[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
AIRCRAFT CANNIBALIZATION: AN EXPENSIVE APPETITE?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
VETERANS AFFAIRS AND INTERNATIONAL
RELATIONS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
MAY 22, 2001
__________
Serial No. 107-70
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
79-974 WASHINGTON : 2002
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia ROD R. BLAGOJEVICH, Illinois
DAN MILLER, Florida DANNY K. DAVIS, Illinois
DOUG OSE, California JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky JIM TURNER, Texas
JO ANN DAVIS, Virginia THOMAS H. ALLEN, Maine
TODD RUSSELL PLATTS, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
DAVE WELDON, Florida WM. LACY CLAY, Missouri
CHRIS CANNON, Utah ------ ------
ADAM H. PUTNAM, Florida ------ ------
C.L. ``BUTCH'' OTTER, Idaho ------
EDWARD L. SCHROCK, Virginia BERNARD SANDERS, Vermont
------ ------ (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on National Security, Veterans Affairs and International
Relations
CHRISTOPHER SHAYS, Connecticut, Chairman
ADAM H. PUTNAM, Florida DENNIS J. KUCINICH, Ohio
BENJAMIN A. GILMAN, New York BERNARD SANDERS, Vermont
ILEANA ROS-LEHTINEN, Florida THOMAS H. ALLEN, Maine
JOHN M. McHUGH, New York TOM LANTOS, California
STEVEN C. LaTOURETTE, Ohio JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky JANICE D. SCHAKOWSKY, Illinois
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
DAVE WELDON, Florida ------ ------
C.L. ``BUTCH'' OTTER, Idaho ------ ------
EDWARD L. SCHROCK, Virginia
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Lawrence J. Halloran, Staff Director and Counsel
Robert Newman, Professional Staff Member
Jason Chung, Clerk
David Rapallo, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on May 22, 2001..................................... 1
Statement of:
Curtin, Neal, Director, Defense Capabilities and Management,
General Accounting Office, accompanied by William Meredith,
Assistant Director, Defense Capabilities and Management,
General Accounting Office.................................. 6
Zettler, Lieutenant General Michael E., Deputy Chief of Staff
for Installation and Logistics, U.S. Air Force; Lieutenant
General Charles S. Mahan, Jr., Deputy Chief of Staff for
Logistics, U.S. Army; and Rear Admiral Kenneth F.
Heimgartner, Director, Fleet Readiness, U.S. Navy.......... 38
Letters, statements, etc., submitted for the record by:
Curtin, Neal, Director, Defense Capabilities and Management,
General Accounting Office, prepared statement of........... 9
Heimgartner, Rear Admiral Kenneth F., Director, Fleet
Readiness, U.S. Navy, prepared statement of................ 69
Mahan, Lieutenant General Charles S., Jr., Deputy Chief of
Staff for Logistics, U.S. Army, prepared statement of...... 52
Zettler, Lieutenant General Michael E., Deputy Chief of Staff
for Installation and Logistics, U.S. Air Force, prepared
statement of............................................... 40
AIRCRAFT CANNIBALIZATION: AN EXPENSIVE APPETITE?
----------
TUESDAY, MAY 22, 2001
House of Representatives,
Subcommittee on National Security, Veterans Affairs
and International Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:03 a.m., in
room 2247, Rayburn House Office Building, Hon. Christopher
Shays (chairman of the subcommittee) presiding.
Present: Representatives Shays, Putnam, McHugh, Gilman,
Lewis, Schrock, Kucinich, and Tierney.
Staff present: Lawrence Halloran, staff director/counsel;
Robert Newman and Thomas Costa, professional staff members; J.
Vincent Chase, chief investigator; Jason Chung, clerk; David
Rapallo, minority counsel; and Earley Green, minority assistant
clerk.
Mr. Shays. I would like to call this hearing to order.
When the military mission must go forward, but a repair
part is not available, maintenance personnel are forced to take
the part from a nearby aircraft, crippling one so another can
fly. The practice is called cannibalization, and it is eating
into Army, Navy, Marine, and Air Force readiness.
The pernicious effect of longstanding inventory control
weaknesses at the Department of Defense [DOD], cannibalization
causes more problems than it solves. Maintenance crews must
perform twice the work to complete a single repair, often using
costly overtime under deadline pressure. Morale suffers;
maintainers burn out. The cycle accelerates as less experienced
personnel are more likely to resort to cannibalization as a
diagnostic tool, substituting parts just to find a problem
rather than fix it.
For forward-deployed units, some cannibalization is
inevitable, even desirable, to maintain fully mission-capable
aircraft, but the practice now reaches all the way back to
Reserve components and training units. An inefficient,
attenuated spare parts supply line cannot meet the growing
unpredictable needs of an aging air fleet.
According to the General Accounting Office [GAO],
management of the Pentagon's 64 billion spare parts inventory
has posed a high risk of waste and abuse since 1990. In March,
Comptroller General David Walker told this subcommittee, DOD
``continues to spend more than necessary to procure and manage
inventory,'' yet still experiences equipment readiness problems
because of a lack of key spare parts. Aircraft mission-capable
rates continue to decline.
So we asked GAO to assess the extent to which the services
resorted to cannibalization over the past 5 years, why, and
what was being done to minimize the costly practice.
Unfortunately, efforts to address the problem have been
hampered by a failure to define the problem. The Air Force
measures cannibalizations per 100 flights or sorties while the
Navy and Marine Corps log so-called ``canns'' per 100 flight
hours, making comparisons and accurate totals all but
impossible. Up to half of all Navy cannibalizations may go
unreported. The Army defines three different types of
cannibalization, but does not collect servicewide data on any.
Nevertheless, reports and anecdotes are legion as to the
extent and impact of hollowing out perfectly good aircraft so
that others can fly. Two years ago, when we visited Seattle's
Whidbey Naval Air Station, pilots in that reconnaissance
squadron said less than half their 12 aircraft were usually
operational, and cannibalization was not the exception but the
norm. Chances are the EP-3 aircraft sitting on the tarmac on
Hainan Island needed parts scavenged from one or more planes to
be ready to fly.
Air National Guard units struggle to keep more than half
their A-10 Warthogs mission-capable at any given time. Routine
cannibalization is required to maintain even that level of
readiness.
Figuratively, robbing Peter to repair Paul, cannibalization
at least doubles the risks and costs of straightforward
maintenance. The plane being repaired gets a used part. The
cannibalized plane then gets a new part it never should have
needed. Overworked aircraft maintainers toil twice as hard,
taking at least one plane out of service for every one they
fix.
Unchecked aircraft cannibalization masks systemic inventory
control weaknesses. It is an appetite the military services can
no longer afford to indulge.
Testimony today from GAO and from the Navy, Army, and Air
Force offer some hope more spare parts are getting to the right
place at the right time to meet needs of a fully mission-
capable force. We truly welcome their testimony and we look
forward to their continued efforts to address this problem.
At this time I would like to recognize the ranking member
of the committee, Dennis Kucinich.
Mr. Kucinich. I thank the chairman, and I want to welcome
our distinguished witnesses from the General Accounting Office
and from the three services.
As Mr. Curtin indicated in his written testimony,
cannibalization or raiding an aircraft's parts in order to fix
another aircraft is a practice that wastes time and money,
reduces morale and personnel retention, renders expensive
equipment unusable, and risks mechanical side effects. Clearly,
it is an issue that needs addressing.
To do so effectively, we must examine cannibalization in
the context of larger, more fundamental questions. The first is
obvious: Why are maintenance crews pulling items off aircraft
rather than from stock supply shelves? Why is there a shortage
of spare parts?
GAO's examination of the Department of Defense's inventory
management practices sheds light on this question. In 1990, GAO
issued a report describing Federal Government programs with the
greatest potential for waste, fraud, and abuse. This was the
first of what GAO called its high-risk series. In the 1990
report, GAO said that management of DOD inventory was one of
those high-risk programs.
Since then, GAO has issued updates of its high-risk report
every 2 years, and DOD inventory management has been on the
list every time. In January, GAO issued its update for the
107th Congress. Again, GAO said the Pentagon's inventory
management process was ``one of the most serious weaknesses in
DOD's logistics operations.''
GAO found that about half of DOD's $64 billion inventory
exceeds war reserve or current operating requirements. GAO also
concluded that, as of September 1999, the Department ordered
$1.6 billion worth of inventory not based on current
requirements. Not only is DOD ordering too much inventory, but
it is ordering items it does not need.
What about aircraft cannibalization? The services say they
do not have spare parts. This is clearly not due to a lack of
funding since DOD is wasting billions on unnecessary items.
What accounts for the so-called spare parts shortage then? In
its January report, GAO came to this conclusion: ``The aircraft
spare part shortages were due in part to DOD's weaknesses in
forecasting inventory requirements and the failure of DOD's
logistics system to achieve expected inventory management
improvements.''
This is the same problem that has plagued the Pentagon
since 1990. Indeed, U.S. Comptroller General David Walker said
the same thing when he testified before us in March, but more
bluntly, ``DOD may have the item. They may not know where it is
or they may not know how many they have. And what's the result
of that? They may order it when they don't need it. They may
not be able to access it when they need it for operational
purposes.''
One would think that, after more than a decade, improvement
would be imminent. But at the same March hearing, Chairman
Shays asked David Warren, a GAO Defense Specialist, about DOD
initiatives in this area. Mr. Warren replied that the
likelihood was ``very great'' that these reforms were destined
to fail.
A more fundamental, and perhaps more important, question
concerns DOD's overall aircraft acquisition strategy. In its
written testimony, GAO raised the problem of aging aircraft and
its relationship to cannibalization. As aircraft age, they tend
to break more often. They take longer to inspect and maintain,
and they're less available for operations. One can see how
cannibalization and its attendant negative effects could
increase as a result.
The Pentagon's current plan for acquiring replacement
planes, however, will not reduce the average age of each
aircraft. As GAO has pointed out elsewhere, the Pentagon is
investing in extremely expensive programs that will yield very
few aircraft. The F-22 program, for example, originally planned
for the purchase of 880 planes at $40 billion. Because of the
Pentagon's inability to accurately predict costs or meet
testing hurdles, we now expect fewer than 339 planes, and these
will cost over $64 billion. Rather than updating our fleet, the
F-22 purchase will actually increase the average age of each
aircraft.
But let me reiterate: The Pentagon is spending $24 billion
more than it planned to buy 64 percent fewer planes. It is
spending over $60 billion for an older arsenal of fighters, one
more prone to the management problems that prompt
cannibalization.
So we also need to ask why the Pentagon is proceeding on
this course. If these purchases are simply to result in a fleet
that breaks down more and flies less, does it not make sense to
buy more aircraft that, although less sophisticated, may be
more reliable? Currently, defense spending is approaching the
average levels of the cold war in the 1970's. Yet, the Pentagon
is seeking billions of dollars more. Congress deserves
reassurance that this money is going toward a force that is
more effective, not less.
My point, then, is that our examination of the problem of
cannibalization must necessarily take place in the context of
the Pentagon's overall mode of operation and culture.
Cannibalization and other such problems are the symptom of
systemic issues, and these need to be addressed.
I thank the Chair.
Mr. Shays. I thank the gentleman and at this time recognize
Ron Lewis, the gentleman from Kentucky. Mr. Gilman.
Mr. Gilman. Thank you, Mr. Chairman, and thank you for
conducting this very critical hearing. I want to commend our
committee for examining the increasingly widespread problem of
aircraft cannibalization in the Nation's military, and I hope
we will also look at the cannibalization of equipment in other
portions of our Armed Forces.
Over the last 10 years, our military forces have had to
function in an environment of increased overseas deployments
and reduced operational budgets. As operational tempo has
increased, so has the frequency of malfunctions and the
breakdowns in sensitive, high-maintenance military equipment,
particularly aircraft, but not limited to aircraft.
Faced with the lack of extra spare parts, military forces
in the field are often forced to cannibalize fully functioning
aircraft in a particular unit to keep the rest of the aircraft
in that unit operational. This has had the effect of reducing
our overall strength in our airwings, subsequently affecting
their ability to effectively carry out their missions.
Not only does cannibalization affect our airwings, as I
indicated, but it has also had an impact upon the effectiveness
of our anti-drug war with regard to equipment which the DOD
furnishes to our drug-producing nations' police agencies. This
problem has been pervasive throughout all of the service
branches and has worsened in recent years. A tank commander in
our Germany's forces recently commented to me that similar
cannibalization in our tank equipment, where our tanks had to
be cannibalized due to a lack of spare parts, affected their
overall efficiency and capability.
I look forward, Mr. Chairman, to hearing the testimony of
today's witnesses in the hopes that we can begin to find a
workable solution to this ongoing cannibalization problem,
which dilutes our military strength, dampens the morale of our
forces, and places unnecessary risks on our Armed Forces
personnel. Thank you, Mr. Chairman.
Mr. Shays. Thank you, Mr. Gilman. I appreciate your being
here.
The vice chairman of the committee, Mr. Putnam.
Mr. Putnam. No, thank you, Mr. Chairman.
Mr. Shays. OK. I would like to recognize at this time John
McHugh, who also sits on the Armed Services Committee.
