Summary: The Pentagon's policy of shifting depot maintenance workloads to the private sector is unlikely to generate expected savings and could worsen excess capacity problems at underused repair facilities. Meanwhile, the Defense Department (DOD) could save $182 million annually by closing rather than privatizing-in-place the Sacramento and San Antonio Air Logistics Centers. This testimony is a preliminary analysis of DOD's March 1996 report, mandated by Congress, on the military's comprehensive depot maintenance policy. GAO also addresses the allocation of the depot maintenance workload between the public and the private sectors, including ongoing privatization initiatives, such as privatization-in-place. GAO discusses (1) DOD's depot maintenance management model in the post-Cold War era, (2) the extent to which DOD's proposed depot maintenance policy is consistent with congressional direction and guidance, (3) the savings that DOD is anticipating from privatization of depot maintenance activities, and (4) the cost-effectiveness of privatization-in-place as an alternative to closing depots.
