over exists when estimated repair requirements exceed available fund-
                    ing, creating an unfunded requirement. To determine how much of the


                    Page 9                               GAO/NSLAD-90-114   Aircraft   Depot Maintenance
                                                                                                                       ,
                                          Chapter 1
                                          Introduction




                                          unfunded requirement is to be included in the next year’s budget
                                          request, Air Force officials have typically reduced (discounted) the total
                                          requirement by about 20 to 50 percent to recognize changed or elimi-
                                          nated requirements. Unfunded requirements may be eliminated because
                                          they were overstated, unexecutable (tasks that could not be accom-
                                          plished at depots because of a lack of production capacity, personnel,
                                          parts, or for reasons other than a lack of funding), low priority, or rep-
                                          resented lost maintenance opportunities (tasks with maintenance cycles
                                          of less than 1 year that will already have been recalculated in next
                                          year’s requirement). The balance, referred to as the unfunded deferred
                                          requirement, is added into the next year’s program.


                                          Air Force annual budget submissions have usually projected an
Projected Funding                         unfunded requirement, or funding shortfall, which must be considered
Shortfalls                                for elimination or carryover. Shortfalls were rather small and consid-
                                          ered manageable until the amended budget submitted in February 1988,
                                          which forecasted total depot maintenance funding shortfalls of about
                                          $1,017 million in fiscal year 1988 and $1,464 million in fiscal year 1989.
                                          The largest unfunded requirement shown in the amended budget was
                                          for reparables-$688     million in fiscal year 1988 and $900 million in fis-
                                          cal year 1989. The shortfalls in the aircraft maintenance and moderniza-
                                          tion subactivities were projected to be about $156 million and $241
                                          million, respectively, as shown in table 1.1.

Table 1.1: Projected Funding Shortfalls
                                          Dollars in millions
                                                                                                             Fiscal year
                                                                                                    -        1988           1989
                                          Estimated reauirement                                              $789            $878
                                          Budgeted funding                                                   -633           -637
                                          Projected shortfall                                                5156            5241


                                          In March 1988, the Air Force testified before the Subcommittee on Read-
                                          iness, House Committee on Armed Services. The Air Force stated that
                                          the operating commands were being asked to assume some of the AFLC
                                          depot work load and that depot maintenance tasks were being elimi-
                                          nated or deferred because of the funding shortfall in fiscal year 1988.




                                          Page 10                              GAO/NSIAD-90-114   Aircraft    Depot Maintenance
                        Chapter 1
                        introduction




                        Because of concern about the Air Force’s management of its depot main-
Objectives, Scope,and   tenance work loads, the Chairman, Subcommittee on Readiness, House
Methodology             Committee on Armed Services, requested that we review the AFL&
                        transfer of aircraft maintenance and modernization tasks from the
                        depots to the operating commands during fiscal years 1988 and 1989
                        and determine whether these transfers duplicated depot activities,
                        increased costs, and impacted aircraft readiness. As agreed with the
                        Chairman’s office, we also reviewed the AFW'S elimination and deferral
                        of aircraft depot maintenance and modernization requirements to deter-
                        mine the significance of these actions in offsetting funding shortfalls.

                        We focused our review on aircraft maintenance tasks that were trans-
                        ferred from the depots to TAC and MAC in fiscal years 1988 and 1989. We
                        performed our review at the Air Force Headquarters, Washington, D.C.;
                        AFLC Headquarters, Wright-Patterson Air Force Base (AFB), Ohio;
                        Warner Robins Air Logistics Center, Robins AFB, Georgia; Headquarters
                        and 1st Tactical Fighter Wing, TX, Langley AFB, Virginia; Headquarters
                        and 375th Aeromedical Airlift Wing, MAC, Scott AFB, Illinois; Tyndall AFB,
                        Florida; and Eglin AFB, Florida.

                        To determine the Air Force’s process for transferring depot tasks to
                        operating commands, we reviewed Air Force regulations, policies, proce-
                        dures, and practices on the identification and transfer of work from
                        depots to operating commands, including (1) processes for shifting work
                        permanently, (2) temporary assistance provided by operating commands
                        on technical orders, programmed depot maintenance, and unscheduled
                        maintenance, and (3) one-time authorizations to accomplish specific
                        depot-level tasks.

                        During our visits to TAC and MAC, we discussed actions to address depot
                        maintenance funding shortfalls in fiscal year 1988 and identified tasks
                        transferred to TAC and MAC in fiscal years 1988 and 1989. At our request,
                        officials estimated costs and personnel hours expended by operating
                        commands on depot-level tasks; however, available cost data were not
                        complete or sufficient to accurately document the total work load trans-
                        ferred. We did not review actions taken by the Strategic Air Command
                        because its level of effort was less than either TAC or MAC.