Mr. McHugh. Thank you, Mr. Chairman. I don't have a
prepared statement, but I want to echo the comments of my
colleague from the great State of New York, Mr. Gilman, in
emphasizing the importance of this hearing. I want to thank
you, Mr. Chairman, for the leadership in convening this, I
think, very, very important session.
The chairman was kind in mentioning I am a member of the
Armed Services Committee. I have the honor of serving as
chairman of that Personnel Subcommittee on that particular
body. Obviously, anything, as the GAO report suggests, that
affects the morale of our men and women in uniform is important
to me, but this is a wider issue. This is an issue of, as Mr.
Kucinich said, our duty to the taxpayers, but I think even more
to the point, it is a vital issue of our national security and
the safety of the men and women that we ask to serve our
interests all across this planet with respect to the equipment
that they either work on or utilize in the pursuit of that
national interest.
So, Mr. Chairman, you are to be thanked for the effort to
focus on this, to ensure that where there are systemic problems
not arising out of a budgetary shortfall, that we take every
step to resolve them for the betterment of all parts of the
system, from the people of this country to the people who serve
this country. So, again, Mr. Chairman, my appreciation, and I
yield back.
Mr. Shays. Thank you very much. I appreciate all the
Members who are here.
At this time we will call our first panel and recognize
Neal Curtin, who is the Director, Defense Capabilities and
Management, General Accounting Office, accompanied by William
Meredith, Assistant Director, Defense Capabilities and
Management, GAO.
Gentlemen, I would like to swear you in, and then we will
just do some business. If you would just stand and raise your
right hands--is there anyone else who might testify with you?
Mr. Curtin. I don't think so.
Mr. Shays. OK.
[Witnesses sworn.]
Mr. Shays. For the record, both our witnesses have answered
in the affirmative.
I think we have a statement from you, Mr. Curtin, but both
will participate in answering questions.
If I could just deal with the requirement of asking
unanimous consent that all members of the subcommittee be
permitted to place an opening statement in the record and that
the record remain open for 3 days for that purpose. Without
objection, so ordered.
I ask further unanimous consent that all witnesses be
permitted to include their written statement in the record, and
without objection, so ordered.
Mr. Curtin, Neal Curtin, we welcome your testimony, and we
will do 5 minutes and then we will roll it over 5, but we would
like you to be done before the 10 minutes.
STATEMENT OF NEAL CURTIN, DIRECTOR, DEFENSE CAPABILITIES AND
MANAGEMENT, GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY WILLIAM
MEREDITH, ASSISTANT DIRECTOR, DEFENSE CAPABILITIES AND
MANAGEMENT, GENERAL ACCOUNTING OFFICE
Mr. Curtin. Thank you, Mr. Chairman and members of the
subcommittee. It's a pleasure to be here today to talk about
this issue, and I share your concern about the importance of
this and hope that this hearing will help get at some of the
bottom-line issues here.
As you said, my testimony today is based on work that was
requested by the subcommittee to look at four aspects of
cannibalization as it relates to military aircraft. Mr. Gilman
is right that it's not just an aircraft problem, but the focus
of our work on aircraft, I think, is kind of keying on the main
issues right now.
We looked at four things: the extent that the military
services are using cannibalization to repair aircraft, the
impacts that cannibalization has and the reasons for it, and
what the services are doing to address it. We should have a
report on this later this summer, hopefully, with
recommendations aimed at tackling some of the issues that we'll
discuss today. But we're in a good position now to summarize
our findings for the committee and this hearing today.
Cannibalization, as you said, is taking a part off of one
aircraft to replace a broken part on another aircraft. The
chart that's on page 7 of my prepared statement, and that we've
blown up over here, I think illustrates it pretty well. It
illustrates, too, one of the adverse impacts of cannibalization
in that you've doubled at least the workload, and we'll talk
about how it may be more than doubles the workload because of
some of the things that happen during that cannibalization
process. I'll talk at some length about this adverse impact. I
think that's really the key to our findings.
But let me start out with a few pieces of data on what we
found regarding the extent and causes of cannibalization. We
looked at the Army, Air Force, and Navy, and the Navy data
included Marine Corps data, for the last 5 years, fiscal year
1996 through 2000. And for just the Navy and Air Force
aircraft, we found a total of 850,000 reported cannibalization
actions during that 5-year period. That's about 170,000
cannibalizations per year. I mention that's just Navy and Air
Force.
The reason the Army is not included in those numbers is
that they do not collect and consolidate complete data on
cannibalizations in a way that can be used at headquarters
level. Not only does that make it impossible for analysts like
us to get a handle on what's going on in the Army, it seems to
me it makes it pretty difficult for Army managers to understand
and address the issue as well.
But, even in the other services, even in the Navy and
Marines and Air Force, we found indications that the data may
be underreported. So that 850,000 may not be all the
cannibalizations that are going on.
Two Navy studies in the past couple of years have
highlighted the underreporting. In fact, one of the studies
said that it may be as much as half; that the reported
cannibalizations may only be half of what's actually going on
out there.
Why the level of cannibalization? What's causing this? The
main thing that is leading to this is really the two ongoing
phenomenon here. One is the push, and the important push, for
readiness to meet training requirements, to meet operational
requirements, to keep OPTEMPO at the levels that we've expected
out of our service, on the one hand. Then, on the other hand is
this supply system which is not being as responsive as it needs
to be to provide the spare parts to maintain those high
operational tempos.
If you didn't care how high your readiness was, when a part
broke, you'd wait until somewhere along the way the supply
system feeds it. On the other hand, if the supply system was
working well, you could maintain high readiness without having
to resort to cannibalization. But those two things together are
what drives the bulk of the cannibalizations.
Now why aren't spare parts available? As some of the panel
members have already pointed out, GAO's tried to tackle that
inventory management problem in the military services for a
long time, and spare parts, of course, is a big part of that.
Since 1990, we've had it on our high-risk list, and as recently
as earlier this spring, the Comptroller General testified
before this committee on the continuing problems of inventory
management. It's on the high-risk list again, and it's one of
the key management challenges facing the Department. The
ultimate answers are still not within our reach, as far as we
can tell.
There are other reasons, too, for cannibalization besides
the spare parts systems: Inexperienced or inadequately trained
maintenance personnel, outdated maintenance manuals, lack of
testing equipment in many cases, all contribute to the
cannibalizations.
Let me return to the effects related to cannibalization
because I think these are really the key. The good effect of
them is that they do help maintain readiness levels. They do
help to get planes in the air at the time the pilots are ready
to do a training mission or an operational mission. But it
comes at a very high cost, and it's kind of a hidden cost. The
extra maintenance hours that were recorded by Air Force and
Navy, again just Air Force and Navy, during that 5-year period
associated strictly with cannibalizations total about 5.3
million hours. That's the equivalent of almost 500 additional
maintenance personnel working full time during that 5-year
period. That cost doesn't necessarily show up anywhere in the
balance sheets. We don't pay overtime to the maintenance
personnel.
So what you've got is an extra workload on top of a work
force that's already somewhat shorthanded and already stressed
at fairly operational tempo levels. There have been several
studies that have documented the adverse morale impact that
has, and, in fact, that it can contribute to retention problems
among maintenance personnel.
You know, this extra work, sometimes late at night, on
weekends, takes a toll on a work force, especially when they're
returning from a deployment. The Navy has a regular 6-month
deployment cycle, and even in the Air Force now, and the Army
as well, because of the operations going on overseas, soldiers
are frequently deployed. When they come home, at their home
station they want to spend some time with their families, and
instead, in many cases they're working long hours at their home
stations.
While we haven't been able to make a direct link from
cannibalization to retention problems, because there's a myriad
of things that affect why someone decides to stay or leave the
services, clearly, cannibalizations are a factor that's
contributing to the frustration that's out there among the work
force.
There's some other adverse impacts of cannibalization, too.
Anytime you take parts off an aircraft, you risk damaging not
only those parts, but parts around it. Sometimes you have to
remove other parts to get at the part you really need, and you
run the risk of additional rework and damage to those as well
and to the wiring that connects it all.
Moreover, when aircraft are cannibalized for long periods--
and we have a couple of examples in my statement and on the
posterboards over here--they can become virtually unusable
without a major rebuild, and that's what happened to the F-18's
pictured here. Some of them have been in cannibalization status
for years, not just months but years. One of them had over 400
parts removed for cannibalization and eventually had to be
actually shipped by truck to the depot to be rebuilt.
The services generally consider cannibalization what I'd
call a necessary evil. They'd rather not have to do it, but
until they get the spare parts they need and get the system
feeding them what they need when they need it at the place they
need it, they have an incentive to do what's necessary to
maintain adequate levels of readiness.
Service policies all call for minimizing the use of
cannibalization, but there are really no incentives or guidance
to meet that goal. The real incentives are on the other side to
push for that high maintenance level, that high readiness
level.
Mr. Chairman, let me stop there. I think that summarizes
the key points of my statement. We would be glad to take
questions from the panel.
[The prepared statement of Mr. Curtin follows:]
[GRAPHIC] [TIFF OMITTED] T9974.001
[GRAPHIC] [TIFF OMITTED] T9974.002
[GRAPHIC] [TIFF OMITTED] T9974.003
[GRAPHIC] [TIFF OMITTED] T9974.004
[GRAPHIC] [TIFF OMITTED] T9974.005
[GRAPHIC] [TIFF OMITTED] T9974.006
[GRAPHIC] [TIFF OMITTED] T9974.007
[GRAPHIC] [TIFF OMITTED] T9974.008
[GRAPHIC] [TIFF OMITTED] T9974.009
[GRAPHIC] [TIFF OMITTED] T9974.010
[GRAPHIC] [TIFF OMITTED] T9974.011
[GRAPHIC] [TIFF OMITTED] T9974.012
[GRAPHIC] [TIFF OMITTED] T9974.013
[GRAPHIC] [TIFF OMITTED] T9974.014
[GRAPHIC] [TIFF OMITTED] T9974.015
[GRAPHIC] [TIFF OMITTED] T9974.016
[GRAPHIC] [TIFF OMITTED] T9974.017
[GRAPHIC] [TIFF OMITTED] T9974.018
[GRAPHIC] [TIFF OMITTED] T9974.019
[GRAPHIC] [TIFF OMITTED] T9974.020
Mr. Shays. Thank you. It's my intent to start with Mr.
Gilman and then we'll go to Mr. Kucinich and then we'll go to
the other Republicans.
Mr. Gilman. Thank you, Mr. Chairman. And, Mr. Curtin, we
thank you for your testimony.
Why is the full magnitude of cannibalization not known? The
GAO report points out that we don't have any full information
with regard to the extensiveness of cannibalization. It would
seem to me that would be a very critical issue that we ought to
be able to resolve quite quickly.
Mr. Curtin. I agree. First of all, you have the Army who
captures some of this data at the local level, but we're not
convinced that the local units capture it all either, but they
don't surface it in any way that's aggregated or could be used
for management purposes.
And then in the other services, what we have seen, even
though the Navy and the Air Force have a system for capturing
data, we've seen many cases, anecdotal for the most part, but
also based on prior studies, that the data just doesn't get
entered into these systems sometimes.
Mr. Gilman. Well, why are there different measures for
cannibalization? It would seem to me that, if this is a
critical issue, there ought to be a standard by the Department
of Defense for all of the agencies and for all of the
departments, and to have similar methods of reporting, similar
criteria.
Mr. Curtin. Yes, it makes a lot of sense. There are some
reasons why the Navy and Air Force do it differently, and you
may want to explore that with the next panel. It would be a lot
better from an OSD, from a Secretary of Defense management
level, to have a common way of looking at these across all the
services; there's no question about it.
Mr. Gilman. Well, who in the Defense Department is in
charge of all of this?
Mr. Curtin. Well, I'm not sure there is much of an OSD-
level focus on it. There are readiness aspects to this. There
are logistics aspects to it, and it gets fragmented, frankly.
The services have been left for the most part to deal with
cannibalization as they see fit. Most of the services have
chosen to delegate authority and guidance and everything on
cannibalization down to lower levels, leave it up to the local
commanders to decide how much cannibalization to do, with just
that general policy guidance that says try to minimize it. And
the result is what we've seen.
Mr. Gilman. Mr. Curtin, are you telling us that there's no
one in the Department of Defense who has the responsibility of
making certain that equipment is not being cannibalized?
Mr. Curtin. Unless you're aware of anyone?
Mr. Meredith. No, I'm not aware of any central control.
Mr. Gilman. No central control?
Mr. Meredith. No central control that I'm aware of.
Mr. Gilman. That's a major failing, and, Mr. Chairman, I
hope we look into that aspect.
I recently visited an auto parts central agency for the
whole Northeast, and I was amazed how they can get parts out to
their dealers, and there are hundreds of thousands of dealers
nationwide, parts within a 24-hour period. It would seem to me,
with the money we spend in defense, we ought to be able to get
parts out across the world quite quickly to prevent
cannibalization, and I would hope you could come up with some
recommendations for us. We appreciate the report and we
appreciate your review, but maybe you can also provide some
good, sound recommendations to the Department of Defense to
correct this.
