Depot Maintenance: DOD Should Improve Pandemic Plans and Publish Working Capital Fund Policy
Fast Facts
About 40,000 civilians at Marine Corps, Navy, and Air Force depots maintain weapon systems and equipment. During FY 2020, COVID-19 exacerbated challenges the depots already faced, such as having too few people or materials to finish work.
The depots responded to COVID-19 by protecting personnel, shifting schedules, or pausing operations. DOD also acted to keep the funds used to operate depots solvent, despite reduced depot revenue.
Our 9 recommendations include that DOD provide guidance to depot personnel before a crisis, update depot contingency plans based on COVID-19 lessons learned, and publish its Working Capital Fund cash management policy.
Civilian depot employees work on an F-16 aircraft at Hill Air Force Base, Utah during COVID-19.
Highlights
What GAO Found
The Coronavirus Disease 2019 (COVID-19) pandemic exacerbated productivity challenges Marine Corps, Navy, and Air Force depots already faced, such as not having enough personnel to perform maintenance. At half of the eight depots GAO reviewed, productivity was lower than planned every month during fiscal year 2020. For example, revenue at one Air Force depot was about 10 to 30 percent less than planned throughout fiscal year 2020. Prior to COVID-19, depot revenue was decreased due to fewer orders than planned at Marine Corps and Navy depots, and fewer flying hours than planned at Air Force depots, according to officials. After the onset of COVID-19, all eight depots reported that some of the challenges they were already facing worsened, such as personnel shortages.
Marine Corps, Navy, and Air Force management supported their workforce during COVID-19, but had challenges continuing operations and improving crisis response, according to GAO analysis. Depots supported the workforce by considering local conditions, adjusting operating schedules, and using remote work. However, depots did not consistently address key practices for continuing operations. Depot officials said that adapting existing contingency plans for natural disasters to COVID-19 added to confusion among mission-essential personnel early in the pandemic. Additionally, depots did not consistently document lessons learned. Improving guidance to depots, updating contingency plans to address a long-term crisis impacting the depot workforce, and using lessons learned from the COVID-19 pandemic to develop exercises, will help the depots protect the workforce and maintain productivity during a future crisis.
Congress and the Department of Defense (DOD) took steps to ensure the Navy and Air Force Working Capital Funds (WCFs) were solvent at the end of fiscal year 2020, but DOD's cash management policy is not reflected in current guidance. In March 2020, Congress provided the Navy and Air Force WCFs $475 million each through the CARES Act. In addition, DOD, Navy, and Air Force officials used a cash management policy in draft since July 2015 to raise cash balances above the lower cash requirement by the end of fiscal year 2020. However, DOD's cash management policy is not reflected in published DOD Financial Management Regulation. Publishing the guidance would improve transparency and the ability of Congress to oversee DOD WCFs.
Fiscal Year 2020 Working Capital Fund Cash Balances
Why GAO Did This Study
Pandemics such as COVID-19 can impact the productivity of critical DOD depots that maintain weapon systems if essential personnel are unable to report for work. Navy and Air Force WCFs must also maintain cash balances sufficient for the activities they support, including the eight depots operated by the Marine Corps, Navy, and Air Force, to sustain readiness.
GAO was asked to assess the effects of COVID-19 on WCF and depot operations as part of its CARES Act oversight. This report (1) describes how COVID-19 impacted Marine Corps, Navy, and Air Force depot productivity; (2) examines the extent to which depot actions in response to COVID-19 addressed key practices to support the workforce, continue operations, and improve crisis response; and (3) examines the extent to which WCF cash management policy ensured financial solvency and reflected current guidance. GAO reviewed DOD guidance, depot revenue data for fiscal year 2020, and documents related to the impact of COVID-19 on productivity and WCF solvency; and interviewed depot and financial management officials.
