Summary: GAO reviewed the Army's Area Oriented Depot (AOD) modernization program which will provide three new, mechanized distribution centers to respond to projected peacetime work load increases and to replace old facilities.
GAO noted that construction of the centers should begin in 1986 and is expected to take 30 months for each center. GAO found that: (1) the Army's computations overstated the projected peacetime work load increases for the two facilities; (2) the Army designed the facilities for 3 times their projected work load rather than the required 1.6 times the current peacetime work load; (3) the Army did not document alleged problems with the equipment; (4) most of the problems concerned the materiel handling systems which the Army could replace; (5) a majority of the new equipment the Army purchased for two of the facilities would not be used if the new centers became operational; (6) the analyses did not identify less costly alternatives to the new centers, did not reflect the sensitivity of the two projects to estimated cost changes, and excluded major costs that would affect the viability and payback period for the centers; (7) the highly mechanized operations for the new centers may be unnecessary; and (8) existing work load distribution imbalances would probably continue to exist under the modernization program.