We have been upgrading Vietnam era Huey helicopters to new
Huey II upgraded status in our drug war in Columbia. Yet, the
poor condition of the Hueys has made these upgrades very
costly. The equipment is costly in itself, and they have been
slow and inefficient. In addition, their supplying 1952 Korean
era 50-caliber ammunition to protect the Blackhawks, new
Blackhawks, where we spend millions of dollars on that
equipment in Columbia, hasn't worked either.
So something is wrong with the kind of supplies we're
sending out. Something is wrong with the kind of spare parts
for equipment. As I mentioned earlier, and you have re-
emphasized, it does not apply to any one segment of our
military forces, but it is across the board. I think if we had
a full total of the cannibalizations and the cost to our Armed
Forces, I think it would be something that would make this even
more critical, and should be brought to the attention of our
Chief Executive.
Thank you, Mr. Chairman.
Mr. Shays. I thank the gentleman. Mr. Kucinich.
Mr. Kucinich. Thank you very much, Mr. Chairman.
I, first, want to for a moment reflect on things that were
said by two colleagues here. What Mr. McHugh had to say
concerning the effect on the men and women who serve is
something that needs to be kept uppermost in mind. It seems to
me that, at least on the ground level, this would drive
mechanics crazy. Did you spend much time talking to mechanics?
Mr. Curtin. Yes, we got up to several squadrons, and you're
right, when you get down to that level, you hear the griping
coming out, and I have to be careful sometimes of griping----
Mr. Kucinich. I understand. These are my constituents.
Mr. Curtin [continuing]. But a lot of it's real.
Mr. Kucinich. But I also have to say that mechanics are the
ones who would know exactly what is going on because they have
to deal with the reality of it, and in a way it is
counterintuitive to the working mechanic: On the one hand,
you're told to keep a plane in repair and then, on the other
hand, you're told to start picking it clean, so that you can
provide for others. At the same time, the real issue is, you
know, what about the parts, which goes back to what Mr. Gilman
said.
We are urged in so many different ways to try to run
government like a business, at least to try to have business
principles of management and inventory. I think Mr. Gilman put
it well, but I have to say that if we're talking auto parts or
Auto Zone, or any of those companies that stock parts, you get
them like that. It seems to me, with the defense budget being
what it is, we might want to transit to a more sensible
inventory management approach.
Mr. Curtin. A lot of the problem seems to be in the high-
cost parts that don't break very often. Those are the tough
ones. How much are you willing to invest in keeping this part
in your stocks when it may or may not break very often? As
planes get older, and those parts that never used to break
before now they're starting to break because the fleet is a lot
older than we expected it to have to be, those become the real
sticky problems.
Mr. Kucinich. Well, is it fair to say that a large portion
of the cannibalizations occur in tactical-type aircraft?
Mr. Curtin. Yes. Yes, of course, you have 1,200-and-some F-
16's in the Air Force. So you have so many planes that you do
get a high number of cannibalizations associated with that. The
rate of cannibalizations per flight for the F-16's is not one
of the highest one. The F-15's are above average in rate and in
total.
Mr. Kucinich. You're familiar with the report that GAO
issued in February, ``Tactical Aircraft Modernization Plans
Will Not Reduce Average Age of Aircraft''?
Mr. Curtin. Yes.
Mr. Kucinich. And it basically described the Pentagon's
future acquisition plans and it found that, ``the Navy and Air
Force will not be able to procure enough new tactical aircraft
to reduce the average age of tactical aircraft.'' Rather than
reduce the average age, Pentagon plans will increase it, isn't
that right?
Mr. Curtin. Because you're buying fewer of the more
expensive new ones and you still have a lot of the old ones in
your inventory. So, yes, the average age will--all the old ones
are just getting older.
Mr. Kucinich. And we have three different aircraft
development programs going on right now, is that right?
Mr. Curtin. As of today. We'll see what the Secretary of
Defense comes up with in his strategy studies.
Mr. Kucinich. In the next minute that I have, in the case
of the F-22, for example, even if everything works out as
planned, we will not be able to reduce the average age of
aircraft, correct?
Mr. Curtin. I believe that's what the report said, yes.
Mr. Kucinich. Well, page 11 of your report, ``As aircraft
age, they tend to break more often, take longer to inspect and
maintain, and they're less available for training and
operations.'' So if nothing else changes in the types and
number of aircraft the Pentagon plans to acquire, is it logical
to assume that the problem of cannibalization could become even
more aggravated?
Mr. Curtin. Yes, if everything else stays as it is now, no
question.
Mr. Kucinich. So, in your opinion, could cannibalization be
more likely for future planes, such as the F-22, which are
extremely complicated technologically and which are extremely
expensive compared with other planes?
Mr. Curtin. Well, I think that's the key. We've got to
avoid that. We've got to find--we've got to fix this system. We
can't go another 10 years or 20 years with the inventory system
shortchanging everybody.
Mr. Kucinich. But if we don't fix it, that is what we're
headed for, right?
Mr. Curtin. That's where we're headed, exactly.
Mr. Kucinich. So you think it is important that we look at
these future aircraft programs when reviewing the
cannibalization problem?
Mr. Curtin. No question.
Mr. Kucinich. Do I have another minute here?
The February GAO report recommended that DOD in its 2001
quadrennial defense review ``consider alternatives to the
current tactical aircraft modernization plans.'' One
alternative, I suppose, would be cutting the F-22 program or at
least scaling it down? Is that a possibility?
Mr. Curtin. It appears to be on the table, but I don't know
how much of a possibility----
Mr. Kucinich. OK. I thank the gentleman.
Mr. Shays. Mr. McHugh.
Mr. McHugh. Thank you, Mr. Chairman.
Gentlemen, I understand you have not completed your report
as yet, and that makes the discussion of final conclusions
somewhat difficult, somewhat problematic. So let me start with
a general question. When you do issue your final report, to
what extent do you envision yourselves being able to, aside
from assessing how each service handles the reporting, your
very accurate determination of the effects of it, are you going
to be able to determine between those reasons that are fiscally
driven and those that are systemic or management-driven?
Because that seems to me to be a very key difference here
in terms of what do we need to do both as a subcommittee and as
a Congress to help resolve this. Money, it's either easy or
hard, you know. We understand the cause of that. Systemic
issues are quite something else.
Mr. Curtin. Yes. It's going to be very difficult for us to
quantify what happens if you put ``X'' dollars into the system
in one end, what the improvement in cannibalization will you
get at the other end. I think our focus is going to be on the
management side. Regardless of how much money the Congress
chooses to give the Department of Defense, it should be spent
on the right things and in the right way, and that's where the
improvements in the management system for supply, for inventory
on spare parts, but also in tackling this cannibalization
problem more directly.
Most of the efforts underway in the services now, to the
extent there are efforts, are aimed at the inventory system,
aimed at fixing the long-term fixes to the inventory system.
There's nobody focusing too much on what to do about
cannibalization in the meantime. Until that supply system
starts providing you better responsiveness on the parts you
need, what do you do about the cannibalization? That's where
we'd like to see some more attention paid, and it needs to be
probably at the--certainly at the service level, maybe at the
OSD level, to really get a handle across the military on what's
going on here. So a strategy for tackling, you know, other
things we can do in the meantime to fix this cannibalization,
because of the impact it has on the personnel.
Mr. McHugh. So the suggestion that I hear you making is
that this is not just a supply management problem in that there
are apparently reasons for cannibalization at the base level,
at the facility level, that may have nothing to do with the
availability of the part?
Mr. Curtin. Yes, there really are, and the extent of that
we don't know because the data just isn't there. The reasons
for cannibalization aren't always recorded. The Navy does a
little better job on reasons. The Army, of course, doesn't have
anything. The Air Force has some data.
Mr. McHugh. I don't mean to interrupt you, but I'm on the
yellow light here.
Can you give me just a couple of ideas, a couple of
thoughts as to what those reasons for cannibalization at the
management level may be other than inventory?
Mr. Curtin. Something we would call cannibalization for
convenience happens quite a bit. A pilot is ready to taxi out
for a training flight and something breaks on the plane. If it
can be fairly quickly fixed, they'll try to replace that part
right there on the flight line. Even if that part is in the
system, it may be right on the base, it may be a mile away at
the other side of the base in the hangar, but the plane is out
on the flight line, they'll pull it off a nearby plane and fix
it, get that pilot out. So he gets his training slot. It's kind
of a quick turnaround. We call it a cannibalization for
convenience.
Mr. McHugh. I don't know as a pilot would agree that's
convenience. You lose your training slot and you've lost a
lot----
Mr. Curtin. Yes.
Mr. McHugh [continuing]. But I understand. I understand
your point.
Mr. Curtin. We want to hit those training requirements.
Mr. McHugh. Yes, I understand.
Mr. Curtin. Other things that happen: Diagnostics,
sometimes the maintenance people have never seen this kind of
problem or they're new; they haven't been familiar with that
kind of problem. They're not sure if that part's broken or not.
They'll take a part off a working plane--they know that part
was working--and try that, plug that in, see if that fixes the
problem. So instead of being able to figure out the problem,
they do some cannibalization to diagnose it.
A big problem with test equipment out there and a fair
amount of cannibalizations seem to be happening because the
test equipment is not giving you the results you need, and you
need to find some way of fixing the problem. So you pull a part
you know is working. Those kinds of things are going on.
Mr. McHugh. Refresh my memory; when will the final report
be done?
Mr. Curtin. This summer, probably by July, is our target.
Mr. McHugh. I'm looking forward to seeing it. Thank you.
Thank you, Mr. Chairman.
Mr. Shays. I was going to recognize Mr. Putnam, but, Mr.
Gilman, did you want to----
Mr. Gilman. Just one more question, if you would.
Mr. Shays. Sure.
Mr. Gilman. I note in your testimony you talk about the C-
5's, and I happen to have a large squadron of C-5's up at
Stuart Airport in Newburgh. They provide all the logistics of
our manpower overseas, and yet you rate them as one of the
highest needs for maintenance. I note here in your testimony
that--well, your chart shows that they have 49 percent of
cannibalization rate in the year 2000, and it was 51 percent in
the year 1999. You say for the C-5's alone there are 31,400
manhours used to perform cannibalization and 126 aircraft. When
you add up the cost of all of that on this kind of equipment,
where we've spent hundreds of millions of dollars for each
unit, billions of dollars, as a matter of fact, each unit, it
just doesn't make economic sense to allow this to continue. I
hope you can make some very critical recommendations for DOD in
your subsequent report.
Thank you, Mr. Chairman.
Mr. Shays. I thank the gentleman. I might point out to the
gentleman that we are seeking to have a meeting with the
Secretary because we think this is a gigantic problem. We think
that security clearances, the backlog that we have there is
just truly outrageous, and we need to wake up some people in
DOD to get them to tell us what they need us to do to make a
difference.
Mr. Gilman. Thank you, Mr. Chairman. I would like to work
with you on that approach.
Mr. Shays. Thank you.
Mr. Putnam.
Mr. Putnam. Thank you, Mr. Chairman. Thank you, Mr. Curtin,
for your work on this. I would like to followup on some of Mr.
McHugh's questions about the difference between an episodic or
a systemic problem with inventory management.
One of your potential causes for this cannibalization rate
was a lack of training, and that is something that we spend an
awful lot of time in the Congress talking about. To what degree
have you determined that lack of adequate training for
maintenance personnel contributes to this?
Mr. Curtin. Yes, I don't think we can quantify that, but
what we do know, that there is a shortage of personnel in
aviation maintenance, especially at the senior levels. They're
the levels that actually train the younger mechanics as they
come on. Without that good senior leadership, you don't get the
on-the-job training that you need at the lower levels. With the
turnover they have been experiencing and the loss of staff,
they're in kind of a constant flux of bringing in new people. I
mean, the basically training, I think, that's done of mechanics
is fine, but where you really learn is on the job, and that
part is suffering a little bit.
Mr. Putnam. Are you able to determine the parts that are
most frequently cannibalized? You make the distinction between
the small bits and then you take it up a notch if you can't--
you know, these aren't Ford Explorers. There's only 1,200 F-
16's spread around the whole planet. Having a back storeroom
full of carburetors for a Ford Explorer is very different than
having one full of F-16 replacement parts. So at what point do
we strike the balance between sound, just-in-time inventory and
having the parts? And how many of these parts are routine or,
for an F-16, cheap replacement parts? And how many are
substantial, very expensive, very technical types of pieces of
equipment?
Mr. Curtin. See, part of the problem in getting a good
handle on this is that there is no one answer. There is no
single solution to it. There are a lot of small, cheap parts
that we ought to have handy; we should never have to
cannibalization some of the nickel-and-dime things. But, on the
other hand, with this aging fleet, some parts that just have
never broken--the way you get spare parts in the system is
through a demand history. Parts break; you order them; the
supply system produces them. Part of the problem is that things
are breaking now because of the age of the aircraft that just
haven't broken before or haven't broken in the numbers that
they're breaking now.
And the other side of this aging problem is that many of
the manufacturers who originally provided the parts for these
planes have gone out of business or have left the defense
industry, have gone into other things, and it's hard to find
anybody willing to make some of these parts anymore. So it's
very complex. To say how much are these tough ones where you
don't have a producer out there who can supply them, it's
almost case by case, and that's what's made it hard--frankly,
that's what's made it hard for DOD to solve this problem, is
because it is not easy when----
Mr. Putnam. I mean, did you evaluate, and if you did, is
there a difference between Guard and Reserve units and active-
duty units in terms of their cannibalization rates?
