1. Kaminski, Dr. Paul G., Under Secretary of Defense for Acquisition and Technology, "The Revolution in Defense Logistics," Keynote Address to the 12th National Logistics Symposium and Exhibition, Alexandria, VA, October 31, 1995.
2. Rick Maze, "Dorn declares drawdown a success," Army Times, 11 March 1996, 14.
3. Dennis J. Wightman, Robert L. Jordan, and Larry M. Rosen, Logistics Management Institute, Characterizing the Maintenance Workforce, LG404RD1, McLean, VA, December 1994, 2-1 and 4-1. Between 1989 and 1993, the number of military maintenance personnel was reduced by 21 percent across the force (589,400 to 465,000) while civilian blue collar maintainers were reduced by 16 percent (141,800 to 118,600) and white collar maintenance personnel were reduced by 11 percent (50,400 to 44,800). Civilian maintenance personnel in DOD constitute 18 percent of the total DOD civilian population.
4. Robert T. Mason, Director of Maintenance Policy, Office of the Deputy Assistant Secretary of Defense, Chronology of Significant Events Associated with Improving Joint Cooperation and Depot Maintenance Interservicing in the Department of Defense, 1958-1993 (unpublished draft), 1.
7. Report to the President and the Secretary of Defense on the Department of Defense, Blue Ribbon Defense Panel, 1 July 1970, 106-107.
12. Samuel Munroe, HQ Air Force Materiel Command, Interservicing Office, Wright-Patterson AFB, OH. As an example, Mr. Munroe states that in 1989, the Air Force established an interservicing goal to move from 3 percent to 10 percent of workload. However, through 1995, the best interservicing rate achieved by the Air Force was approximately 4 percent. Achieving a 10 percent rate is the height of optimism according to Mr. Munroe.
14. Depot Maintenance Consolidation Study, prepared for the Chairman Joint Chiefs of Staff, Pentagon, Washington, DC, January 1993, V-1 and V-2.
15. Captain Spence Robbins, USN, personal interview, Pentagon, 12 December, 1995.
16. Samuel Rizotte, HQ, Air Force Materiel Command (BRAC Office), Wright-Patterson AFB, OH, telephone interview, 6 March 1996.
17. Integrated Management of Department of Defense Depot Maintenance Activities, Office of the Deputy Undersecretary of Defense (Logistics), Pentagon, Washington, DC, October 1993, 5-18 and 6-4. During initial scoring of the four options, the services and OSD preferred the Empowered DDMC while the JCS preferred the JDMC. However, the JDMC was least preferred by OSD.
18. Report of the Defense Science Board Task Force on Depot Maintenance Management, Office of the Under Secretary of Defense for Acquisition and Technology, Washington, DC, April 1994, 5.
19. Addendum to the Report of the Defense Science Board Task Force on Depot Maintenance Management, Office of the Under Secretary of Defense for Acquisition and Technology, Washington, DC, October 1994, 2-3.
20. Report of the Commission on Roles and Missions of the Armed Forces, "Directions for Defense," Washington, DC, 24 May 1995, 3-20. This concept is not new to the services and has been debated for years without resolution. Most proponents of the Single Manager Element (SME) concept are external to the services.
21. Robert T. Mason, SES, Office of the Deputy Assistant Secretary of Defense for Maintenance Policy, personal interview, Pentagon, 12 December 1995. In a subsequent conversation with Mr. James Woodard of Army Materiel Command (AMC), Mr. Woodard states that he would prefer consolidation to privatization due to fears that truly civilian contractors will not respond to battlefield requirements, although DYNCORP, LSI, Brown and Root, and others supported operations in Vietnam during America's involvement; however, that conflict was not like World War I, World War II, or Korea. Mr. Dan McDavid of AMC believes all the consolidation that can be done, has been done, and that little savings are left. He states that national centers for technical excellence do create efficiencies, but that the recent BRAC decision to leave workload at Red River Army Depot goes against that concept.