                        To determine whether tasks accomplished at operating bases duplicated
                        depot activities and increased costs, we reviewed the AFLC'S and operat-
                        ing commands’ efforts to jointly identify tasks to transfer and coordi-
                        nate depot and base maintenance work loads. We obtained



                        Page 11                             GAO/NSIAD-90-114   Aircraft   Depot Maintenance
Chapter 1
Introduction




memorandums of agreement and other documents that defined responsi-
bilities and work processes. We compared transferred tasks with
existing depot work loads, reviewed budget documents, and discussed
with officials the personnel, facilities, equipment, and supplies required
to accomplish this work.

To identify potential effects on readiness, we reviewed Air Force reports
on and projections of capability. We identified Air Force assessment sys-
tems and reviewed management indicators of logistics support. We also
interviewed officials at AFLC, TAC, and MAC to obtain their perspectives on
operational experiences and readiness.

To review the extent to which the AFLC eliminated and deferred depot
maintenance requirements and how this affected funding shortfalls, we
traced the changes in funding and requirements in the aircraft depot
maintenance account from initial estimates to execution of the fiscal
years 1988 and 1989 programs and reviewed available fiscal year 1990
data. In addition, we tracked specific changes in the F-15 aircraft depot
requirements during these fiscal years, focusing on specific maintenance
and modernization tasks that had been deferred or eliminated.

We performed our review from May 1989 through January 1990 in
accordance with generally accepted government auditing standards.
DOD'S official comments on a draft of this report are in appendix I.




Page 12                             GAO/NSKAD-90-114
                                                   Aircraft   Depot Maintenance
I&pot Work Load Transferred to
Operating Commands

                     During fiscal years 1988 and 1989, some AFLC depot tasks were trans-
                     ferred to the operating commands. These tasks consisted primarily of
                     installing some modifications, inspecting aircraft, and accomplishing
                     tasks normally done during scheduled depot maintenance. In fiscal year
                     1988, the work load transferred to the commands was a relatively small
                     portion of the total depot work load. The amount of work transferred to
                     the commands decreased during fiscal year 1989 and is expected to
                     decrease further in fiscal year 1990. We found no evidence that base
                     maintenance efforts duplicated current depot maintenance activities,
                     increased maintenance costs significantly, or had a negative effect on
                     aircraft readiness.


                     In September 1987, AFLC provided the operating commands with initial
Tasks Accomplished   estimates of fiscal year 1988 depot maintenance funding. Because of
by Operating         projected funding shortfalls, AFLC asked the commands to (1) set priori-
Commands             ties for depot tasks to be done, (2) determine tasks that could be
                     deferred, and (3) identify tasks that bases could accomplish.

                     In an October 1987 message to AFLC, TAC proposed efforts to help work
                     around the funding shortfall. In addition to identifying tasks that could
                     be eliminated or deferred, TAC identified depot tasks that could be
                     accomplished at operating bases. The message stated that TAC could tem-
                     porarily absorb some, perhaps a substantial portion, of the depot main-
                     tenance work load. Maintenance tasks identified in the message included
                     unscheduled repairs usually done by depot field teams, painting of all
                     aircraft completing programmed depot maintenance, and maintenance
                     and modernization tasks eliminated from depot schedules.

                     In January 1988 messages to AFLC, officials from MAC and the Strategic
                     Air Command outlined their efforts to assist AFLC and work around the
                     depot funding shortfalls. Their actions emphasized increasing base-level
                     repair of parts and components. The Strategic Air Command stated its
                     intent to maximize use of its resources to maintain readiness of its
                     weapon systems, and MAC stated it was ready to do its fair share to
                     lessen the impact of funding shortfalls.

                     We found that base maintenance organizations of TX and MAC did
                     accomplish some maintenance and modernization tasks during fiscal
                     years 1988 and 1989 that AFLC had originally planned to do at its depots
                     and contractor facilities. These tasks included installing modifications,
                     inspecting aircraft, painting, making structural repairs, and performing ,,
                     other tasks normally accomplished during scheduled depot maintenance.


                     Page 13                             GAO/NSIAD-W-114   Aircraft Depot Maintenance
                                                                                                                  I   -
                    Chapter 2                                                                                             ,
                    Depot Work Load Transferred      to
                    Operating Commands




                    We did not review actions taken by the Strategic Air Command. How-
                    ever, according to AFLC officials, that Command also accomplished some
                    depot work.


TAC’s Efforts       With AFLC'S concurrence, TAC accomplished some depot level work dur-
                    ing fiscal years 1988 and 1989. TAC'S principal efforts consisted of the
                    following.

                l In January 1988, TAC signed agreements with Warner Robins ALC to
                  establish two regional maintenance facilities at Holloman and Tyndall
                  AFBS to accomplish F-15 modifications and repairs. TAC maintenance per-
                  sonnel assisted depot teams to repair and install modifications. During
                  fiscal year 1988, 76 modifications were installed on 12 aircraft at an
                  estimated cost to TAC of $344,000.
                l At other bases during fiscal year 1988, TAC personnel accomplished 125
                  modifications on F-15s at an estimated cost of $210,000. These tasks
                  were considered to be depot level because of the estimated time needed
                  to install modifications.”
                . Personnel installed modifications on F-16 aircraft at an estimated cost of
                  $100,000. These tasks were considered base-level efforts but had previ-
                  ously been done at AFL& depots for expediency.
                . TAC took back the responsibility for five field-level tasks on the F-l 11
                  aircraft that were previously done during programmed depot mainte-
                  nance for economic reasons. Officials estimated costs to be about
                  $63,000 per year.