Mr. Curtin. Well, we've focused just on the active, and I
can't imagine that the Reserves are in any better situation,
and sometimes you see the Reserves getting resourced at lower
levels, depending on what their role is. So they may have even
a worse problem, but this focused on the active.
Mr. Putnam. And one final question, because I've got the
yellow light, too: The B-1B requires the most cannibalization
per hundred sorties. Is that because there was such a short
production run? I contrast that with the B-52, which has a much
lower rate even though it is considerably older. Is that
because there are so many B-52's around in the bone yards to
provide spare parts?
Mr. Curtin. Well, it's probably a good question for the Air
Force after me, but I would make one comment. I think the bulk
of the problems with the B-1B are in the electronic counter
measures systems, and I can remember GAO reports back on the
original B-1A program when it was first killed that the
electronic counter measuring system was the problem system in
development and all the way through. And the same thing
happened with the B-1B. The electronic counter measures system
never quite worked the way it was supposed to and was always a
problem, and that seems to be where most of the
cannibalizations are now. It's just been a problem system, a
problem component.
Mr. Putnam. Thank you. Thank you, Mr. Chairman.
Mr. Shays. Thank you.
Mr. Curtin, I would like you to just explain to me why it
is so difficult for us to get a handle on inventory in general
and this whole issue of cannibalization. What becomes the
disincentives to resolving this issue?
Mr. Curtin. There's a couple of things going on. One,
you've got the individual services who have developed their
systems years ago, back--the system is not too different than
it was for World War II and thereafter. So you don't really
have as much of an OSD level, as much of a DOD inventory system
as you do individual services, and that gets wrapped up in
title 10 and all the responsibilities of the services.
Mr. Shays. That is one issue. What is another one?
Mr. Curtin. I think it's, to some extent, the size of the
Department of Defense. There's no other corporation in the
world that's got the number of activities, the number of pieces
of equipment, the management challenges that the Department of
Defense has. Some of it has to do with the way we purchased
equipment, the way we acquire weapons systems, and what you
see, even with one aircraft, the F-18 aircraft, there must be
20 different lots of F-18's that have been built over the
years, and each one has some common parts, but brings in new
parts. So you've got a multiplier effect of the number of
things that can go wrong even within one squadron. Certainly
within a wing you have old planes, new planes, all within one
wing. So it's all those kinds of things----
Mr. Shays. Is another factor that we just don't have that
many of any particular--I mean, I look at the analogy of an
automobile and how we can get it out, but there is an incentive
to have a certain number of parts on hand because you know you
are going to send out hundreds each day. But I am just
wondering, does this make it more of a challenge, if you only
have 200 planes or 300 planes?
Mr. Curtin. It is a challenge because different parts break
at different times on different planes. It is not that
predictable, unfortunately.
Mr. Shays. Well, that is another issue. It is not
predictable, but I am asking something else. See, you have
given me another issue; it is not predictable. But the other
issue is, does having so few of the particular aircraft make it
more difficult rather than----
Mr. Curtin. Yes.
Mr. Shays. OK.
Mr. Curtin. No question, yes.
Mr. McHugh. Mr. Chairman.
Mr. Shays. Yes?
Mr. McHugh. Would you yield for 1 second?
Mr. Shays. Sure. Definitely.
Mr. McHugh. I think you have raised a very important point.
I wanted to ask the gentleman, to what extent do you see the
current way in which military commanders at the base level are
judged--and by that, I mean, it would seem to me that from the
Pentagon perspective in evaluating commanders, the readiness
issue--and some of us may recall it became an issue during the
Presidential campaign about two divisions in the U.S. Army that
slipped to a C-4 rating, readiness rating, became big news.
Where that rating question of readiness is valued at a much
higher level than whatever your rate of cannibalization is, and
if it comes to the commander's decision, or certainly those
under him who understand the commander's interest in your
readiness, you are not going to let that training slot go by
because it might ultimately be the final straw that affects
your readiness rating down to 2 or 3, isn't it so? The
question, isn't it also an issue of how the Pentagon rates
commanders either consciously or unconsciously vis-a-vis
readiness?
Mr. Curtin. Yes, that's exactly the discussion I had. A
couple of weeks ago, I was down at Oceana at the Naval Air
Station there. The wing commander there was very clear. He knew
what his priority was, and he had to meet mission-capable rates
and he had to get his pilots in the air. Cannibalization, he
knew it was happening. He saw it happening. He knew what effect
it was having on his maintenance force, but he said, ``Hey, my
future and my ratings depend on meeting those readiness
rates.'' Very clear.
Mr. McHugh. Thank you. Thank you, Mr. Chairman.
Mr. Shays. I thank the gentleman.
Which basically gets me into the whole disincentive--it
seems to me, though you have given me a number of reasons why
you would see cannibalization, why it is difficult to get parts
sometimes, the predictability, the number of aircraft, and so
on, but it seems to me at least recording and documenting the
cannibalization would be very important. There seems to be
disincentives to doing that.
So let me ask you, what would be the--you talked about why
it is difficult for inventory, but what are the disincentives
for keeping the data?
Mr. Curtin. I'm not sure there's any penalty associated
with reporting cannibalizations. I think it's just the time it
takes. We're talking about a work force that's already stressed
and probably underresourced, and now they've had to spend a lot
of time on cannibalization. It's extra time to stop and record,
take care of the paperwork, which is really computer work, but
still it takes some time, and a lot of times is not seen as a
priority for them.
Mr. Shays. OK. Just one last question. Let me just ask this
question: I can't picture how this system works. You make a
plane for a number of years. You have a life expectancy which
turns out the plane has twice as much life as we write into it.
You stop making the plane. Do they still keep making parts?
Mr. Curtin. Some. Others are so unique to that plane that
the company may go out of business. If there aren't a lot of--
you know, you'll use up whatever you have in stock, hoping that
will last you long enough, and when the time comes you're
running out, you've got to find somebody else willing to
manufacture that part, and usually at a very high cost.
Mr. Shays. Automobile manufacturers, there was this
wonderful article in Time magazine where they showed what the
car would cost if you bought it in parts, and it was like
$100,000 for a $25,000 car. Do we establish a contract--or
maybe you don't know this; if you don't, tell me--but do we
establish a contract up front that guarantees a certain amount
of parts?
Mr. Curtin. It's not in my specialty area. We do what we
call initial spares. When you build a new system, you buy
enough spare parts to get that up and running, and then you
build your history of demands for different parts that break.
That's what triggers your supply system.
Mr. Shays. We will ask some of these questions of the next
panel.
Mr. Curtin. I think that would be good.
Mr. Shays. Mr. Schrock, would you like to ask any
questions?
Mr. Schrock. No, Mr. Chairman.
Mr. Shays. Mr. McHugh, we are happy to go back to you or
Mr. Gilman or Mr.--excuse me, the gentleman, the ranking
member, do you have any questions?
Mr. Kucinich. No, Mr. Chairman.
Mr. Shays. I think what we will do, then, is go to our next
panel. Thank you very much.
Our next panel is Lieutenant General Michael Zettler,
Deputy Chief of Staff for Installation and Logistics, U.S. Air
Force; Lieutenant General Charles Mahan, Jr., Deputy Chief of
Staff for Logistics, U.S. Army, and Rear Admiral Kenneth
Heimgartner, Director, Fleet Readiness, U.S. Navy.
Gentlemen, if you have anyone else--please remain
standing--if you have anyone else that may respond to a
question, I would like to swear them in as well, so we don't
have to do it twice.
[Witnesses sworn.]
Mr. Shays. Thank you. Gentlemen, we swear in all our
witnesses, as you know, even Members of Congress. The only one
I chickened out on was Senator Byrd. [Laughter.]
But he is the only one.
All right, why don't we take you in the order that we
called you. Gentlemen, we are going to do 5 minutes, roll it
over, but we would like you to finish before the 10. Thank you.
STATEMENTS OF LIEUTENANT GENERAL MICHAEL E. ZETTLER, DEPUTY
CHIEF OF STAFF FOR INSTALLATION AND LOGISTICS, U.S. AIR FORCE;
LIEUTENANT GENERAL CHARLES S. MAHAN, JR., DEPUTY CHIEF OF STAFF
FOR LOGISTICS, U.S. ARMY; AND REAR ADMIRAL KENNETH F.
HEIMGARTNER, DIRECTOR, FLEET READINESS, U.S. NAVY
General Zettler. Thank you, Mr. Chairman, members of the
committee. Thank you for the opportunity to appear before you
and discuss cannibalization in the U.S. Air Force. It is an
important issue to us.
On behalf of our Acting Secretary, Dr. Delaney, our Chief,
General Ryan, and most importantly, the fine men and women of
our Nation's great Air Force, we would thank this committee and
all the Members of Congress for their recent support to support
our readiness initiatives.
Cannibalization is a cross-cutting issue. It impacts many
aspects of our mission accomplishment, and therefore, whatever
we do with spare parts impacts our people. General Ryan has
stated our position very clearly. We cannibalize only as a last
resort.
Unfortunately, as the GAO has pointed out, all too often
we've had to go to the last resort. This statement is rooted in
the delicate tradeoff: the need to meet mission goals while
managing the workload for our dedicated men and women.
Our analysis shows improvements. The analysis indicates
that cannibalizations have significantly declined since the
high-water mark in 1997 of 82,000 cannibalizations. Last year
cannibalizations decreased to 70,000. That's a 15 percent
improvement. That's a great start. But there's more work to be
done. Your support was a major factor in this 12,000 ``cann''
reduction over that 3-year period.
The Air Force is absolutely committed to continue this
favorable trend even further. To do so, we're prepared to
discuss the many challenges that have been discussed by the GAO
today and as we see them: full funding for spare parts;
compensating for the diminishing industrial base; adapting
modern, business-like policies for repair, procurement,
stockage, storing, and issuing of spare parts, but not
necessarily in a centralized fashion; ensuring viable organic
and contractor sources of repair, and recapitalizing our aging
aircraft and the subsystems that are so important to enhancing
the reliability.
To overcome these challenges, we in the Air Force have
implemented the broad strategy to improve overall system
supportability and reduce ``canns.'' These include fully
funding the known spares requirements in fiscal year 2001.
We've created an office that will manage diminishing
manufacturing sources and material shortages. We're
establishing and adequately funding our weapons systems depot
maintenance programs for all repairs of aging aircraft and
engines. We instituted policy changes to retain inventory when
reasonably prudent to do so, which does, in fact, reverse
policies which deleted now-needed inventory of the mid-
nineties. And we've created organizations such as the Regional
Supply Squadrons whose purpose it is to optimize inventory
distribution. Finally, we've improved deployed spare support
with enhanced direct support objectives for our fighters and
overall readiness spares packages for all of our aircraft.
With your support, we've seen cannibalizations decline 15
percent since 1997. Importantly, our total backorders that we
as an Air Force experience have fallen 50 percent since 1998,
and we've had a 10-year decline in the mission-capability
reversed, an upturn for the first time since 1991. Our latest
cannibalization rates indicate the positive trend is continuing
with the most recent fiscal year 2001 ``cann'' rates at 11.1
``canns'' per 100 sorties, the lowest rate since 1996.
There's more to be done for our men and women and to
improve our readiness. With your support, we will continue to
aggressively pursue our strategy to drive cannibalizations to
the lowest possible level while optimizing our overall
readiness.
At this time, I am ready to take your questions. Thank you,
Mr. Chairman.
[The prepared statement of General Zettler follows:]
[GRAPHIC] [TIFF OMITTED] T9974.021
[GRAPHIC] [TIFF OMITTED] T9974.022
[GRAPHIC] [TIFF OMITTED] T9974.023
[GRAPHIC] [TIFF OMITTED] T9974.024
[GRAPHIC] [TIFF OMITTED] T9974.025
[GRAPHIC] [TIFF OMITTED] T9974.026
[GRAPHIC] [TIFF OMITTED] T9974.027
[GRAPHIC] [TIFF OMITTED] T9974.028
[GRAPHIC] [TIFF OMITTED] T9974.029
[GRAPHIC] [TIFF OMITTED] T9974.030
Mr. Shays. Thank you, General.
General Mahan.
General Mahan. Thank you, Mr. Chairman and honorable
members of the committee. It's my pleasure to be here today to
report to you on the Army's view of cannibalization. I have
submitted my full testimony, and in the interest of time, I
will keep my comments short and to the point.
The Army views cannibalization as a tool that unit
commanders must use judiciously, we assume, and direct, in
their efforts to meet mission and operational readiness
requirements. Minimum use of this tool is prudent in that it
provides commanders an ability to attain readiness and mission
requirements when parts are not immediately available.
Army maintenance policy supports the use of this tool under
certain specified conditions, since there are additional costs,
as already enumerated, in manpower and in spares to our units
that use this tool. Although Army reporting systems do not
completely capture all cannibalization activity, there is
evidence that cannibalization rates have increased over the
past 2 years, as Army aviation supply availability has
decreased.
