Military depots can’t tell how much work they outsource

Military depots do a poor job of tracking how much work they outsource, according to a new General Accounting Office report.

Depots are required to annually track how much of their work is contracted out to private firms. Those figures are critical because a federal law, commonly called the 50-50 requirement, prohibits depots from outsourcing more than half of their work. But it is unclear whether depots are meeting that requirement, GAO found.

"While DoD showed the Army and Navy departments to be below the 50 percent funding limitation on private-sector workloads and the Air Force to be above it, continuing weaknesses in DoD's data gathering and reporting processes prevented us from determining with precision whether the services were in compliance with the 50-50 requirement," according to the report (GAO-03-16). GAO studied the services' reports for depot workloads in 2000 and 2001.

GAO found the Army, Navy, Air Force and Marine Corps all made substantial errors in reporting the amount of work they outsource at depots and the amount of work carried out by federal workers. For example:

• The Army overstated by about $400 million public and private work done at depots in 2000 and 2001 because of transcription errors.
  
• The Navy failed to report $200 million in repair work done by both depots and contractors in 2001.
  
• The Marine Corps, whose data is counted with the Navy's, overstated public and private depot work by about $25 million.
  
• The Air Force double-counted some in-house repair work, failed to report some infrastructure improvements to depots made by contractors and undercounted the number of contractors working temporarily at depots.

GAO found that based on more accurate calculations the Navy would have breached the 50-50 threshold in 2000 and 2001, while the Air Force, which already had violated the 50-50 requirement, would have further exceeded it. The Army would still have met the requirements of the law, auditors said.

GAO said that there are "abundant opportunities" to improve the 50-50 reporting process and results, but found "priority and emphasis from top management seems to be flagging." Nonetheless, GAO recommended that service managers issue new guidance for depot reporting, tighten management controls and also improve internal auditing of depots.