                    TAC officials also reported painting F-15, F-16, and F-4 aircraft that AFLC
                    had decided to delay until the next scheduled maintenance. TAC officials
                    estimated it would have cost AFLC depots about $2.6 million to paint the
                    82 aircraft affected. Instead, TAC personnel painted some of these air-
                    craft as part of their ongoing painting program, although officials could
                    not tell us exactly how many additional aircraft TAC painted because of
                    AFL&    funding shortfalls. They also explained that their painting effort
                    is not comparable to the depot’s because TAC does not have the capability
                    to chemically strip paint off the aircraft.

                    TX personnel also increased their assistance to depot field teams per-
                    forming unscheduled maintenance. TAC officials could not quantify all
                    these efforts because work was commingled with regularly scheduled

                    ‘Air Force guidance considers tasks to be depot level if they require more than 26 hours to complete
                    the repair.



                    Page 14                                           GAO/NSIAD-90-114     Aircraft   Depot Maintenance
                Chapter 2
                Depot Work Load Transferred   to
                Operating Commands




                base maintenance and separate records were either not kept or were not
                accurately and consistently reported. The officials did state that,
                because of TAC'S assistance, the depots were able to respond to more
                requests for maintenance while spending fewer dollars. For example,
                according to TAC officials, in fiscal year 1987, AFL,C spent about $8.4 mil-
                lion in responding to 443 repair requests from TX. In fiscal year 1988,
                AFLC spent $4.1 million in responding to 624 requests. Actions during
                these 2 years cannot be directly compared because the work content was
                likely different, but TAC officials believe depot funds were saved as a
                result.

                TAC officials said their intent in assuming depot work loads was to help
                AFU: in the short term to work around funding shortfalls. They said that
                their efforts began in fiscal year 1988, decreased in fiscal year 1989,
                and should be completed during fiscal year 1990. The regional mainte-
                nance facilities were closed in late 1988. No new aircraft maintenance
                tasks were transferred during fiscal year 1989, and many of the tasks
                were shifted back to AFLG They said that with improved depot funding,
                the depot work load reverted to AFLC where it belonged.

                According to TAC officials, they did not want to permanently assume
                additional work loads because TAC did not have the capability to sustain
                additional work for an extended period of time. Also, TAC officials said
                that depot-level activities were not compatible with their primary mis-
                sion to deploy and fight. TAC, however, would continue doing some tasks
                that bases were capable of and when it made economic sense to do so.
                The officials said they would continue doing some inspections and other
                tasks previously performed by AFLC during programmed depot mainte-
                nance and would continue to assist depot field teams to the extent
                practical.


MAC’s Efforts   MAC also worked with AFLC to identify and accomplish depot work loads,
                but, like TAC, these efforts were relatively small and, in some cases, rep-
                resented a continuance of past practices. MAC officials characterized
                their primary approach during fiscal years 1988 and 1989 as “business
                as usual.” MAC officials said the Command has historically emphasized
                accomplishing the maximum maintenance possible at operating bases to
                save dollars and minimize the downtime caused when aircraft and parts
                have to be shipped to depots for repair. MAC'S responsibility to provide
                worldwide airlift to defense organizations on a daily basis has resulted
                in an extensive, very capable network of base maintenance, which has
                reduced their dependence on AFLC depots. In addition, MAC was not as


                Page 15                              GAO/NSIAD-m-114   Aircraft   Depot Maintenance
    Chapter 2
    Depot Work Load Transferred   to
    Operating Commands




    directly affected by the depot shortfalls as was TAC because most of
    MAC'S depot maintenance costs are paid for by the Airlift Services Indus-
    trial Fund, which was not underfunded.

    MAC'S principal efforts were to install modificationsthat were classified
    as depot-level tasks because of the estimated number of maintenance
    hours required to do them. MAC officials said they have accomplished
    similar work loads in the past where capable and when approved by
    AFLC. The officials cited the following work loads and cost estimates,
    which in some cases include efforts projected to continue beyond fiscal
    year 1989.

l   MAC is installing the throttle control modification on the C-130 aircraft.
    MAC will eventually install kits on 238 aircraft at an estimated total cost
  of $1.6 million.
. MAC is installing 17 modifications on C-5 aircraft at an estimated total
  cost of about $1 million.
l Base maintenance personnel are installing three modifications on the
  C-141 fleet because of a lack of depot capacity and the funding shortfall.
  Estimated cost will be about $370,000.