Commanders' increased reliance on this tool to meet
operational requirements and readiness goals is evidenced, we
believe, by a review of recent active Army readiness rates.
Over the past 12 months, two of our modernized fleets probably
would not have made goal without the use of cannibalization
since they met readiness goals by 3 percent or less.
Regardless, overreliance on cannibalization has the undesirable
side effects which you've already alluded to and which
commanders at every level attempt to minimize. The negative
side effects include those manpower requirements, longer
mechanics hours, lower morale, increased cost certainly.
As there is an inverse relationship between repair parts
availability and cannibalization rates, the problem the Army is
focusing on is supply parts availability. Cannibalization is
only a symptom of the real problem, in our view. Due to a
decade of underfunding and an OSD focus on reducing inventories
to save money, as General Zettler talked about, in the early
1990's, the Army's repair part stocks are neither sufficiently
wide nor deep at both retail and wholesale levels to meet
commander requirements.
Consequently, the Army has failed to meet the Army's supply
availability goal of 85 percent in 4 of the last 5 years, and
that's for both ground and air fleets, and in 8 of the past 12
months. Aviation supply availability performance is even worse,
failing to meet goals in any of the last 16 years or in any of
the last 12 months.
Exacerbating that problem is an increasing demand for
repair parts due to the aging fleets and decreased reparable
spares reliability due to our past policy of inspect and repair
only as necessary, as opposed to full refurbishment to depot-
level standards. While that policy will be changed under the
National Maintenance Program to one that is a rebuild to depot
standards, it does, in fact, contribute to today's
cannibalization rates.
In addition, a key tenet of our ongoing transformation is
recapitalization of the fleets of our aircraft. This program
addresses our aging fleet and our increasing operations and
support cost problems for key weapons systems that require
rebuild or selected upgrade.
In closing, our view is that cannibalization is a symptom
of the real problem of parts availability, and to minimize the
use of that cannibalization we must improve spare parts
availability and reliability, which will require a substantial
investment of our funds.
I thank you for the opportunity to appear before you today.
I look forward to working with you all and responding to your
questions at the appropriate time.
[The prepared statement of General Mahan follows:]
[GRAPHIC] [TIFF OMITTED] T9974.031
[GRAPHIC] [TIFF OMITTED] T9974.032
[GRAPHIC] [TIFF OMITTED] T9974.033
[GRAPHIC] [TIFF OMITTED] T9974.034
[GRAPHIC] [TIFF OMITTED] T9974.035
[GRAPHIC] [TIFF OMITTED] T9974.036
[GRAPHIC] [TIFF OMITTED] T9974.037
[GRAPHIC] [TIFF OMITTED] T9974.038
[GRAPHIC] [TIFF OMITTED] T9974.039
[GRAPHIC] [TIFF OMITTED] T9974.040
[GRAPHIC] [TIFF OMITTED] T9974.041
[GRAPHIC] [TIFF OMITTED] T9974.042
[GRAPHIC] [TIFF OMITTED] T9974.043
[GRAPHIC] [TIFF OMITTED] T9974.044
[GRAPHIC] [TIFF OMITTED] T9974.045
Mr. Shays. Thank you, General Mahan.
General Heimgartner.
Admiral Heimgartner. I like being a ``general.''
Mr. Shays. Admiral, I'm sorry. [Laughter.]
Admiral Heimgartner. When I call you a general and you're
an admiral, it is kind of like when people call me a Senator
when I'm a Congressman. I kind of prefer Congressman.
[Laughter.]
Well, Mr. Chairman, Congressman Kucinich, members of the
committee, I appreciate the opportunity to appear before you
and discuss cannibalization and how it relates to naval
aviation readiness and answer questions. I have submitted a
written statement for the committee and ask that it be entered
into the record, and I have a brief, 3-minute or so, oral
summary of my written statement.
First of all, I'm Rear Admiral Ken Heimgartner, the
Director of the Fleet Readiness Division on the Chief for the
Naval Operations' staff, a new position established in October
2000 by the Chief of Naval Operations to help focus the Navy
leadership's attention on current readiness. I work closely
with the fleet to identify current readiness issues, validate
those requirements to meet those readiness concerns, and
advocate those requirements within the planning, programming,
and budgeting system up here in D.C.
As far as background, I'm a naval flight officer. I have
over 22 years of operational flying experience, over 4,500
hours of flight time in fighters and 3,000 of those in the F-14
Tomcat. I served a 2-year exchange tour with the Air Force on
flying status. I've been a squadron maintenance officer, a
squadron commanding officer, and an airwing commander on an
aircraft carrier and had to make the hard decisions on
cannibalization.
Cannibalization and its impact on fleet readiness is an
area of huge interest to not only my division and me, but at
the highest levels of the Navy and the Marine Corps. The
Department of the Navy position is that, in support of our
training and operational mission requirements, cannibalization,
while not a preferred maintenance practice, can be a viable
maintenance tool in certain circumstances. It is, therefore,
authorized by Navy Department instructions. As long as the Navy
and the Marine Corps operate complex, high-performance aircraft
in difficult environments in support of our Nation's defense,
pragmatic, constrained, and managed cannibalization will occur
to ensure that we have enough mission-ready aircraft to meet
operational and training missions.
Having said that, we in the Navy and the Marine Corps
recognize that cannibalization generally highlights shortfalls
in our logistics systems and other areas. The sailors and
marines that repair our planes don't want to tear down another
plane to fix that plane that they are assigned to repair. Our
maintenance technicians strongly agree that only extraordinary
circumstances should drive cannibalization. Therefore, we track
cannibalization and are taking actions to fix specific
cannibalization problems as well as attacking negative trends
in overall cannibalization rates.
Our focus on this problem, along with Congress' help, has
stopped the recent increasing trend in cannibalization across
naval aviation. While the trend for the total force is
declining, we still have ``cann'' problems, cannibalization
problems, within certain types of aircraft, exacerbated by the
increasing age of our naval aircraft inventory, which now
averages over 18 years for our carrier fixed-wing aircraft and
21 years for our helicopters. For comparison purposes, the
average age of our surface combatants in the Navy, the ships,
is only 15 years.
The challenges associated with an increasing demand for
parts as aircraft age, unanticipated parts failures on older
aircraft, limited space for repair parts afloat, and long
delays in delivery time for some parts, all contribute to the
need for cannibalization. Because of these specific challenges
and the dissatisfaction that lack of needed parts, equipment,
and materials has on our sailors and marines, we are continuing
our efforts to reduce the need for cannibalization of aircraft
and have programs in place to do so.
With your help, our deployed forces are ready today. There
has been no degradation in our deployed force readiness over
the last 20 years, but at a readiness price for our nondeployed
forces. And the same as the Air Force, this last year was the
first year that we have been able to reduce a downward trend in
readiness for our nondeployed forces.
The key to reducing the impact of our aging aircraft
inventory and cannibalization is to establish a proper balance
between acquisition of new equipment, which helps reduce
maintenance requirements, and properly funding the spare parts
for the aircraft that are currently in the inventory.
Thank you for the opportunity to discuss this issue with
you and answer questions.
[The prepared statement of Admiral Heimgartner follows:]
[GRAPHIC] [TIFF OMITTED] T9974.046
[GRAPHIC] [TIFF OMITTED] T9974.047
[GRAPHIC] [TIFF OMITTED] T9974.048
[GRAPHIC] [TIFF OMITTED] T9974.049
[GRAPHIC] [TIFF OMITTED] T9974.050
[GRAPHIC] [TIFF OMITTED] T9974.051
[GRAPHIC] [TIFF OMITTED] T9974.052
[GRAPHIC] [TIFF OMITTED] T9974.053
[GRAPHIC] [TIFF OMITTED] T9974.054
[GRAPHIC] [TIFF OMITTED] T9974.055
Mr. Shays. Thank you, Rear Admiral.
We will go to Mr. Gilman.
Mr. Gilman. Thank you, Mr. Chairman. I want to welcome our
experts here on logistics.
Let me ask the entire panel, do you three Chiefs of Staff
for Logistics and Director of the Fleet of all three major
components of our military ever get together to discuss your
mutual problems of cannibalization?
General Mahan. Sir, I can tell you that we get together
quite frequently. The Joint Logistics Commanders Conference, we
meet often with the Joint Logistics Chief, Lieutenant General
McDuffy. We talk about issues, all types. Cannibalization has
not been one of the premiere subjects, but it certainly is
embedded in our readiness discussions as we talk to that.
Mr. Gilman. Well, General Mahan, you say you never get into
the cannibalization or touch it lightly?
General Mahan. Sir, it has not been a specific subject that
we have dealt with as a unique subject. It is embedded in our
discussion topics about readiness, about ways to enhance that
readiness, etc. We talk more about the other issues, such as
test equipment, diagnostics, the long lead times for
administration and procurement lead times. We talk about
funding levels. We talk about management systems.
Mr. Gilman. But do you feel, all three of you, do you feel
that cannibalization warrants more attention than it has been
given by the services?
General Zettler. I think when we meet----
Mr. Gilman. Could you put the mic a little closer to you,
General?
Mr. Shays. Gentlemen, I'm sorry, we seem to be having a
little bit of trouble with our mics. They used to project
better.
General Zettler. I think when we meet, we try to go to the
root cause of cannibalizations. We recognize that there's a
cannibalization issue out there, but we go to some of the
things that you discussed: inventory management policies and
practices, stockage levels, minimum readiness levels that we're
willing to accept, and how you drive from those minimum
readiness levels to a stockage objective.
Mr. Gilman. Well, who meets with you from DOD?
General Zettler. That's a very fair question, and in the
past Dr. Kallock, who was the Deputy Under Secretary of Defense
for Logistics, was the leader of this tribe as we worked our
way through this process and these issues.
Mr. Gilman. You're talking about past. Is he no longer
there?
General Zettler. No, sir, he's no longer there.
Mr. Gilman. Has that post been replaced?
General Zettler. Pardon me, sir?
Mr. Gilman. Is there anyone who has been replaced for that
responsibility?
General Zettler. There are plans in the Department to
replace him.
Mr. Gilman. But at the moment there is no one there?
General Zettler. That's correct, sir.
Mr. Gilman. And how long has that been vacant?
General Zettler. Since the change of administration.
General Mahan. Sir, I might add, we have an Acting DUSDL,
Deputy Under Secretary of Defense for Logistics, Mr. Allen
Beckett. We have met with him. He continues to bring to us the
issues that are important from a readiness perspective, but,
sir, he is an acting.
Mr. Gilman. Then it would be that post that would have the
central control of logistics, is that correct? That staff level
person?
General Mahan. Sir, there is. I would submit to you that it
is not merely the logistics chief that has that responsibility,
nor that can impact on readiness and spares. I would suggest
that the acquisition process, which is, in fact, separate, just
as the science and technology is also separate, has much to do
with the issues of spares, reliability of spares, and the
levels of spares that are acquired as part of the initial
systems process. So it is a partnership among all of those
staff leads within the Secretary of Defense, just as it is in
our----
Mr. Gilman. I have to interrupt you because my time is
running. Have you, the three of you, made any recommendation on
how to avoid this growing problem of cannibalization to the
Department of Defense?
Admiral Heimgartner. From the Navy's perspective, not
directly.
Mr. Gilman. Pardon?
Admiral Heimgartner. Not directly.
Mr. Gilman. Not directly? What would you think about the
services--how would you response to a proposal of partially or
wholly privatizing the supply system for spare parts and other
equipment management? What would your response be to that?
Since we're not doing such a good job in the services, maybe
the private sector could do a better job.
General Zettler. I think there is room for a study of that
approach. We have various systems, such as the KC-10 or the F1-
17, where we allow industry to do our supply chain management
for the platform unique parts. We get good support. It is with
a cost.
We know that in cases where we have gone to industry to
allow them to do that, we have also had supply chain
difficulties. So I think when you move down that path, you have
to be very careful. It's something that the Air Force would not
immediately throw up a stop sign to, but it's one that we would
say we need to go cautiously.
Mr. Gilman. But worthwhile studying, is that what you're
saying?
General Zettler. Absolutely worthwhile studying.
Mr. Gilman. Do the others feel the same?
Admiral Heimgartner. If I may comment----
Mr. Gilman. Admiral.
Admiral Heimgartner. Yes, anything that may highlight why,
the systemic reasons, if that's the case, that cannibalization
is where it's at and where it needs to go. But I may add that
cannibalization itself may just be a small symptom of larger
problems. And from my own experiences, the sailors and the
troops have no adverse reaction to cannibalizing if that action
leads to a sortie that gets off the ground, training that's
completed, an operational sortie flown while deployed overseas,
and mission accomplishment. They take great pride in preparing
those airplanes and getting those airplanes off the flight
deck.
Mr. Gilman. I can understand that, and they do a good job
of that, but what about the cost factor to all of this of a
piece of equipment close to several millions of dollars lying
there idle because you cannibalized it?
Admiral Heimgartner. Well, let me finish. The other
elements that cannibalization may mask, and were alluded to by
others as well as the GAO, and that may be an inadequate
training issue. It may be the inadequate number of personnel.
It may be improper engineering and logistics support for
components on aging airplanes on which we have no data as to
when they may break and the magnitude in which that fix may
exacerbate the length of time in which components may be down.