23. Daniel McDavid, Office of the Deputy Chief of Staff for Logistics, Headquarters, Army Materiel Command, Alexandria, Virginia, telephone interview, 26 February 1996. The Air Force is opposed to moving the ground electronics maintenance workload from Sacramento AFB, California to Tobyhanna Army Depot (TOAD), Pennsylvania as directed by the 1995 BRAC Commission. The Air Force proposed delaying workload transfer until the last year of BRAC execution FY2001 which the DDMC has accepted. The probable result is the loss of skilled civilian employees at TOAD while those jobs remain in California. This was confirmed by Ms. Susan Bauer of the Army BRAC office who further clarified that "privatization prior to FY2001 could possibly preclude these jobs from moving at all." The end result could be the thwarting of the BRAC Commission recommendations while precluding the directed consolidation of activities for efficiencies. In a recent joint meeting of AFMC and AMC personnel concerning the transition of workload from Sacramento to Tobyhanna, it was agreed that no key decisions would be made by this group concerning the timing of the transition of that workload.
24. LTG Johnnie E. Wilson, USA, Army Deputy Chief of Staff for Logistics, personal interview, Pentagon, 3 January 1996. Subsequent to the interview, LTG Wilson was promoted to the rank of General and assigned as the Commander, Army Materiel Command (AMC), Alexandria, VA.
26. Major Yolanda Dennis, USA, Office of the Army Deputy Chief of Staff for Logistics, Maintenance Plans and Policy Directorate, personal interview, 12 December 1995.
27. Report of the Commission on Roles and Missions of the Armed Forces, "Directions for Defense," Washington, DC, 24 May 1995, 3-6 to 3-9.
28. "Public and Private Roles in Maintaining Military Equipment at the Depot Level," Congressional Budget Office, Washington, DC, July 1995, 52-54.
29. While privatization may retain jobs in the area of closing installations, it circumvents the BRAC Commission intentions to eliminate excess capacity within the force structure. As a result, those installations which were to receive the workload from closing installations now retain excess capacity which would have been eliminated by workload consolidation. The bottom line is that there will still be five full-sized air logistics centers sharing a workload which is optimal for only three air logistics centers.
35. Privatization has become a prominent topic during the course of Congressional budget hearings for FY 1997. The Secretary of Defense, the service Secretaries, the Chairman of the Joint Chiefs of Staff, and the Comptroller (Dr. Hamre) were all queried at some length during the various Congressional Budget hearings from 5-8 March 1996 concerning where DOD and the services were headed with privatization. The party line supports privatization where it makes sense while maintaining a core workload for critical items in-house in conjunction with additional infrastructure reductions (the Secretary of Defense and the CJCS indicated another round of BRAC may be necessary). In addition, all the defense leaders asked for relief from the 60/40 legislative limitation on contracting out. It appears that Congress is factionalized into three groups concerning privatization: 1) Members who have no interest for or against; 2) members who are losing depot maintenance in their state/district and therefore support privatization; and 3) Members who would gain maintenance workload based on recent BRAC initiatives and therefore oppose privatization. This change represents a fundamental shift in Congress which potentially opens up the door for a full-scale assault on the current method of depot maintenance management. With the President, the senior defense and service leadership and now important congressional leaders supporting privatization, those opposed to the concept will have a difficult time in preventing the reduction of in-house depot workload. If this occurs, the remaining depot-level maintenance workload does not justify the multiservice maintenance management overhead currently in place. Finally, there are congressional leaders (most notably Senator McCain) who are calling for another round of BRAC that will place further pressure toward consolidation.
38. Rizotte, interview. "Core" maintenance workload is not a function of the 60/40 legislation. In a subsequent discussion with Mr. Mark Van Gilst of the Department of the Air Force, Mr. Van Gilst revealed that in January, 1996, the DDMC "approved a new methodology for determining the amount of organic "core" capability which requires giving the private sector a major role [in depot-level maintenance] if risk is low and it is a best value to the government.
42. LTG Paul E. Blackwell, USA, Deputy Chief of Staff for Operations, United States Army, "America's Army . . . Trained and Ready for Victory," presentation, Pentagon, 4 January, 1996.
44. Bernard Adelsberger and William Matthews, "Clinton wants $242 billion for '97 defense," Army Times, 11 March 1996, 4.