    In addition to installing depot-level modifications, MAC officials also
    identified 56 tasks on the C-9 aircraft (a military version of a DC-9 used
    for medical evacuation) that could be done by bases that were previ-
    ously done during contractor programmed depot maintenance. Eventu-
    ally, 15 inspections tasks were approved by AFLC to be accomplished by
    MAC MAC officials did not estimate the costs to be incurred by base main-
    tenance on these tasks. Also, they said that base personnel assisted
    depot and contractor field teams during unscheduled maintenance. This
    is not a new initiative but was reemphasized due to the funding
    shortfalls. The officials could not provide cost records for these efforts
    because work was typically accomplished in conjunction with normal
    base maintenance activities and reported as part of the total hours
    expended.

    MAC officials also reported that AFLC had extended the time intervals for
    programmed depot maintenance on the C-5, C-9, C-130, and C-141 air-
    craft during fiscal years 1988 and 1989. Intervals were extended from
    48 to 60 months because AFLC officials decided that the time period
    between scheduled maintenance could be lengthened without degrading
    safety or operability. According to MAC officials, the decisions to extend
    intervals were not made to accommodate the funding shortfalls but will
    result in decreased annual programmed depot maintenance costs.


    Page 16                               GAO/NSIAD-90-114   Aircraft   Depot Maintenance
                         Chapter 2
                         Depot Work Load Transferred   to
                         Operating Commands




                         AFLC'S transferring  of maintenance tasks to the operating commands did
Effects of Transferred   not substantially duplicate current depot activities or significantly
Work Loads               increase maintenance costs. These efforts also helped maintain aircraft
                         readiness by allowing the Logistics Command to target depot funds on
                         high-priority tasks.

                         AFLC officials could not quantify or fully identify the total cost of the
                         depot tasks accomplished at operating bases during fiscal years 1988
                         and 1989. AFLC requested the operating commands to provide cost data
                         in February 1988. AFLC said that quantifying these efforts was
                         extremely important if depot maintenance budget requests were to
                         retain credibility and asked the operating commands to estimate their
                         impacts on fiscal years 1988 and 1989 depot requirements. According to
                         AFLC officials, the operating commands never adequately complied with
                         their request. Consequently, AFLC did not know the full cost of depot
                         work load accomplished by operating commands during fiscal years
                         1988 and 1989. MAC replied that it was extremely difficult to quantify
                         depot requirements and projecting requirements based on temporary
                         efforts by MAC would only perpetuate the budget impact.

                         TAC and MAC officials could not completely identify and quantify  the
                         additional work load shifted due to funding shortfalls because (1) much
                         of the work had been accomplished in conjunction with their normal
                         base maintenance work loads and separate records were not always
                         kept or were incomplete and (2) it was difficult to distinguish some addi-
                         tional transferred work loads from similar work undertaken by bases in
                         the past. Also, some tasks are classified as base-level work but have fre-
                         quently been accomplished at depots for reasons of economy and effi-
                         ciency. Each year, AFLC and the operating commands negotiate whether
                         to include such work as part of the scheduled maintenance work
                         package.

                         We found no evidence that the tasks transferred to TAC and MAC substan-
                         tially duplicated AFLC depot activities. Officials from the three operating
                         commands coordinated their efforts and jointly determined tasks to be
                         transferred. In most cases, TAC and MAC maintenance personnel either
                         supplemented depot personnel or accomplished tasks that AFLC had
                         eliminated or deferred to subsequent years. For example, TAC personnel
                         augmented an existing depot work force and accomplished work at the
                         regional maintenance facilities that had previously been done by AFLC
                         personnel.




                         Page 17                              GAO/NSIAD-90-114   Aircraft   Depot Maintenance
                                                                            ,

Chapter 2
Depot Work Load Transferred   to
Operating Commands




TAC and MAC also assisted to a greater extent in performing unscheduled
maintenance work, thereby reducing AFLC'S level of involvement. TX
and MAC also performed other tasks normally accomplished during depot
maintenance, which AFLC had eliminated or delayed, including installing
modifications, painting, and inspecting aircraft.

Based on available information and officials’ statements, accomplishing
some maintenance work at operating bases instead of depots did not sig-
nificantly increase total maintenance costs. TAC and MAC officials said
they were able to do depot tasks without requiring additional base main-
tenance personnel, equipment, and facilities. They also said that base
supplies were sometimes used in the completion of depot work. They
could not identify such expenses in their cost records, but the additional
expenditures were considered small.

In its March 1988 testimony, the Air Force explained that the operating
commands’ ability to assume additional depot work loads was based on
the military work force at their disposal, which is sized for a wartime
mission and has unused capacity. Therefore, base maintenance organiza-
tions are able to expand peacetime operations-at       least for a period of
time-with     existing resources. Air Force officials said that the logistics
system has a substantial degree of “elasticity,” which gives the Air
Force flexibility in reacting to and coping with changes in depot mainte-
nance funding and work load. The officials also said, however, that con-
tinued shortfalls could strain the system.