Let me just say that we don't normally stock entire landing
gear assemblies because those landing gear assembles are
supposed to last thousands of hours, but if they break
prematurely, it can take as long as 2 years until the time that
we've been able to get those parts back in the inventory. And
that has been the recent case in the year 2000 with engines on
AV8-B's, engines on H-46's, landing gear on the F-14, and
landing gear on the F-18.
Mr. Gilman. Admiral, how much does an F-14 cost the
service? What's the cost of that 14?
Admiral Heimgartner. Do you mean to buy a new one?
Mr. Gilman. Yes.
Admiral Heimgartner. Difficult to determine since the
average airplane----
Mr. Gilman. Well, approximately.
Admiral Heimgartner [continuing]. Is over 20 years old.
Replacement cost, probably $50-$60 million, but that's a guess.
Mr. Gilman. Millions of dollars sitting there idle, it
seems to me.
My time is running. Mr. Chairman, one question more----
Mr. Shays. Your time ran out a long time ago, but we're
trying to accommodate you. [Laughter.]
Mr. Gilman. The GAO noted the inability to determine the
full extent of cannibalization because the services aren't
really reporting the full extent of cannibalization. Can we do
something about more accurate reporting, so that the Congress
will have an opportunity to take a good look at the assessment
of the cost and how it affects our----
Mr. Shays. Let me do this: That is a question I am going to
come back to. That is a whole new line of questions that we
really do need to get into, and I really thank the gentleman
for asking these very important questions.
Mr. Gilman. Thank you, Mr. Chairman.
Mr. Shays. I'm going to give Mr. Kucinich 10 minutes, and
then we'll go to you, Mr. Schrock.
Mr. Kucinich. I thank the chairman, and hopefully, it won't
take that long to go through these questions.
I want to begin by thanking each of the representatives of
the service. I want to thank you for your service to our
country. You should know that those of us who serve in Congress
understand that you are performing an essential service to our
Nation in taking responsibility in the respective services, and
also, just as I don't like to be held accountable for the
institution of Congress relative to certain things that happen
around here, I would expect that any of the individuals who
serve proudly also have some concerns about the institution
that you are now serving. You do the best you can, and I
believe that.
But, nevertheless, I want that to serve as a backdrop for
the questions that I have, and I ask that you not take them
personally, but take them as the responsibility that I have to
ask the questions. I hope that you will understand the spirit
in which the questions are conveyed.
General Zettler, I am sure you are aware of GAO's finding
that the Department of Defense maintains almost $30 billion
worth of current inventory that exceeds both war reserve levels
and current operating requirements. Are you familiar with that?
General Zettler. Yes, sir, I am.
Mr. Kucinich. What do you think of that?
General Zettler. Well, I feel that I have to look at the
Air Force, where we work that issue for the Air Force. Our
inventory in the Air Force over the last 10 years has been
drawn down from, rough number, 35 billion to a number today of
25 billion. I think that those stock levels that are out there
are in the ballpark of appropriate.
Do we have some things out there that may not be used for 8
or 10 years? Probably. Do we have a lot of parts that we don't
have right now? Absolutely.
When I look at what the Materiel Command says keeps them
from repairing parts to the needs in the field, the largest
constraint that they repeatedly report to us is a shortage of
carcasses, which says we don't have an inventory of spare parts
to fix, to put back out in the field. So I think our inventory
figures are probably in the ballpark.
I will tell you that we've also made some policy changes,
as I made in my oral statement, recently to retain inventory
for a longer period of time. We've done that because we've had
some solid studies done by the men and women that are out in
the field that say, the current policy says, since we haven't
had a demand for this, we should get rid of it. But we know
that in 2 years we're going to go through the same life cycle
on this airplane again, and that part is going to be in demand.
So my bottom line on the inventory question is that we need to
have a balance here. We can bring that inventory down
dramatically, only to find out in a few years we'll need it
again.
We're also buying a great deal of spare parts, and those, I
believe, are valid requirements that we have gone to great
lengths to identify properly what's required and try to
replenish the stocks that were drawn down in the nineties for
demands that we said weren't going to happen.
Mr. Kucinich. Thank you, General. General Mahan, would you
like to respond to that same question?
General Mahan. Sir, I would. I share the same perspective
as my comrade from the Air Force.
Mr. Kucinich. Do you have the same numbers?
General Mahan. Sir, I have better numbers than that in
terms of reduction from the OSD-mandated perspective. We had a
memorandum directing reductions in inventory. At that point
that we started, we were at a little over about 18 billion in
the Army. We have gone down below 8 billion. We are now back to
9.3 billion because we recognized that readiness rates could
not be sustained with those levels of spare parts inventories.
Our current procurement for aviation spares, the purchase,
if you will, from field organizations, average about $1.6
billion per year. So, in terms of inventory turns, we wouldn't
meet the inventory turn average for industry at large, but we
have, as already alluded to, some inventory that will not
change as rapidly.
If you went back and looked at our recapitalization
efforts, much as General Zettler has already alluded to, we
find that carcass rebuild, which we depend on 25 to 30 percent
of the time for spares, is inadequate because of piece parts
that are subordinated to that spare. So we have to go through
and really look at the high readiness drivers and the high
dollar cost drivers, so that we can get the best return on
investment for what we will purchase in spares requirements.
Mr. Kucinich. You're familiar with the same report that I
cited?
General Mahan. Sir, I am.
Mr. Kucinich. What do you say about one of the aspects of
that report that said that $1.6 billion worth of inventory was
purchased without any valid requirements? This is GAO saying
it. Is that a problem?
General Mahan. Sir, I could tell you that, from the Army's
perspective, we contributed to that. Until we have--and we are
in the process even as we speak of going to a single visibility
of all Army inventory. It's called total asset visibility.
Before, our wholesale system believed and acted as if, when
they issued a part, that part was considered consumed because
our standard management information systems would not allow you
to count as part of our requirements determination process all
of the assets that were in the hands of field units when
purchases were made from the original equipment manufacturers
or when decisions were made to rebuild spares. Today we have
made changes that will give us from the factory to the foxhole,
if you will, the inventory in motion, both from a maintenance
perspective, from an inventory perspective, and it will always
be available for that acquisition objective determination.
So, yes, sir, I would suggest that we did that. In my first
tour in the Pentagon as a general officer, I was Director of
Supply and Maintenance, and, in fact, we purchased into long
supply, rebuilt into long supply, and failed to induct the
appropriate readiness-driving carcasses into short supply into
the production lines because we had poor visibility of those
assets. We have changed that.
Mr. Kucinich. So, General, when GAO said that the Army
didn't know if it shipped inventory, inventory had been lost or
stolen, because of weak inventory control procedures and
financial management practices, you are saying these are things
that you not only are aware of, but you are working to address?
General Mahan. Sir, we have been vigorously attacking that
through several issues. As I said, the total asset visibility
program, the single stock fund program that will get us to
visibility of all those assets, be that at, if you will, the
flight line equivalent for the Army in the motor pool, in the
authorized stockage list of units down to that retail level,
through the installation level, if you will, retention
accounts, and at the wholesale level. We are through milestone
two. Basically, we have captured the installation stocks and
the retention stocks at the core, mainly the repair parts
companies, and we are now moving into milestone three, which is
down at the retail stock level of the authorized stockage list
inside the units themselves.
Mr. Kucinich. A quick question--thank you, General.
General Mahan. Yes, sir.
Mr. Kucinich. I want to go to Admiral Heimgartner. GAO
reported in its high-risk series that the Navy was unable to
account for more than $3 billion worth of inventory. Do you
have any response to that, Admiral? And what are you doing
about it?
Admiral Heimgartner. Well, similar approaches as the other
two services. I mean, as we all know, the resources have been
difficult to maintain in service aircraft as well as
recapitalized, and we can't afford to have mispositioned, ill-
positioned stock. So we're attacking that aggressively.
But, if I may, I would just like to mention for
comparison's sake that we have about roughly 16,000 parts on a
carrier. When an aircraft needs a part, we're able to fill that
about 75 to 85 percent of the time immediately, and then it
takes about 4 days on average for the other parts to come to
the carrier. And if we're looking at shore-based operations, it
takes 8 to 12 days.
So what we have is a little bit of a mismatch, as much as
25 percent, perhaps 15 percent. So can we do better?
Absolutely, yes.
Mr. Kucinich. Yes, one of the things I want to say before I
go back to the Chair here is that there is a certain level of
confidence that comes in the midst of all this when you have
representatives of the service taking responsibility, first of
all, because you have been very certain about that, but also
stating that you are really making an effort, you have been
making an ongoing effort to try to deal with this. I think that
should give the public a certain degree of confidence that an
effort is being made. I would say that, based on the
presentations that I have seen here, I think the people should
know that you are really working very hard to try to straighten
this out. It is not something that you created, but you are
trying to resolve it. So I want to thank you for your
testimony. Thank you.
Mr. Shays. I thank the gentleman. Mr. Schrock.
Mr. Schrock. Thank you, Mr. Chairman. I think what my
friend from Ohio said last is probably the most important
thing. I am not sure--we've missed the point here, as far as I
am concerned.
General Zettler, first of all, said that they try to
cannibalize as a last resort, and he also said full funding--
keyword ``full funding''--for these parts is necessary if he is
going to keep his planes running.
General Mahan said underfunding is the main problem.
Underfunding is the main problem. More spare parts because of
aging fleets, that is a key. The older these things get in the
Navy, the Air Force, the Marine Corps, or the Army, they've got
to be fixed.
Admiral Heimgartner said aging inventory means more spare
parts. And, folks, we just have done a lousy job of that, and I
place the blame right here behind this desk. If these men are
going to do what they are supposed to do, and if the fleets are
supposed to do what they are supposed to do, we've got to fund
them. We haven't killed the military over the last 8 years, but
we have kept the water level up to here so they are strangling.
Unless we do something about that, this isn't going to change.
These three men are doing exactly what they are supposed to
do. I heard my friend Mr. Gilman say, if the services aren't
doing a good job of this, maybe we ought to let the civilians
do it. I nearly came out of my seat at that one. They are doing
a magnificent job. It is the civilians that aren't making sure
they have the parts that they need.
We can never predict when a ship is going to break, when a
tank is going to break, and when an airplane is going to break,
Mr. Chairman. A ship is only so big, and you're not kidding,
there are lots of parts. I was in the Navy 24 years. I have
talked to the people at Oceana a lot because that is in the
district I represent. And they cannot predict when these things
are going to happen. If you have to produce these things after
the problem exists, then there is no way we are going to keep
our fleet running, and they are not going to be able to carry
out the missions they have been tasked to do.
You have to understand, too, the military has been cut by
40 percent in the last decade with requirements going up 400
percent. That is not their fault; that is our fault. In the
last 8 years, the last President had our forces in more areas
of the world than all Presidents and Franklin Delano Roosevelt
combined, and that was out of the budget. There was not a
contingency fund to do that or a supplemental fund. These men
had to try to operate with all those things going on and they
simply can't do it.
We shouldn't be having this discussion. We shouldn't have
to look at airplanes like we see up there. Because if we were
funding exactly as we should and we were providing the parts,
that wouldn't have to happen.
I sat next to a former 35-year-old major in the Air Force a
year ago coming back from San Francisco. I said, ``You're 35
and you're a former major. What's that all about?'' He said,
``I was flying planes day-in/day-out, week-in/week-out, month-
in/month-out, and every night when I parked them, I wasn't sure
any maintenance was going to take place on those, and I wasn't
even sure if I came back in the morning that all the parts I
left there the night before were going to be there. And my wife
said to me 1 day, she said, 'You know, we've got three small
kids. One day you're going to go up and you're not going to
come back. What would I do?''' He was a smart guy. He got out.
He's got a big, fancy, high-paying job in Silicon Valley, but
the fact is we needed that guy, and we needed the hundreds and
hundreds of others that have gotten out because of the same
thing.
I hear this from commanders and squadron commanders all the
time in Virginia Beach and Norfolk, the area I am privileged to
represent, and the enlisted people as well. The morale of the
troops sucks. It stinks. Because they don't have the parts to
do what they have been trained to do. Unless we at this level
put the money in the budget to make that happen, and unless we
do something about a supplemental real fast, the CNO has told
me he's going to start parking planes June 1st. The Chief of
Staff of the Air Force said he is going to start parking them
August 1st. It is not these gentlemen's fault; it is our fault.
We have got to make sure the funding is there.
If we truly want to have the best military we have ever
had--and everybody keeps saying we do, but I am starting to
question that--we've got to make sure we provide them with the
funding that is necessary. I didn't mean to get on my soapbox
like this, but I was in the military 24 years. I know what it
takes to run an operation, and we are not doing it. We are not
letting them do it. Until we do, nothing is going to change.
Thank you.
Mr. Shays. I thank the gentleman.
Let me just say to all three of our witnesses that, while I
agree with a lot of what my colleague has said, having been
here 14 years, I have been here when the military has come
before the Appropriations Committee and said, ``We have all the
money necessary to do everything we need to do.'' I served 14
years in the Statehouse, and quite often people would come and
say, ``We have everything we need.'' Then, later on, we find we
didn't. So I will fault Members of the Congress when the
statements are clear and the testimony is honest, but when
people take the party line to be good soldiers for their
command, they totally distort our knowledge and understanding.