Recommendations
GAO is making nine recommendations, including that DOD develop guidance and a communication plan for mission-essential depot personnel; update contingency plans and exercises; record lessons learned from COVID-19; and publish WCF cash management policy. DOD concurred with GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of the Secretary of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment develop guidance to ensure that depot management and civilian personnel are aware of their mission-essential status and the need to support readiness during a long-term crisis affecting the DOD depot workforce. (Recommendation 1) |
The Office of the Under Secretary of Defense for Acquisitions and Sustainment concurred with this recommendation and, in August 2023, the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)) approved and published an updated Continuity of Operations Plan (COOP) that addressed our recommendation. Specifically, the updated COOP included an OUSD(A&S) Pandemic Operations Plan that stated at the outbreak of a pandemic, OUSD(A&S) will notify the Defense Industrial Base government and contractor workforce that they are mission essential personnel who provide essential services required to meet national security commitments to the federal government and U.S. Military.
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| Office of the Secretary of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment develop a communications plan to ensure that depot management and civilian personnel are aware of their mission-essential status and the need to support readiness during a long-term crisis affecting the depot workforce. (Recommendation 2) |
The Department of Defense (DOD) concurred with the recommendation and in June 2021 created a website that includes the most current guidance, information, and resources available for members of the DOD, civilian workforce, Defense Industrial Base and the general public in regards to COVID-19. The Department stated they will continue to use this platform to provide clear guidance to all members of the DOD before and during any long-term crisis to help continue operations and minimize confusion among the workforce.
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| United States Marine Corps | The Commandant of the Marine Corps should ensure that the Marine Corps Maintenance Command formally record lessons learned in response to the COVID-19 pandemic, and use lessons learned to update depot-specific contingency plans. (Recommendation 3) |
The Commandant of the Marine Corps concurred with this recommendation and, per the Corps March 2022 Corrective Action Plan, the Marine Depot Maintenance Command (MDMC) updated the June 2020 After Actions Report on lessons learned as well as published a Pandemic Contingency Plan within the MDMC's Emergency Action Plan (EAP) in June 2022. GAO responded that the period covered for those lessons learned should be longer to representative of the complete life cycle of the pandemic and they need to inform their EAP. In October, 2023 we met with the USMC to inform them that we concluded that the Pandemic section added to their EAP was inadequate and suggested they model their pandemic section in their EAP after COMFRC's COOP ANNEX E Pandemic Response Plan. However, as of April, 2024, the Marine Corps has not provided an update, revised CAP, or documentation to support actions that adequately address this recommendation.
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| United States Marine Corps | The Commandant of the Marine Corps should ensure that the Marine Corps Maintenance Command develop exercises for Marine Corps Production Plants to support productivity during any long-term crisis affecting the depot workforce. (Recommendation 4) |
The Commandant of the Marine Corps concurred with this recommendation. Due to the nature of depot operations, the majority of the workforce is not eligible to telework. Execution of production is dependent on the workforce being on site and supporting supply chains that are impacted by the actions and decisions of external organizations. Marine Depot Maintenance Command (MDMC) incorporated exercises into their Emergency Action Plan (EAP), MDMCO 5100.2 (June 10, 2022), which was distributed to the external organizations that contribute to MDMC's supply chain. However, in reviewing the Pandemic section added to MDMC's EAP, we concluded it was inadequate in addressing this recommendation. The exercises and related pandemic content in the EAP lacked detailed information needed to support productivity during a long-term crisis (e.g., pandemic). As of April, 2024, the Marine Corps has not provided an update, revised CAP, or documentation to support actions that adequately address this recommendation.