Air Force officials claimed some cost savings by doing the work at oper-
ating bases. These savings, however, are difficult to verify because of
the lack of adequate cost data. In addition, the standard hourly rates
charged by depot and base personnel cannot be directly compared
because rates are based on different cost factors and assumptions.

According to Air Force officials, the actions taken to offset funding
shortfalls helped maintain readiness and daily operations at required
levels. The officials said their actions allowed AFLC to target funding on
high-priority tasks. Each operating command performed work that it
felt was needed, which allowed it to keep aircraft available and on-sta-
tion For example, some of the modifications installed by TAC and MAC
were to bring aircraft to comparable configurations and to improve
operations.




Page 18                               GAO/NStAD-90-114   Aircraft   Depot Maintenance
              Chapter 2
              Depot Work Load Transferred   to
              Operating Commands




              When faced with depot funding shortfalls, operating commands were
Conclusions   able to accomplish tasks with existing resources usually done by the
              AFLCdepots. Operating bases appear to be able to effectively perform
              additional work in certain cases where adequate and capable resources
              are available. We believe that the Air Force can continue to accomplish
              some depot-level maintenance tasks at the operating bases. Decisions as
              to the appropriate maintenance level for specific tasks should not be
              driven by funding but rather by economy, efficiency, and readiness
              factors.




              Page 19                            GAO/NSIAD-90-114   Aircraft   Depot Maintenance
                                                                                                       ,
Chapter 3

Requirements for Maintenance and
Modernization Tasks Reduced

                   In response to funding shortfalls in fiscal years 1988 and 1989 depot
                   maintenance funding, Air Force officials prioritized the depot work load
                   and allocated funds to support peacetime operations and maintain readi-
                   ness. In addition to transferring some tasks to the operating commands,
                  Air Force officials eliminated or deferred maintenance tasks that were
                   not executable (overstated), essential, or safety related. These actions
                   substantially reduced the size of the shortfalls from earlier budget pro-
                  jections while maintaining readiness and daily operations at required
                   levels. This raises questions about the need for and relative importance
                   of some requirements in the budget and the resultant projected
                   shortfalls. The Congress, in both fiscal years 1989 and 1990, provided
                   additional funding for depot maintenance because of projected funding
                   shortfalls.


                  Air Force officials eliminated requirements that had been overstated in
Overstated        the amended fiscal years 1988/1989 budget submission. The officials
Requirements in   said that total depot maintenance requirements in the amended budget
Amended Budget    included unexecutable tasks that could not be accomplished by the
                  depots during the program years because of a lack of production capac-
Eliminated        ity, parts, personnel, or for reasons other than a lack of funding. This
                  overstated the work load that the depots could realistically accomplish
                  and consequently overstated funding shortfalls.

                  For the fiscal year 1988 aircraft program, AFLC’S system identified
                  requirements of about $706 million in June 1988, a decrease of about
                  $83 million from about $789 million shown in the amended budget in
                  February 1988. Fiscal year 1989 aircraft maintenance requirements
                  decreased from about $878 million, the amount in the budget, to about
                  $810 million in the June 1988 management review, and to about $720
                  million tabulated by AFLC’S system in May 1989-a total decrease of
                  about $158 million. Air Force officials attributed much of the decreases
                  to the elimination of unexecutable requirements. The officials also said
                  that changes in the program, changes in the factors used to compute
                  requirements, and unforeseen events such as contracting delays likely
                  contributed to the decline in requirements.

                  Our report:’ on Air Force depot maintenance backlogs similarly showed
                  that the funding shortfalls originally projected in the amended budget


                        Maintenance: Air Force Defines Backlog Better, but Additional Efforts Are Needed (GAO/
                        _ 9- 211, Sept. 26,1989).



                  Page 20                                        GAO/NSIAD-90-114    Aircraft   Depot Maintenance
                           Chapter 3
                           Requirements    for Maintenance   and
                           Modernization    Ta~ke Reduced




                           for the entire depot maintenance and modernization program were sig-
                           nificantly reduced. This occurred when unexecutable requirements were
                           eliminated and the Air Force re-estimated annual requirements based on
                           (1) the actual work accomplished during the year and (2) a more accu-
                           rate measure of the valid unfunded work load to be deferred.


                           Because of the projected funding shortfalls, AFLC officials prioritized the
AFLC Eliminated and        depot maintenance work load and allocated funds to support peacetime
Deferred Maintenance       operations and maintain readiness. (See ch. 2.) In an October 1, 1987,
Tasks                      letter and in subsequent correspondence, AFIX officials asked the ALCS to
                           review repair requirements and determine those that could be elimi-
                           nated or deferred. The ALCS were asked to eliminate or defer aircraft
                           tasks that were not essential or safety related. AFLC provided funding so
                           that aircraft would not be grounded due to a failure to perform
                           programmed depot maintenance. Also, AFLC officials wanted to complete
                           the flying hour program as planned. AFLC’Sprimary goal was to maintain
                           readiness by supporting peacetime operations.

