GAO _“_. “l.l... -~.-..” II ...-.l.l.l.l --_-- _..----. --..._. --__~-__ ARMY hllgrlst l!)!N) MAINTENANCE Clearer Guidance Needed to Ensure Programs Reflect Current Requirements 141999 l”l--_- _.-..I-.--_--.-----.-.-------- .__-._ -- (;AO/NSlAr)-!)0-2~!) United States General Accounting Office Washington, D.C. 20548 National Security and International Affairs Division B-226368 August 13,lQQO General William G. T. Tuttle, Jr. CommandingGeneral Headquarters, Army Materiel Command 6001 Eisenhower Avenue Alexandria, Virginia 22333-0001 Dear General Tuttle: At the request of the Chairman of the Subcommitteeon Readiness, HouseCommittee on Armed Services,we recently completed a review of the Army’s processfor determining depot maintenancerequirements. At two of the Army’s six buying commands-the U.S. Army Tank- Automotive Command(TACDM)and the U.S. Army Aviation Systems Command(AvscoM)-we examined how the Army determined secondary item requirements for repair programs.’ In this follow-on report, we addressthe issue of whether controls were in place to ensure that repair programs established at Army depots were basedon current requirements. The Army’s processfor determining depot repair programs begins with Background budget projections included in the President’s budget presented to the Congressin January of each year. The depot repair programs are then refined at the start of each fiscal year when the buying commands define the actual quantities they need to repair. The buying commands enter into written Memorandumsof Agreement (MaA) with Army depots establishing the quantities of assetsthey consider most crucial to be repaired during the fiscal year. The items are selectedfor inclusion in the MOA basedon their potential impact on Army readinessand/or high- dollar value. Oncethe fiscal year repair programs begin, the commands and the depots participate in quarterly production reviews of all MOA items. TACOMhas provided guidanceto item managersthat addressesthe need to use current requirements data when establishing depot maintenance requirements for use in budget submissions,which are prepared about 10 months prior to the MOA.AVSCAIMguidance requires item managersto review and validate repair requirements quarterly. However, neither ‘Arm Maintenance:Concernsover the Validity of DepotRequirementsand Backlogs @ih’SfiD _90_194BR, July 24,199O). . Page1 GAO/NSIAD-~~-~~~A~I~ Rep8irRequirement.a B-228958 command’sguidance specifically states that requirements need to be updated when establishing MOArepair program quantities or that updated requirements are to be consideredduring the quarterly produc- tion reviews. Officials at both buying commandsagreedthat even though the guidance is unclear on this issue, item managersshould be using current requirements information to prepare the MOAS. Our review indicated that the two buying commandslacked effective Results in Brief controls to ensure that repair programs established at Army depots were basedon current requirements data. Specifically, requirements for somedepot repair programs at these commandshad been established using outdated data. Basing program decisionson such data has resulted in the expenditure of money in somecasesto repair more items than were neededto satisfy current requirements. In other casesthe com- mands repaired fewer items than needed.In 1987, the Army Audit Agency found a similar problem at the U.S. Army Communications- Electronics Command.The Army Audit Agency reported that the com- mand had failed to review and adjust maintenanceprograms to coincide with changing requirements. The problems at the two commands,cou- pled with the prior Army Audit Agency finding, indicate that the situa- tion warrants your attention. Our review of 31 judgmentally selectedsecondaryitems (23 from TACOMand AVSCOM TACOM'SM~A and 8 from AVSCOM'S M~A) showed that MoA quantities for 13 Establish Repair (42 percent) were basedon current updated requirements data. As Requirements Using detailed in appendix I, the requirements for the remaining 18 items (68 percent) were computed 8 to 19 months prior to the preparation of Outdated Information the M~AS.In 16 of the 18 cases,more current information was available at the time the MOASwere prepared. In the remaining two cases,the requirements had not been updated since the MOAquantities were origi- nally established. Of the 23 items we examined from TACOM'Sfiscal year 1989 MOA,repre- senting about 44 percent of the MOAitems, we found that repair program quantities for 12 of the items had beenbasedon requirements reflected in supply control studies that were 9 to 16 months old when the MOAwas prepared. For 3 of the 12 items, quantities were adjusted after the MOA was prepared to reflect more current requirements. Repair programs for the remaining nine items, however, were basedon outdated require- ments information. As a result, as shown in table 1, repair programs for , six of the nine were