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Depot Maintenance: DoD Needs Plan to Ensure Compliance with Public-and Private-Sector Funding Allocation


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Under 10 U.S.C. 2466, the military departments and defense agencies can use no more than 50 percent of annual depot maintenance fundingfor work performed by private sector contractors. DOD also must submit two reports to the Congress annually on the division of depot maintenance funding between the public and private sectorsone about the percentage of funds spent in the previous 2 fiscal years (prior-years report) and one about the current and 4 succeeding fiscal years (future-years report). As required, GAO reviewed the two DOD reports submitted in early 2004 and is, with this report, submitting its views to the Congress on whether (1) the military services met the so-called 50-50 requirement for fiscal years 2002-3 and (2) the projections for fiscal years 2004-8 are reasonable estimates. GAO also identified key limitations in the 50-50 process that affect the departments ability to comply with the 50-50 requirement. GAO recommends that DOD have a plan to mitigate the potential for exceeding the 50 percent private sector funding threshold and improve the 50-50 data collection and reporting process so that the 50-50 reports submitted to the Congress are more useful to decision makers. DOD commented on a draft of this report. DOD concurred with the recommendations and cited actions it will take to implement the recommendations.



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