                           AFLC used the ALCS' information  to prioritize repairs and develop a strat-
                           egy for allocating funds. To reduce fiscal year 1988 aircraft require-
                           ments, AFLC

                       . eliminated some inspections and paintings, except for severe corrosion
                         control;
                       l eliminated tasks from scheduled depot maintenance that were not safety
                         related and others that had been added to the program for economical
                         reasons;
                       . extended time intervals for some programmed depot maintenance;
                       . left unfunded the estimated costs to repair damaged aircraft; and
                       . deferred the installation of nonsafety-related modifications and those
                         where needed modification kits were not available because of procure-
                         ments or delivery delays.

                           AFLC eliminated and deferred requirements totaling about $88 million by
                           these actions from June 1988 when the requirement was estimated at
                           about $706 million to September 1988 when funded requirements
                           totaled about $618 million. Table 3.1 shows the eliminations of about
                           $60 million and deferrals of about $28 million made in fiscal year 1988
                           by type of requirement.




                           Page 2 1                                GAO/NSIAD-90-114   Aircraft   Depot Maintenance
                                     Chapter 3
                                     Requirements    for Maintenance   and
                                     Modernization    Tasks Reduced




Table 3.1: Eliminated and Deferred
Requirement8                         Dollars in millions
                                     Type of requirement                                        Eliminated            Deferred
                                     Programmed maintenance                                           $26.2               $16.0
                                     Scheduled tasks                                                   13.3                 0.4
                                     Painting                                                          10.9                 0.4
                                     Modifications                                                      5.3                 4.9
                                     Inspections                                                        3.8                 0.0
                                     Damage repair/other                                                0.4                4.2
                                     Total                                                            $59.9               $27.9


                                     Some of these tasks were accomplished by the operating commands.
                                     AFLC officials determined that the others were not needed or could wait
                                     until the next scheduled maintenance without affecting the mission or
                                     safety.

                                     AFLC adopted much the same set of priorities     and funding strategy in
                                      accomplishing the fiscal year 1989 program. AFLC officials eliminated
                                      about $63 million during fiscal year 1989, including projected repairs of
                                      damaged aircraft, installation of modifications, and painting. For exam-
                                      ple, AFLC included a requirement in the budget of $22.6 million for pro-
                                     jected aircraft damage repair, including deferred requirements carried
                                     over from fiscal year 1988. During fiscal year 1989, AFLCofficials
                                     expended only $8.8 million and eliminated the remaining amount. At the
                                     end of the fiscal year, AFLC officials said that there were no unfunded
                                     deferred requirements to be carried over to fiscal year 1990.

                                     According to AFLC officials, fiscal year 1989 funding problems were not
                                     as severe as during fiscal year 1988 because of improved funding. The
                                     Congress provided additional funding for the depot maintenance pro-
                                     gram, some of which was allocated to aircraft tasks. The officials also
                                     said improved funding allowed them to adequately meet current needs
                                     while working off some of the deferred work from fiscal year 1988.


F-15 Tasks Eliminated or             Actions taken by the F-15 program office exemplify AFLC-wide efforts to
                                     eliminate or defer maintenance tasks. Major eliminations made by the
Deferred                             F-15 program office in fiscal year 1988 included painting 23 aircraft,
                                     conducting 55 repair tasks from scheduled maintenance, and inspecting
                    Y                9 aircraft. These tasks would have cost $2.2 million. Officials also
                                     rescheduled about $7 million of modifications to subsequent years,
                                     deleted a $3.1 million contingency fund for projected aircraft damage



                                     Page 22                                 GAO/NSIAD-90-114     Ah-craft   Depot Maintenance
                        Chapter3
                        Ikquirement.s   for Maintenance   and
                        Modemhation      Tasks Reduced




                        repair, and made other changes to the maintenance program. These
                        eliminations and deferrals plus other additions and reductions decreased
                        the total fiscal year 1988 maintenance requirements for the F-15 from
                        $86 million in June 1987 (the estimate used to prepare the amended
                        budget)‘to $73.9 million in August 1988 (near completion of the fiscal
                        year).

                        In the F-15’s fiscal year 1989 program, a delay in acquiring modification
                        kits reduced planned installation costs by $17.9 million. An F-15 official
                        said that contract or slippage in developing, testing, and approving the
                        kit delayed deliveries and consequently slipped the planned installation
                        schedule. The number of aircraft scheduled for programmed depot
                        maintenance also decreased from 100 to 78 due to capacity constraints,
                        which reduced depot requirements another $11.1 million. Warner Robins
                        AM= officials said the lack of capacity was due to the fiscal year 1988
                        funding shortfalls, which had prohibited them from adding maintenance
                        personnel. The F-15’s fiscal year 1989 requirements decreased from
                        $108.7 million to $89.7 million between March 1988 and July 1989 esti-
                        mates. As in fiscal year 1988, other program additions and reductions
                        resulted in the net decrease.