carried out at levels abovecurrent requirements, Page 2 GAO/NSIAD99=229 Army Repair Requirements resulting in repair coststhat were excessto fiscal year 1989 require- ments by about $13.1 million.2 For the other three items, repair pro- grams were carried out below current requirements, resulting in shortagesof items valued at about $1.2 million. Table 1: TACOM Repair Costs in Excess of or Below Current Requirements Requirement Re$;;;po; Difference between Value of arsets in as defined in MOA quantity and excess of or below National stock number item name MOA was initiated current requirement current requirements -_. Excess to current requirements 2520-00-973-4086 Transmission 238 0 238 $571,200 2815-00-239-5819 Engine 1,212 405 807 4,599,900 2520-00-140-7531 Transmission 281 204 77 654,500 2520-00-971-5016 Transmission 416a 0 416 1,123,200 _-"--- 2815-00-178-0268 Engine 907 15 892 5,976,400 ~20-00-741~1141 Axle 42 0 42 134,400 ---_ Total $13,059,600 Below current requirements 2520-00-884-4833 Transmission 1,184 1,485 (301) (361,200) 2520-00-089-8287 Transfer 1,318 1,685 (367) (440,400) 2815-01-105-6445 Engine 74 111 (37) (403,300) ---_.--- Total $(1,204,900) BThe program quantity shown in the MOA was 522. However, due to a lack of unserviceable assets, the program was subsequently reduced to 416. TACOM’Streatment of the multifuel engine for the &ton truck (national stock number 2816-00-239-6819)illustrates the conditions that existed at that command.While TACOMshowed a requirement to repair 1,212 multifuel enginesin its fiscal year 1989 MOA, it had basedthis requirement on a June 1987 supply control study generated 16 months prior to the preparation of the MOA. A more current study, prepared in September 1988, about 1 month prior to the start of fiscal year 1989, showed that requirements had decreasedto 406-a reduction of 807 engines.TACOMtook no action to reduce the planned program but did adjust fiscal year 1990 requirements by 807 enginesto balance off the fiscal year 1989 excess.By repairing an additional 807 multifuel engines at a cost of $6,700 per engine,the Army spent $4.6 million more than 21nfive of the six cases,which wcount for $12.4million, TACOMlater adjustedfiscal years 1990, 1991,or 1992requirementsdownward to balancethe fiscal year 1989excess. Page 9 GAO/NSIAIMO-229 Army Repah Requirements necessaryto meet its fiscal year 1989 requirements. By repairing more items than it needsto, the Army risks being unable to repair needed items. The Army also increasesthe risk that someof the repaired items will becomeexcessto future needs. In our examination of 8 of 114 items from kwxm’s fiscal 1990 MOA, we found that repair requirements for 6 items were basedon outdated information that had been determined 8 to 19 months prior to the prepa- ration of the MOA. Quantities for four of the six items were later adjusted after the MOA was prepared. Requirementsfor the other two items had not been updated since the MOA quantities were originally established. Therefore, we were unable to determine whether the requirements included in the MOA were more or less than what is currently required. Item managersdid not always know about the existing procedures, which call for the quarterly review and validation of repair require- ments, or these procedureswere not clear to them. SomeTACOMand AVSCOMitem managerswho were not aware of these procedureshad not validated requirements prior to preparing the MOA. Item managerswho were aware of these procedures had not always implemented them becausethey believed that changing the original requirements could dis- rupt scheduling at the depots. Officials at both commandsagreedthat requirements should be validated prior to performing the repair work. The 1987 Army Audit Agency report concludedthat improvements were Army Audit Agency neededin the proceduresand controls used to establish and develop in- Reported Similar house depot maintenanceprograms at the Army’s Communications- Problems at Another Electronics Command.That report stated that item managershad estab- lished maintenanceprograms for secondary items, even though suffi- Command cient serviceablestocks were on hand to satisfy repair requirements. In addition, the Army Audit Agency found that several scheduledmainte- nance programs could have been reduced,but preplanned maintenance programs were seldom reviewed or adjusted to coincide with changing requirements. As a result, the Army Audit Agency concludedthat some maintenance programs had been established unnecessarily and that assetsthat exceededrequirements had beengenerated. The Army’s controls for ensuring that planned maintenanceprograms Conclusion and are basedon the most current available information would be strength- Recommendation ened if item managerswere specifically required to use the latest avail- able requirements data prior to the preparation of MoAS. This practice Page 4 GAO/NSIAD90-229 Army Repair Requirementa