Summary

The Pentagon each year spends about $15 billion for depot maintenance, modifications and upgrades to support aircraft, combat vehicles, wheeled vehicles, ships, and other equipment. In the context of the military downsizing, the Defense Department (DOD) needs to acquire depot maintenance activities cost effectively while supporting industrial base needs in both the public and private sectors. Central to the debate over defense depot maintenance are questions about how much workload should be retained in the public depots as "core" capability, whether a service should be allowed to have its own core capability, and how the remaining non-core workload should be allocated between the public and private sectors. GAO testified that the amount of money going to the private sector is much higher than reported--at least half of the current depot maintenance funding. Although GAO has concerns about public-private competition and the amount of savings is hard to quantify, GAO believes that the program can cut depot maintenance costs. GAO supports many of the task force's findings and recommendations, but areas of disagreement exist. For example, GAO agrees that a rational maintenance core policy needs to be identified but believes that this should be done throughout DOD rather than on a service-specific basis. None of the maintenance depots targeted for closure have shut down yet. DOD appears to have an effective program to help employees find new jobs, although some workers may have to settle for lower-paying positions. Concerns have also been raised about other aspects of the depot closures.