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| Department of the Navy | The Secretary of the Navy should ensure that Naval Air Systems Command and the Commander, Fleet Readiness Centers formally record lessons learned in response to the COVID-19 pandemic, and use lessons learned to update depot-specific contingency plans. (Recommendation 5) |
The Department of Defense concurred with the recommendation and in May 2021 Commander, Fleet Readiness Center developed a pandemic response plan and included it in its contingency plan. More specifically, COMFRC received, reviewed and archived lessons learned from its subordinate commands and depots and monitored those entities to ensure the lessons learned were acted upon. Based on the lessons learned, COMFRC developed and included "Annex E - Pandemic Response Plan" to their Continuity of Operations Implementation Plan. The annex provides a framework for the continuity of operations for COMFRC headquarters and its depots by identifying actions and responsibilities that will help minimize the impact of a pandemic. Improving guidance to depots, updating contingency plans to address a long-term crisis impacting the depot workforce, and using lessons learned from the COVID-19 pandemic to develop exercises, will help the depots protect the workforce and maintain productivity during a future crisis.
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| Department of the Navy | The Secretary of the Navy should ensure that Naval Air Systems Command and the Commander, Fleet Readiness Centers develop exercises to support productivity during any long-term crisis affecting the depot workforce. (Recommendation 6) |
The Navy concurred with this recommendation, and in February 2022, the Navy revised its Continuity of Operation Plan to establish an annual requirement for the depots to perform exercises to validate their ability to conduct the depots missions and functions under all threats and conditions including a pandemic. Developing exercises to address long-term health crisis will help the depots protect the workforce and maintain productivity during a future crisis.
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| Department of the Air Force | The Secretary of the Air Force should ensure that Air Force Material Command and the Air Force Sustainment Center formally record lessons learned in response to the COVID-19 pandemic, and use lessons learned to update depot-specific contingency plans. (Recommendation 7) |
The Air Force concurred with this recommendation and, per the Department's September 2023 update, is taking three actions. First, the Air Force Sustainment Center (AFSC) is revising existing Continuity of Operations Plans to incorporate higher headquarters guidance, more detailed pandemic-specific contingencies, and Air Force Material Command's 2021 telework guidance. Second, the AFSC is replacing desktop computers with laptops as quickly as cost restraints will allow to better maintain telework ready operations and help maintain readiness. Finally, the AFSC is identifying key critical positions to maintain mission essential functions during a pandemic. As of April 2024, the Air Force expects to complete these actions by September 27, 2024.
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| Department of the Air Force | The Secretary of the Air Force should ensure that Air Force Material Command and the Air Force Sustainment Center develop exercises to support productivity during any long-term crisis affecting the depot workforce. (Recommendation 8) |
The Air Force concurred with this recommendation and, per the Department's September 2023 update, is taking the following actions. First, the Air Force Sustainment Center (AFSC), in conjunction with installation wings, will hold Continuity of Operations Plan exercises. These exercises will incorporate long-term crisis enactments into the existing schedule and use lessons learned to enhance clarity for prolonged pandemic contingencies. Second, AFSC will also increase pandemic response readiness by periodically testing telework readiness as part of its annual Continuity of Operations Plan exercises. As of April 2024, the Air Force expects to complete these actions by December 6, 2024.
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| Office of the Secretary of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense (Comptroller) publish the most recent DOD Working Capital Fund cash management policy in the DOD Financial Management Regulation. (Recommendation 9) |
In April 2021, we reported that the Department of Defense (DOD) has been managing Working Capital Fund (WCF) cash balances in accordance with its cash management policy in a draft DOD Financial Management Regulation (FMR) chapter (Vol. 2B Ch. 9) since July 2015. However, the Office of the Under Secretary of Defense (Comptroller) OUSD(C) had not yet codified changes to the policy into its officially published chapter of the FMR since December 2014 due to OUSD(C) staff turnover and delays processing changes in DOD's Office of the General Counsel. We recommended that OUSD(C) publish the most recent DOD WCF cash management policy in the DOD FMR. In August 2022, the OUSD(C) published the current DOD cash management policy in its FMR on its website. Publishing DOD's current cash management policy guidance enhances transparency regarding DOD WCF cash management in addition to supporting Congressional and departmental oversight.
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