And let me just say to you that I am trying to get a handle
on a few things, and it is very important that we proceed with
this hearing and understand exactly where the problems are and
where the remedies are. I can understand the age of the
aircraft means that we are going to use parts more often. I can
understand that, if we are no longer in production, we have a
problem. I can understand that this number of units that we may
have, the number of aircraft, may make it much more difficult
to supply inventory. I can understand that we use this aircraft
continually. They don't sit in the garage for a weekend
usually. So that is a problem. And I can understand the whole
funding issue.
What other issues cause the shortage?
General Zettler. Let me address that at least in part. Our
stock management is pretty sophisticated business. We try to
optimize aircraft availability. When we do that, we set some
limits that we're willing to accept in not having the spare
part where we would like it to be when the mechanic says, ``I
need it.''
We do that from the modeling approach that says some of
these parts are terribly expensive, and so you try to optimize
by having a few lesser ones than the very most expensive one.
When we do that, the reason we do that is you try to drive to
100 percent availability of every aircraft; you start to run
vertical on the cost curve against the probability line that
says I want 95 percent or 98 percent or 99, and you're
literally going to infinity to assure you have the distribution
of spare parts. So we put some cost constraints into our
equations.
When we do that, that means there's going to be times where
a mechanic says, ``I need this part,'' and he doesn't have it.
It's a simple variability of demand. He may have used one
yesterday, too, and he may not use another one for 2 weeks or 3
weeks while the system replenishes it.
Having said that, we have obviously undershot that mark,
and we're going back and look at those equations. I will also
tell you that in our overall Department policy with the Defense
Logistics Agency, what the Defense Logistics Agency is tasked
to do is give us the parts that we need 85 percent of the time
when we order them. That's their stockage policy. So that
builds in some criteria here or some shortages in here. And,
again, that's a matter of looking at where you're going to go
on that probability-versus-cost curve.
In order to overcome that one on the Defense Logistics
Agency, for example, the Department of Defense 18 months ago
authorized an additional $500 million of inventory
augmentation, of which 60 percent comes to the Air Force as
they buy it over 4 years to help us with our spare parts
problems.
So when a mechanic tells any of us out there, ``I don't
have the parts,'' you really do have to bore down into the
details of what is the part that you don't have or the one
that's really giving you the problem and why. In many of our
cases in our weapons systems right now, very currently, this
year and last year, we closed two depots; we moved 40 percent
of the repair capability between the depot at Kelly and the
depot at McClellan in Sacramento, CA, and we put that into
other depots or into the private sector. That's a huge workload
change; 40 percent of our workload moved. And that has had
perturbations.
So you really need to start to peel the onion back before
we talk about centralization, before we talk about making major
policy changes: What is it we're really trying to fix here? I
think that all of us are doing that, and I think you will
recognize that we are doing that when we're done here today.
In my service, for example, I have taken my Director of
Supply and sat him aside with 120 to 150-day tasking to go
through the complete supply chain management policies and
procedures that we have and we operate under in the Department
of Defense and in the Air Force, and to come back to the
corporate body of the Air Force and tell us what are the high
payoff ones that we need to go change, and we're prepared to do
that. I've been to the Chief with the outline of how we're
going to do that. I've made my case. The Chief supports it, and
I think that General Mansfield will come back in the July/
August timeframe with, ``These are the things that we
absolutely have to do,'' from stockage policy, from financial
operations, from distribution policies, from how we do
readiness spares kits, and bring that all together. I think he
will bring in 30 to 50 initiatives, and I'm hopeful that we
will get 75 to 85 percent of those accomplished in the next
year.
Mr. Shays. OK. General Mahan, we have an aging aircraft. We
are no longer in production in some. We have small numbers of
units, aircraft. We have a lack of predictability. We have a
turnaround problem. We have full funding, and General Zettler
has talked about cost constraints and that proper balance. What
would you add to this list?
General Mahan. Sir, I would tell you that policy, as it
relates to stockage availability--as mentioned already, DLA
used to have a 90 percent stockage availability requirement in
the early nineties. They were mandated, I believe by Congress,
to go to an 85 percent stockage availability criteria, as a
result of the excesses that were, in fact, noted after the
buildup of the Desert Shield/Desert Storm.
I think at the end of that, because of the numbers of
dollars that we had that were in----
Mr. Shays. Let me just explain something, to add a little
reality to my colleague's comments. We were ordering, because
we had such poor inventory control--I mean, this is not the
first hearing we've had. We are not babes in the woods here. We
have had countless hearings talking about billions of dollars
of parts being ordered because all the military didn't know
they already had the parts. So we have to get at this.
And the reason we started to see Congress respond
differently was we wanted to know why the hell we were ordering
parts we already had, and we were ordering them not just 1
year; we were ordering them a year and a year and a year. So we
hadn't used the parts for years and we kept ordering them
because we have such poor control.
We wondered why it is that our masks--and this isn't
aircraft, but our masks--some of them were not made properly.
Forty percent of them were not performing to the requirements,
and we mixed them in with the inventory, and when we wanted to
get them out of the inventory, they couldn't tell us which
masks were what.
So, I mean, there are a real lot of problems here. I
suspect that they just didn't relate to the Marines on the
ground and the Army on the ground, but it related to the same
endemic kinds of problems.
So you are talking about coming down to 85 percent, and
that was a factor, you think. What else do you think?
General Mahan. Sir, if I could expand on that----
Mr. Shays. Sure.
General Mahan. Mr. Chairman, I think we're violently in
agreement in terms of our inability to articulate very clearly
the real requirements. Our systems have grown up in stovepipe
systems. Financial does not talk to supply. Wholesale did not
talk to retail. We are attacking those systems. Maintenance did
not talk to supply appropriately at the wholesale level. So I
had swivel-chair technology taking place at the corporate
leadership of the Army, where our Army Materiel Command had to,
in fact, take one diskette, do a swivel-chair for every
national stock number that it was trying to manage of the 6,400
reparable items, much less the hundreds of thousands of
consumable items that have been transferred to DLA. Sir, that
is an unacceptable way of doing business, and we have to get at
that.
That is one of the efforts that we are making today, to try
to get visibility over all those systems, so that we make the
right corporate decision. Where we can, we need to run our Army
and our Armed Forces as a business. As we have already alluded
to, it still has to be passed through the prism every day of
readiness and mission capability, but where we can--and that's
where I go back to single stock fund and the National
Maintenance Program, reliability of the spares, refurbishment
of the platforms that will allow us to do that.
So systems, spares reliability, and how we can look at our
policies, not the least of which is inventory management, as
we've spoken to, but also maintenance management. If I continue
to repair only as necessary--and I'll give you probably one
that to me is far more meaningful, but it clearly, I think,
underscores the importance of having appropriate policies.
Today we have an inspect-and-repair-only as-necessary
policy that for the M-1 tank engine, when we originally bought,
it was supposed to be 1,500 hours mean time between failures,
delivered between 1,350 and 1,400. Because of inspect-and-
repair-only as-necessary, if I open an engine at the unit level
and that engine has a problem with one or the other of its
forward or rear mods--and there are four in that--they can
replace a forward mod and put the engine back together, and
they just bought into the life expectancy of the worst of the
remaining three modules of that engine. By doing that, that
means that the mechanics are going to be probably repairing it
three times more frequently than they should, had they gone
back to refurbishment; i.e., the depot-level DEMAR standards
that will go back and recapitalize and refurbish to zero miles
an hour.
So our policies, be that inventory management, be that
maintenance management, certainly be that the financial
management as in single stock fund, all coalesce, hopefully,
into a better capability to do exactly what you would expect of
us, and that is to manage appropriately and efficiently all
those different policies and procedures.
So, sir, we are in agreement in terms of where we must go.
It's now pushing the dollars into the systems to be allowed to
do that. My management information systems are, in fact, from
wholesale logistics modernization program, which is for the
first time trying to get at a capability instead of buying
hardware and software in stovepipe fashion that has first,
among equals, the ability to coalesce all of the disparate data
elements from supply, maintenance, finance, etc. So that we can
begin to see all of those things that we could not see before.
That's what led us to this inventory mismanagement.
Clearly, guilty as charged, because we did not have visibility.
Once we issued, it was considered consumed. And GAO, I believe,
would go back and could confirm for you that those things that
were bought into long supply or repaired into long supply were
at least partially, if not wholly, due to our inability to use
those systems automatedly. So that an automatic feed to a
requirements determination process included the elements that
were down at the retail level in the hands of the flight lines
and the motor pools, as well as all the way up.
Mr. Shays. K-Mart can tell you what they sold in any store
almost instantly. The military at this time cannot tell you
what they have, where they have it, when it goes out. They
can't tell you, in a sense, what the consumer is buying. And I
am just saying to you that we all recognize that and we are
trying to deal with it, but it is why we are here.
General Mahan. Yes, sir.
Mr. Shays. Because if you can do it as well as the private
sector, then we want you to continue to do it. If the private
sector can cut your costs, so your military personnel who have
been trained to do so many things can do their jobs and not
have to handle inventory, although you have people trained to
handle inventory, that may be a plus. So these are all things
that I know you are considering and we are aware that you are
as well.
General Zettler. Mr. Chairman.
Mr. Shays. Yes?
General Zettler. In our Air Force today, implemented in
fiscal year 2001, being refined in fiscal year--or implemented
in 2000, being refined this year, when our reparable parts sell
at a base, in short order, not instantaneously, the item
manager for that part and his supply chain manager, his bosses,
know what parts have sold, and that allows them to make more
management-level decisions of what parts need to be repaired
and driven into the repair.
So we have a program out there. By acronym, we call it
KEYSTONE. It's certainly not perfect, but a vast improvement
over what we had in 1999 to tell us what parts are being
consumed and how to, then, replenish those, rebuild the budgets
for the future years.
General Mahan. And, sir, likewise, I think through all the
services, we are going to more and more of a real-time DRID-54,
which is an OSD directive that forces us to go to real-time, if
you will, even wireless kind of activities, so that we can
relate supply activity to real mission requirements. That's one
of the underpinning responsibilities of the services as we go
to more of this business process-related----
Mr. Shays. Let me just say, my colleague is welcome to join
in anytime, but when you only have two Members, we have the
opportunity to turn off the light. It also gives you a chance
to give a more extended answer, if you want to.
Mr. Schrock. I would like very much to----
Mr. Shays. Sure.
Mr. Schrock. I agree with two things you said completely.
One was that for a long time we were overbuying and things were
stacking up on one another, and that is not good. But I think
you will be pleased to know that the Navy at the SPA Wars
Command in Chesapeake has developed a system, a K-Mart-type
system, a Wal-Mart-type system.
Mr. Shays. Right.
Mr. Schrock. And, oddly enough, it was developed by an ED-7
Chief Petty Officer and a First Class Petty Officer. And I had
a briefing on that a couple of months ago, and it's actually
magnificent and is going to stop some of these problems.
And another thing you said, you're absolutely right, the
Joint Chiefs do come up here and say they want this much money
when they knew they needed this much. I went back and talked to
two of them, and their response was, ``Well, that's just the
way business was done the last 8 years. We knew we were going
to ask for this much, but we had to beg for the rest.'' We
shouldn't have to do that. Those men ought to be able to come
up here and say frankly what they need for the whole period and
then be done with it. And I think that mindset is going to
change.
Mr. Shays. Right, and they are going to say what they need,
and we are not going to agree with everything, but at least the
record is honest. Then we can have accountability where it
belongs. I think if you tell the American people the truth,
they ask you to do the right thing. And I think if you ask
their Representatives, their Congressmen and women, what you
believe to be the truth, they attempt to do the best they can
to accommodate.
But, we are also dealing with--I mean, I am interested in
National Service in general. I had a Member say he is not going
to vote for it because three out of their seven accounts
weren't auditable. And then in my work on the Budget Committee,
working with DOD, none of DOD's accounts are auditable--none.
None. Over 7.6 trillion transactions were not auditable. That
lends itself to extraordinary abuses. So we just have to make
sure that we are demanding the same accountability ultimately.
Admiral, I didn't give you a chance to just respond. I do
want to get to the second part, which I do fault the military
for, and I am going to give you a chance--in other words, we
can say it is other people that should have done this or that
and we could do a better job. I am at a loss to know why we
aren't keeping better documentation and why the documentation
can't be uniformly understood. And if it can, then I want to
know how it can be.
But we have traveled the bases and we ask these questions
of the rank-and-file, and they tell us how much down time
exists for the inventory. Thank goodness, they are telling us
because I want to do something about it. But it seems to be
higher than what the statistics tell us.
But, Admiral, just going back on the issue of the age of
the aircraft, no longer in production, small number of units,
lack of predictability, turnaround time is a problem, full
funding issues, whether we are fully funding the cost, what's
the proper balance between inventory on hand, and so on--I
mean, those are issues that obviously you have to think about.
Is there anything else I should add to that list?
Admiral Heimgartner. Let me, if I could, just take a couple
of minutes to address that in broad terms, and then maybe more
specifically.
