Navy Maintenance: Aviation Component Repair Program Needs Greater Management Attention

The Naval Aviation Depots generated revenues of about 1.7 billion in fiscal year 1988 by overhauling and repairing such items as airframes, engines, and components. The component repair program was the largest segment with revenues of 601 million. GAO reviewed the component repair program to evaluate the reasonableness of repair prices, management oversight, and efforts to improve efficiency. Industrial fund activities, such as the Naval Aviation Depots, perform functions of an industrial or commercial nature for customers that reimburse the activities for costs incurred. Each depot determines the price charged the Aviation Supply Office for each type of component repair. To help ensure that the prices are reasonable, depots use standards that reflect the number of labor hours that the repair should require. Ideally, this pricing process should result in the depots being reimbursed at a level closely approximating the actual costs of the repairs.