                        According to F-15 program officials, the funding shortfall was not the
                        only reason for the decreases in total requirements. Between earlier esti-
                        mates and completion of work, some new requirements were added and
                        others reduced for reasons not directly related to funding. For example,
                        the original fiscal year 1989 depot program for the F-15 aircraft shown
                        in the January 1987 budget submission did not include a programmed
                        depot maintenance schedule because the F-15 had been designed to be
                        field maintained. The Air Force subsequently decided to initiate a
                        programmed depot maintenance program in fiscal year 1989 because
                        repairs and unprogrammed maintenance had increased beyond the
                        field’s capacity and required depot capability. The new programmed
                        depot maintenance requirements were recognized in the February 1988
                        amended budget submission, and other repairs shown in the earlier
                        budget were reduced.


                        After eliminating unexecutable, nonessential, and low-priority mainte-
Shortfalls              nance tasks, the aircraft requirements for fiscal years 1988 and 1989
Significantly Reduced   were significantly reduced from estimates shown in the amended budget
and Readineb            request. At completion of the depot maintenance programs, the actual
                        funding shortfalls for fiscal year 1988-as measured by the unfunded
Maintained              deferred requirements-were      only $28 million. However, for fiscal year


                        Page 23                                 GAO/NSIAD-90-114   Aircraft   Depot Maintenance
                                                                                                                    ,


                                 Chapter 3
                                 Requirements    for Maintenance       and
                                 Modernization    Taska Reduced




                                  1989, the actual funding shortfalls were reduced to zero. This contrasted
                                 with the much larger shortfalls projected in the amended budget-$156
                                 million in fiscal year 1988 and $241 million in fiscal year 1989. (See
                                 table 1.1.) Although changes in budget guidance and definitions made
                                 since the amended budget was submitted preclude direct comparisons
                                 between actual and projected amounts, Air Force actions did substan-
                                 tially reduce budgeted requirements and the unfunded amounts to be
                                 carried over to subsequent years. Table 3.2 shows the aircraft mainte-
                                 nance requirements accomplished during fiscal years 1988 and 1989.

Table 3.2: Funding Shortfalls
                                 Dollars in millions
                                                                                                           Fiscal year
                                                       ___-.-.                                             1988              1989
                                 Ending requirement __           -..                                        $646        -.-___$657
                                 Funded                                                                    -618               -657
                                 Funding shortfall                                                           $28                $0


                                  The ending requirement reflects the eliminations made by Air Force offi-
                                  cials during program execution and represents work funded plus the
                                  computed unfunded work still considered valid and to be deferred to
                                  subsequent budgets. The reduced carryover of deferred requirements
                                  for fiscal years 1988 and 1989 consequently reduced fiscal years 1989
                                  and 1990 requirements from the initial projections shown in budget sub-
                                  missions. Funded amounts reflect (1) additional funds appropriated by
                                . the Congress in fiscal year 1989 and (2) Air Force funding adjustments,
                                  including redirection of funds to other accounts. The Congress added
                                  funding to the total depot maintenance account in fiscal year 1989
                                  ($63.8 million) and in fiscal year 1990 ($50 million) because of the Air
                                  Force’s projected funding shortfall.

                                 Despite the significant reductions in the fiscal years 1988 and 1989 air-
                                 craft programs, AFLC still provided an adequate level of depot support
                                 and helped the Air Force maintain high-readiness levels compared to
                                 prior years. AFLC'S funding strategy had protected basic aircraft pro-
                                 grams and had eliminated or deferred low-priority and noncritical tasks.
                                 Officials at AFLC, TAC, and MAC expressed general satisfaction with the
                                 level of depot support accorded aircraft. They said that high-priority,
                                 mission-essential, and safety-related tasks had been accomplished. In
                                 addition, aircraft had not been grounded due to a failure to perform
                                 scheduled maintenance. The officials also said their actions to eliminate
                                 unexecutable and lower priority work loads and defer other tasks



                                 Page 24                                     GAO/NSIAD-90-114   Aircraft    Depot Maintenance
                       Chapter 3
                       Reqnirementa    for Maintenance   and
                       Modernization    Tasks Reduced




                       helped maintain readiness and daily operations at required levels
                       despite the funding shortfalls.

                       According to figures supplied by the Air Force, mission capable rates
                       (the percent of available aircraft capable of performing their mission)
                       remained high and fairly steady during fiscal years 1988 and 1989, con-
                       tinuing the improvement shown throughout the 1980s. The mission
                       capable rate for the total Air Force was 81.1 percent in fiscal year 1988.
                       The rate declined slightly to 79.6 percent in fiscal year 1989 but was
                       still high compared to prior years. The rate was 66.2 percent in fiscal
                       year 1980. For TAC'S operational fighters, the mission capable rate was
                       88.2 percent in fiscal year 1988, an all-time high. Through the end of the
                       third quarter, the rate for fiscal year 1989 was 87.8 percent. In fiscal
                       year 1980, the mission capable rate for TAC'S operational fighters was
                       59.1 percent.