45. LTC Todd Blose, USA, Office of the Assistant Chief of Staff for Installations, Base Realignment and Closure Office, Pentagon, Washington, DC, personal interview. LTC Blose explained recent discussions during which the Texas and Arkansas congressional delegations expressed strong support for privatization and changing the "60/40 legislation" in order to accomplish privatization. A senior member of the Alabama delegation also supports the 60/40 legislative change as long as Anniston Army Depot is allowed the opportunity to compete for the workload. These revelations represent a significant change in position of Congressional members who normally would not support legislative change, but who now see it as a preferable alternative to losing the jobs in their congressional district.
46. Steve Gibson and Sam Stanton, "Top-level pledge on McClellan jobs," Sacramento Bee, Sacramento, CA, 21 August 1995, 1. This newspaper article announces that Air Force MG John Phillips, outgoing commander of Sacramento Air Logistics Center and McClellan AFB, has been named as the new Deputy Under Secretary of Defense for Logistics (DUSDL) in the Pentagon. The article also discloses a White House and Pentagon pledge to retain the 8,700 jobs at McClellan AFB until 2001 rather than move a large number of them to Tobyhanna Army Depot and goes on to quote MG Phillips, "It is clear that privatization is the wave of the future and we've got excess capacity. Why not begin to exploit it? My job is going to be to try to facilitate that." MG Phillips' "promotion was announced by Deputy Secretary of Defense John White. MG Phillips retired from the Air Force to accept this DOD civilian position.
47. Wilson, interview. A recent decision by the Secretary of the Army (April 1996) keeps the Multiple Launch Rocket System carrier at RRAD for repair even though the program manager, DAODCSLOG, and Army Materiel Command stated that it was not part of the Bradley Fighting Vehicle System. This decision brought immediate outrage from the Alabama congressional delegation, and as with other previous BRAC directed moves, the Secretary's decision may be challenged in court.
48. Wilson, interview. In addition to these issues, U.S. Army Forces Command (FORSCOM) and U.S. Army Training and Doctrine Command (TRADOC) have been designated as "reinvention centers." This means that they can virtually ignore existing rules and regulations, but not laws, in an effort to identify or develop a more efficient method of achieving a desired end result. This may have a positive impact in the near term, but it will have a negative impact in the long term concerning loss of structure and budget for contracting. Contractors are drying up and following more lucrative contracts away from defense. There are some low density requirements previously supplied by contract for which there is no in-house capability. Now the contractor is out of the business and there is no source for the requirement.
49. Kaminski, address.p>
50. Ibid.
51. Ibid. The object is to alter the "just in case" supply mentality to the "just in time" supply mentality.
55. U.S. Department of the Army, Secretary of the Army, Memorandum to the Deputy Secretary of Defense, subject: Commission on Roles and Missions Recommendations on Restructuring Military Department Staffs, 16 October 1995.
56. Depot Maintenance Management, Office of the Deputy Chief of Staff for Operations and Plans, Roles and Missions Directorate, Pentagon, Washington, DC, undated.
57. National Defense Authorization Act for Fiscal Year 1994, Public Law 103-160, November 30, 1993, Section 342, "Limitation on Consolidation of Management of Depot-Level Maintenance Workload," 1024.
58. U.S. Department of Defense, Deputy Secretary of Defense, Memorandum, subject: Depot Maintenance Operations Policy, 4 May 1994. This memorandum was overcome by events when Congress passed what is now Section 2470 of Title 10, U.S.C., which reinstituted public-private competition for depot-level maintenance workloads. However, no new competitions have been initiated as a result. In addition, no such competition can be conducted until Defense Finance and Accounting service certifies that adequate financial systems are in place to identify and track all costs (GAO Report to Congress "Closing Maintenance Depots," March 1996, 7-8). See bibliography and endnote 69.
59. Willioam Matthews, "Private company providing goods, services to troops on Bosnia tour," Army Times, 29 January, 1996, 15.
60. Frank Cramm, Rand Corporation, "Privatizing Defense Support Services: A White Paper," February 1995, 5-7, prepared for the Commission on Roles and Missions of the Armed Forces.