would allow item managersto cancel,reduce,or increasemaintenance requirements that have changedover time. Therefore, we recommendthat you clarify existing guidance to specifi- cally require the major subordinate commandsto baserequirements for depot maintenance programs on the latest information available at the time MOASare prepared. We reviewed TACOMand AVSCOMguidanceprovided to the item managers Scopeand to determine what procedureswere in place for determining quantities Methodology of repair items to be included in the MOAS. We discussedthe guidance with the item managersand obtained commandofficials’ views on what requirements data should be used when preparing the MOA. To assessthe validity of the quantities of assetsscheduledto be repaired, we judg- mentally selected23 of 62 items from TACOM'S 1989 MOA and 8 of 114 items from AVSCOM'S1990 MOA. We analyzed these items and inter- viewed responsibleitem managersto determine what requirements data they had used to support the MOAS and whether more current require- ments data had been available when the MOASwere prepared. We conducted our review from June 1989 to March 1990 in accordance with generally acceptedgovernment auditing standards. We obtained informal oral commentsfrom agencyofficials on this report. Department of Defenseand Army officials stated that they had no reasonto question the report. We would appreciate your advising us of what action you plan to take regarding our recommendation. We are sending copiesof the report to the Secretariesof Defenseand the Army; the Director of the Office of Managementand Budget; and the Chairmen of the HouseCommittee on Government Operations, Senate Committee on Governmental Affairs, and the Houseand Senate Committeeson Appropriations and on Armed Services. Page 6 GAO/NSIADQO-229 Army Repair Requlrementa . B-226358 Pleasecontact me at (202) 276-4141if you have any questions con- cerning this report. Major contributors to this report are listed in appendix II. Sincerely yours, Richard Davis Director, Army Issues Page 6 GAO/NSIAD-90-229 Army Repair Requirements Y Page 7 GAO/NSIAD-90-229 Army Repair Requirements Appendix I TACOM and AVSCOM MOA Programs Based ori- Outdated Data Date of supply control study Months that elapsed MOA repair used to define between study date National stock number Item name quantity’ MOA quantity and MOA - __ _.. .._-.-_. TACOM -..-__---____ 2520.00-884-4833 .-.-.--_.-.-__ Transmission 1,184 06187 16 28i 5-~~.~~~~5949 . _._-... ~~ -~.--_..-.-_ Enaine 343 06187 16b 2935.01-l 78-7245 _- ..__. _ ..--.- .._.. -__-. Engine rear module 176 08;87 14b 2526-00-089-8287 _...-. -.. Transfer 1,318 12187 10 2815-01-1056445 _._.. ..~~ .-.. Engine 74 01188 9 2520-00-973-4086 Transmission 238 06187 16 2530-oo:~~~.~~~.-. ..-.-..- __...- ._^ Steering gear 922 12187 lob 2815-00239-5819 _ . _-. .._-- ___-.__ --..- Engine 1,212 06187 16 i520:b0-, ~... .._ .40-7531 .-.____ -. . ..--.. __---- Transmission 281 oat87 14 2520-00-971-5016 ._.--..__. -- _.._-_. ____--_. Transmission 522 OS;87 16 2615-00-178-0268 Engine 907 06187 1% 2520-00-741-t 141 Axle 42 06187 16 _.-_.- .._...~...~ AVSCOM 2840-01-030-4890 ._ ~..--- _.-...._ ._. _--.-. _ Helicooter enaine overhaul 86 12188 1Ob 2840-O 1.030-4890 Helicopter engine inspect/repair 35 12;88 lob 2840.OO-134-4803 -.“. - ---_-- Helicopter engine overhaul 430 02189 8b 2840-00-I 34-4603 Helicopter engine inspect/repair 171 02189 8b 16 15-00-l _.-. 83-0834 -.-.- ~. Helicopter transmission 550 03188 19 i 615:6;:237-0512 Helicopter hub assembly 546 06188 16 aThe TACOM fiscal year 1989 MOA was prepared around October 1988.The AVSCOM fiscal year 1990 MOA was prepared around October 1989. bThese items were adjusted after the MOA was prepared to reflect more current information Page 8 GAO/NSIAD9O-229 Army Repair Requirements (L &p&dix II lS&jor Contributors to This &port Henry L. Hinton, Associate Director National Security and Kenneth R. Knouse,Jr., Assistant Director International Affairs StephenG. De Sart, Evaluator-in-Charge Division, Washington, Beverly Schladt, Reports Analyst D.C. Detroit Regional Office Robert GilbertW. Herman, RegionalAssignment Manager w Kruper SiteSenior Yasmina T. Musaliam, Evaluator (3%3840) Page 9 GAO/NSIAtMtb222 Army Repair Rewirement8 _ - ._..._______. -..- -.-...- . ..-.-.-.. l,,,.l”l, ,*” ,I,, **,,,“*ll,*,,“lll,l,“,,‘,,~“l.lll ..,,, .I....” “r.ll l..“.” ._(--.1 -. .-- “..---..~. ..- -.. - 1J.S. (;twt~ratl Accounting Office I’os1, of’fiw Hox 6015 GaiLhtwbnrg, Maryland 20877 ‘I’t~lt*pholle 202-275-6241 ‘I’hv first, five copiw of each wporC are frtw. Additional copies art* $2.00 t%cbh. ‘I’hwt~ is ii 25”,, discount. on ordws for 100 or mort~ copiw maiIt3i I,0 a singlt* acldrws.
Army Maintenance: Clearer Guidance Needed to Ensure Programs Reflect Current Requirements
Published by the Government Accountability Office on 1990-08-13.
Below is a raw (and likely hideous) rendition of the original report. (PDF)