                       The Office of the Secretary of Defense and the Air Force have efforts
Efforts to Improve     underway to improve requirements estimates and budget submissions.
Requirements           These efforts include providing new planning instructions and budget
Estimates and Budget   guidance to make reporting formats more consistent and informative
                       and recommending improved procedures for estimating executable
Submissions            requirements and unfunded deferred requirements. Current budget gui-
                       dance prescribes that only executable requirements not accomplished
                       because of a lack of funds can be considered for deferral to next year’s
                       budget.

                       The Air Force is also studying why total depot requirements typically
                       decline from initial budget estimates to execution. Several studies have
                       shown, and Air Force officials acknowledge, that the depot maintenance
                       program actually accomplished is usually smaller than planned. As the
                       program moves closer to execution, forecasts are refined to better
                       reflect changed conditions and a more realistic level of executable
                       requirements. For example, Air Force officials successively reduced the
                       estimated fiscal year 1988 requirement (not including amounts deferred
                       from fiscal year 1987) for aircraft damage repair from $30.5 million to
                       $21.5 million to $15 million to better reflect decreased accident rates
                       experienced in recent years. In addition, as discussed in this report, the
                       officials can eliminate overstated, low-priority, and unexecutable
                       requirements and defer other tasks to the next year. Deferred require-
                       ments can include both planned tasks that could not be accomplished in
                       the budgeted year and other tasks that the officials determined could be
                       delayed without significant impact.


                       Page 25                                 GAO/NSlAD-90-114   Aircraft   Depot Maintenance
                                                                                           I




              Chapter 3
              Requirements    for Maintenance   and
              Modernization    Tasks Reduced




              We believe that the Air Force’s budget has enough flexibility to enable
Conclusions   its officials to eliminate some aircraft maintenance requirements and
              defer accomplishing others for a year or more with little impact on air-
              craft readiness. As a result of these eliminations and deferrals, the
              severe funding shortfalls projected for fiscal years 1988 and 1989 air-
              craft depot maintenance and modernization programs did not occur.
              This raises questions about the validity of some of the requirements and
              projected shortfalls presented in budget submissions. DOD and the Air
              Force have efforts underway to improve requirements determinations
              and budget submissions to the Congress, which are intended to present
              more appropriate funding levels for depot maintenance activities.




              Page 26                                 GAO/NSIADdO-114   Aircraft   Depot Maintenance
Page 27   GAO/NSIAD-90-114   Aircraft   Depot Maintenance
Appendix I

Comments F’rom the Assistavlt Secretary of                                                                    *‘.wg
Defense for production and Logistics


                                      ASSISTANT    SECRETARY       OF DEFENSE
                                           WASHINGTON,    D.C.   201014000




                                                           May 17, 1990

                 Mr. Frank C. Conahan
                 Assistant Comptroller General
                 National Security and
                   International  Affairs Division
                 U.S. General Accounting Office
                 Washington, DC 20548
                 Dear Mr. Conahan:
                       This is the Department of Defense (DOD) response to the
                 General Accounting Office (GAO) draft report, "AIRCRAFT MAINTENANCE:
                 Air Force Transferred and Eliminated Tasks to Address Funding
                 Shortfalls,"  dated April 5, 1990 (GAOCode 392496), OSDCase 8293.
                        The DOD has reviewed the report and concurs with the report's
                 findings.    It should be noted that it is not just Air Force policy to
                 accomplish maintenance at the lowest level where cost effective.
                 This DODpolicy is applicable to all four Military        Services and is
                 contained in DODDirective     4151.1, "Use of Contractor and DOD
                 Resources for Maintenance of Materiel."     In addition,    the Department
                 fully agrees with the GAOthat accomplishing some depot maintenance
                 tasks at the operating bases is feasible,    cost effective,     and
                 contributes    to improved readiness.
                       The Department will continue to pursue efforts underway to
                 improve depot maintenance requirements determinations  as identified
                 in the report and will monitor progress on those actions.
                      The Department appreciates         the opportunity          to review the report
                 in draft form.
                                                         Sincerely,



             Y


                                                         Principal           Deputy




                     Page 28                                      GAO/NSIAD-90-114    Aircraft   Depot Maintenance




                                                                                                              . .
Appendix II

II&&x Contributors to This Report


                        Norman J. Rabkin, Associate Director
National Security and   David Childress, Assistant Director
International Affairs   Andrea W. Brown, Evaluator
Division, Washington,
D.C.

Cincinnati Regional     Bruce D. Fairbairn, Evaluator-in-Charge
Office                  Mary Jo Griesenauer, Evaluator



Atlanta Regional        Don M. Howard, Site Senior
Office




(3W496)                 Page 29                              GAO/NSIAD-90-114   Aircraft   Depot Maintenance
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