61. Bradley Graham, "Privatizing Maintenance in the Military: Pentagon Bumps into Hill's Depot Caucus," Washington Post, 31 March 1996, A17. In this article, Mr. Graham quotes Senator Kay Bailey Hutchinson of the Texas Congressional Delegation and Depot Caucus member as saying, "I sense a softening in some quarters even among those who weren't ready to face this issue last year. There is an inevitability about this [privatization] that people are recognizing."
62. Marygail Brauner and Jean Gebman, Rand Corporation Issue Paper, "Is Consolidation Being Overemphasized for Military Logistics?" March 1993, 7.
63. Report of the Commission on Roles and Missions of the Armed Forces, May 1995, 3-5.
67. Depot Maintenance Management Study, V-1 to V-5.
68. Integrated Management of Department of Defense Depot Maintenance Activities, 6-5.
69. Rizotte, interview. Mr. Rizotte confirmed that the DDMC does not have the authority to compel a service to take its workload assignment decisions to the DDMC for approval on non-BRAC directed actions. The 1970 Blue Ribbon Panel Report addressed the decisionmaking process for the Joint Chiefs of Staff, which can equally apply today concerning the DDMC, when the Panel stated, on page 128, AThe process militates against the likelihood of the Joint Chiefs of Staff clearly facing up to difficult and potentially divisive issues. The repetitious, committee-type negotiations tend to reduce issues to a level of compromise which will either avoid the potential conflicts or substitute a solution that can be accepted on a quid pro quo basis." The DDMC evaded the hard question of rapidly moving workload from McClellan AFB to TOAD (for ground electronic equipment) as was directed by BRAC by delaying the move to the last possible instant. By then, the remaining jobs may be privatized precluding few, if any, in the public sector.
70. Some interviewees during the course of the preparation of this paper stated there were no guarantees that a JDMC would be any less parochial than the DDMC. While that may be possible, the real issue is putting a single leader in charge who will make the tough decisions rather than settle for mutual consent which maintains the safe, but probably less cost effective, status quo. It is difficult to argue that the Chairman of the Joint Chiefs of Staff has not become the dominant leader of the military services as a result of Goldwater-Nichols, just as the law intended. The same result, with appropriate safeguards, could be achieved with a JDMC.
71. It has been stated that BRAC has been concluded and no further cuts in depot infrastructure are planned. However, excess infrastructure (of several types) still exists in the services. Privatization will further exacerbate the problem leading to another round of BRAC sometime after the Presidential election in 1996. Because of budget pressures, a new round of BRAC will be initiated regardless of which party wins the election.
72. The structure depicted in figure 2 as the JDMC is similar in nature to a notional structure proposed in the Integrated Depot Maintenance Management Report. This is logical because all service depots generally operate on a commodity line basis. Horizontal integration of land, sea, and air systems for depot maintenance is counterproductive.
73. For further reading on the lack of progress on interservicing and depot workload consolidation, a recent GAO report entitled Closing Maintenance Depots: Savings, Workload, and Redistribution Issues published in March 1996 offers additional insight acknowledging the services' minimal efforts to consolidate or cross-service maintenance requirements.
74. Deputy Secretary of Defense White recently informed the services that they may retain savings accrued from "efficiencies" from outsourcing to use for force modernization. However, the services must fully justify their methodology for determining the savings and show where it was applied in their respective modernization account. Unfortunately, this does not preclude Congress from taking those savings from the services and directing the application of those savings against other defense or non-defense programs.
75. Discussions are ongoing within DOD and the services concerning what maintenance significant items should be retained within the depot system as "core" maintenance items for warfighting security. While it is understandable that the services consider the private sector unlikely to provide these items in time of war, it is the private sector which produces these maintenance significant items initially. As long as there is a monetary incentive for private industry to provide "warfighting equipment," these items will be available (new or refurbished). Only when such items are no longer profitable (usually at the end of their respective service life), will it then be necessary to establish an in-house depot maintenance facility to repair them if such items are still necessary in the inventory.
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