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NSIAD-94-242R 1 (1994-07-28)

handle is hein.gao/gaobackpu0001 and id is 1 raw text is: UIiedStte General Accounting Office Washington, D.C. 20548 National Security and International Affairs Division B-257959 July 28, 1994 The Honorable Earl Hutto Chairman, Subcommittee on Readiness Committee on Armed Services House of Representatives Dear Mr. Chairman: At your request, we have reviewed a May 19, 1994 industry group letter (see encl. 1) commenting on our recent testimony, Depot Maintenance: Issues in Allocating Workload Between the Public and Private Sectors (GAO/T-NSIAD-94-161, Apr. 12, 1994). The industry group letter basically takes issue with our findings and conclusions. To help clarify the record, this letter addresses the major thrusts of the industry group letter--depot maintenance workload mix between the public and private sectors, the use of public- private competition as an allocation tool, and cost comparability between the public and private sectors. DEPOT MAINTENANCE WORKLOAD MIX BETWEEN THE PUBLIC AND PRIVATE SECTORS The industry group letter stated that our testimony suggested the private sector is receiving more than its 'share' of depot work. While our testimony stated that previous reports of workload mix between the public and private sectors understates the portion of funding going to the private sector, we did not state or imply that the private sector was receiving more than its share. We believe it is important to point out, however, the law controlling depot maintenance work does not provide that the private sector is guaranteed a percentage share of the depot work. There is no industry entitlement to a minimum share. Current law limits the amount of depot maintenance work that the Department of Defense (DOD) may contract out to the private sector. Section 2466(a) of title 10, U.S. Code, requires that DOD not contract for performance by non- federal government personnel for more than 40 percent of the depot-level workload. The statute also requires that not GAO/NSIAD-94-242R Depot Maintenance

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