The Effects of Equipment Age on Spare Part Costs: A Study of M1 Tanks
RAND ARROYO CENTER SANTA MONICA CA
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As the Army transitions to the Future Force, it will continue to rely on existing weapon systems, such as the M1 Abrams tank, until the Future Combat Systems FCS and companion systems are fully fielded. This has prompted concerns by Army officials who have argued that the increasing age of the Armys fleets is leading to lower readiness and higher costs. As a result, the Army has initiated programs such as recapitalization to selectively rebuild and upgrade systems. Budget justifications for such programs have sometimes been difficult, because empirical studies have not demonstrated a convincing relationship between age and maintenance costs. For example, a recent RAND Arroyo Center study of M1 tanks found that although increased equipment age is associated with increased mission critical failures and thus likely affects readiness, little to no age effect is apparent among the high-cost parts that dominate M1 spare part expenditures. Similarly, a recent Congressional Budget Office CBO study found no evidence of a link between M1 tank age and operating costs. However, such cost studies are hampered by a lack of data to effectively account for all maintenance costs. In this report, the authors discuss the data limitations as well as practices and behaviors within Army units that can obscure the effects of age on maintenance costs. Then they examine what the available data show about M1 age and spare part costs, and they also analyze whether part turn-in practices might obscure the effects of age on costs. They conclude with recommendations for improving the Armys data capture and business processes to enable better fleet analysis and management.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies
- Combat Vehicles