I agree, since the early nineties, requirements was not
something that the system focused on. I've been--this is my
fourth tour in the Pentagon, and I've been in requirements and
readiness in most of the tours with some budget experience. But
the CNO, when he came in last year, his first priority for his
first year was current readiness. The reason that he put
together this division that I head, which is Fleet Readiness,
was to get to the real requirement and challenge all
assumptions, measure the product of the plan, a number of items
that are good business-sense issues and which we, frankly,
hadn't focused on in a number of years.
We used to have a robust requirements generation process in
the Pentagon, but we went out of that when we were top-line-
driven. So now we're back into that, and we're back into it big
time. I say that to kind of add a strategic underpinning to
understanding cannibalization and other things that we do. We
can't look at them in a stovepipe environment. We have to look
holistically.
One thing that we're doing in the Navy is we're trying to
understand why we can't execute the flying hour program and
match the hours that we had programmed to the cost per flight
hour. In other words, we fly up the money, but we don't fly the
hours. So why is it that the costs are going up? And it's more
than just cannibalization. And you've mentioned almost every
item that has to be taken into account when you look at our
ability or inability to meet the mission.
So my particular division, just to give you some idea of
what has been invested by the Navy and the Marine Corps in
trying to get to the heart of the requirements, we're the ones
responsible to assess, develop the metrics, the models, and the
methodologies for the flying hour program, manning for
aviation, training for aviation, support equipment for
aviation, publications for aviation, the programmed logistics
in order to do the analysis to decide if these parts are
reaching an age in which we ought to overhaul them instead of
just repair them. I also have depot maintenance for aircraft,
airframes, and engines, the spares, and a look at the
facilities as well as the shipping and handling of those
particular parts. Then I have about the same thing on the ship
and the submarine side, too.
So we're expending a considerable amount of effort in order
to try and find out the real requirement, that linkage to
readiness, so that we can better articulate what it is that we
need so that we can get our arms around what it really costs.
Mr. Shays. And that is a work-in-process that will have
some conclusion when, do you think?
Admiral Heimgartner. We've already been able to assess the
flying hour program for 2001 and determine what the real
shortfalls were in the flying hour program and those accounts
that support the flying hour program, and those have been
articulated with Members of Congress as well as the ongoing
supplemental negotiations within our own Department.
Then, in a formal way, because of the nature of this beast
here and the periodic nature of how we do budgets, we've
already put all those pieces into play for the PR-03 or PALM-
03, but we have good knowledge of where the key areas are from
having gone through this in 2001 as well as 2002.
Yes, we have to be patient. We can't fix something that's
been broken for a number of years, but we have to approach it.
We're dedicated and obligated to doing that.
Mr. Shays. Let me ask you this: It strikes me that you, as
commanders, want information and you want it to be as accurate
as possible. I think GAO's analysis, particularly on how the
data is organized and how we describe it, and the fact that
they think it is quite inaccurate, I think has got to be of
concern to all of you. It would strike me that you help your
cause by truly having that data be as accurate as possible.
Admiral Heimgartner. Let me address that, if I may?
Mr. Shays. Sure.
Admiral Heimgartner. Because of the Navy IG team that
visited our naval installations about 2 years ago, and other
studies and inspections that we've had, in order to get the
data that's so critical to not only making decisions at the
headquarters level, but understanding at the execution level,
down in the squadrons, how that money is being spent and then
what it's being spent on--the acronym is called NOWCOMUS
Optimized. We have a legacy NOWCOMUS which, as the GAO
mentioned, gathers as much information as it can, to use
cannibalizations as an example, and has some degree of
relevance. It's debatable whether it's 50 percent, 75 percent,
but it's less than the full requirement as to exactly how often
we cannibalize and the reasons that we cannibalize.
This new system that we're going to, which is in about a
third of our squadrons, and will be in all of the commands
associated with aviation and shipboard support by fiscal year
2004, it's impossible now to make a transaction with a part
unless it's entered into the system. There's a whole number of
reasons as to why parts are removed or the repair actions,
including a lot of degree of fidelity and granularity on
cannibalization.
So we are in the process of fixing it. We understand that,
unless you have full visibility into how the funds are being
executed, you can't make the right decisions up here in the
headquarters, and this NOWCOMUS Optimized will do that for the
Navy.
Mr. Shays. Now will the terminology be the same for all
three branches?
Admiral Heimgartner. I can't answer that, sir.
General Zettler. We're not going to implement the Navy
system there. I recognize how much you travel and have the
opportunity to talk to our great people. I think that the GAO
may have overstated a bit the lack of data in the Air Force. We
don't step up to that. We will obviously go work when the
report is published.
It's not a perfect system. We certainly miss some
maintenance transactions, but, by and large, the
cannibalization actions that we do require entries into the
system to track the aircraft status. So there's a self-checking
audit process that goes on in the automation system.
The mechanics are pretty reliable in making their data
entries. Once they've got the data in the system, we've got it
captured.
Mr. Shays. Let me ask you: Is there any disincentive,
though, to not highlight this issue? In other words, it strikes
me that you might be judged based on--well, I mean, the B-22,
when it was not in operation, you know, whether you said it was
in operation before the vacation period or after, different
factors came into play that seemed to us like real games.
General Zettler. Our field commanders are judged, obviously
on their overall readiness status, but our field commanders
also are given wide latitude in how they achieve their mission
ratings. I have not learned, nor I think we would be surprised
as an Air Force to learn, that a commander at the field level
was suppressing cannibalization data. We recognize it's a
problem. We want accurate accounting, and the mechanics are
willing to make that entry into the data base.
The shortcoming of the system probably is, after 11 hours
or 12 hours of working, when he has to go back into the shop
and enter that piece of data into the core automated
maintenance system, taking the time to do it. But, as a general
rule, I said there's checks and balances that show up that this
airplane is not mission-capable because it's got these parts
off of it. How did that part get out of it? Well, we ``canned''
it. And it gets entered.
In our data system world, we've been using the core
automated maintenance system for about 20 years. It's a dated
system. It's still green screens, but we have a refurbishment
ongoing, and shortly after the first of the year it will be a
Windows-based system and then spiral development to make it
much more user-friendly and totally capture the data that the
mechanics are doing.
But, as I said, once the mechanic puts that data into the
system, it's captured at the base-level data base. That
transfers to an Air Force data base, and then we have several
management information systems that can tap into that data
warehouse and allow us to pull it down.
The order of magnitude may be off by a couple of percents
in ``canns.'' I don't know. Maybe we're not at 12.7 in 1997.
Maybe we're 13. But that's the order of magnitude I'm really
confident with that we're dealing with.
The trendline is absolutely accurate because it's been the
same system out there over this period of time. So, from 12.7
in 1997 to 11.1 for this fiscal year, that's a significant
improvement that's going in the right direction, and we intend
to keep it going in that direction.
Mr. Shays. Mr. Kucinich, any questions?
Mr. Kucinich. Gentlemen, when you have to requisition spare
parts, are any of the spare parts from your respective branches
of the service requisitioned from overseas? I mean, are they
made overseas, the stuff that you requisition? Do you know?
Admiral Heimgartner. I don't know.
General Mahan. Sir, I could tell you that primarily, unless
we have an original equipment manufacturer, meaning a U.S.
company, that has subcontracted out overseas, we don't see
that. Ours is primarily, because of many reasons, policy as
well as statute, are pretty much defined in terms of U.S.
production facilities. I believe that is where we're headed.
Mr. Kucinich. Yes, I am familiar with the Defense
Production Act. One of the reasons I asked the question, Mr.
Chairman--and thank you, General--one of the reasons I asked
the question is this: This whole hearing today is essentially
about inventory management. As the United States continues to
see the collapse of its basic industry which provides the
parts, if not the actual equipment, that then complicates
accessing the goods that you need to do the job that you do. Is
that correct?
General Mahan. Absolutely. Yes, sir.
Mr. Kucinich. And that is why we have the Defense
Production Act to begin with. And at some point, Mr. Chairman,
that might be something that might be worthy of your
consideration. So I appreciate that, and thank you, gentlemen.
General Mahan. Mr. Chairman, if I could expand on that just
a bit?
Mr. Shays. Sure.
General Mahan. The production base--and that's really what
we're talking about, not only the organic inside our depots,
but the defense industry at large--we have gone and have seen,
and we have had, as an example, between 1999, we had 18 safety-
of-flights, which as a safety-of-flight message that says that,
if I have a catastrophic failure of this part, and we have had
one, obviously, that caused that safety-of-flight, that then we
have life and limb of the aircrews at risk.
When we went back into that on many of those, and in the
A8-64, our Apache aircraft, one of our most sophisticated
platforms, we find that they have subcontracted parts out to a
subcontractor who, in fact, defaulted, and actually the
subcontractor had in some cases contracted out to another
contractor. So the original equipment manufacturer had gotten
to the point where we were depending on a partnering effort
with them when, in fact, they were doing it for business
reasons, to the extent that we could not fly airframes.
We had the most serious one that grounded the entire Apache
aircraft fleet as a result of that, and we, then, had to go
back in and, were it not for double shifts at Corpus Christi
Army Depot, to be able to get those things remanufactured, we
would have been only this past April 2001, basically a year,
because of the extremely long lead times between administrative
lead time and production lead time of these kinds of aircraft
spares. It can be up to 2 years from the time that you sense
you have a problem until you can do something about it.
That's why, as the aircraft ages, we have some of these
design flaws that crop up only after significant aging, and one
was the Sprague clutch and flange problems inside some of our
aircraft componentry that then caused us--we had not used any
in the previous 6 to 8 years, again, that obsolete inventory
that we talk about. But when it was needed, those parts did not
meet the specifications originally manufactured to, and we had
to go back in and refurbish, again, because of the
subcontracting process.
So it's a very delicate balance between organic and
certainly OEM, but it has extended beyond OEM to then
subcontractors to that OEM. That's a balancing act in terms of
the readiness piece. So, sir, I think it very clearly underlies
your premise that says industrial preparedness is certainly an
issue.
Mr. Kucinich. Thank you, sir. Thank you, Mr. Chairman.
Mr. Shays. It strikes me we are always going to have a
cannibalization problem. It is almost like we fly our parts in
one plane and that is how we deliver the parts to the base. I
mean, you are going to have that, and you are certainly going
to have it with older aircraft. It is a marvel that our
mechanics in some cases are able to have an airworthy aircraft.
So it is going to be there, and the issue is, to what
extent? And the other issue is, in my judgment, how on top of
this you all are, how on top of it we are. It seems to me that
we have to keep working to get the data more accurate. So we
will be working with you in this process.
If there is anything you had prepared to answer that you
felt we should have asked, even if it was a tough question that
we didn't have the sense to ask you, I would love you to answer
the question you were prepared for. [Laughter.]
And if you would like to make any closing statement--see, I
like to make an assumption you stayed up all night preparing
for this and there's something that we should have asked you.
[Laughter.]
General Zettler. I would like to finish with a remark.
Mr. Shays. Sure.
General Zettler. Congressman Kucinich brought in the F-22.
Mr. Gilman brought in privatization of suppliers. I would say
that new airplanes demonstrably give us improved reliability
and improved availability.
Mr. Shays. Right.
General Zettler. The C-17 is doing marvelous for us. The
``cann'' rate on the C-17 is down less than 4, and many of
those are parts that the government supply system would
provide. We have a contracting arrangement with the Boeing
company providing overall spares management on the C-17.
They're doing a great job. Our mission availability rate is up
in the high 80 percent.
The F-117, we have the same type contractor support
arrangement on. We have an availability rate, again, in the
high 80 percent.
The KC-10, we again have a contractor arrangement providing
parts for us. Again, a high mission capability rate and a very
low ``cann'' rate.
As we move into new weapons systems, such as the F-22 or
the Joint Strike Fighter, we're optimizing those for
reliability and maintainability and availability. When we do
that, we are looking at partnering with the industry that's
going to provide those to help us with supply chain management,
to ensure us that we have improved availability.
The converse is true on our aging platforms, such as the C-
5 and the B-1 that you see over here. The B-1, the GAO properly
characterized the main problem with cannibalization on that as
being the defensive avionic system. In the defensive avionic
systems we have some parts in there that are only repaired by
one vendor in the United States, and he has a limited capacity.
And why should we incentivize him to increase that capacity
when we know that we're going to try to replace that defensive
avionic system? So we go along that line of, where do you spend
that dollar? To modernize that system or to pay for more
repairs to that system? So those are the tradeoffs that we have
to bring.
But, since those platforms were brought up, I wanted to
bring out how our new systems are doing and what the effects of
recapitalization of our Air Force can be.
Thank you for allowing us to be here today.
Mr. Shays. Thank you. It would strike me that maybe, when
we take a second look at this, we try to divide up the
different weapons systems based on age to see what the
difference is in terms of cannibalization.
General, did you want to make any comment?
General Mahan. Sir, in summary, I would like to thank the
committee for having us here today to help us articulate to
you, and I think to our Nation, some of the issues at hand.
Everyone is working as hard as they can. We are partnering with
industry, and they have been a valuable partner in ensuring
that we have tried to maintain readiness of our fleets.
We, just as the Air Force has done, are trying to eliminate
some of the old fleets that we could not incentivize the
original equipment manufacturers to continue to produce, even
if we wanted to. They are unwilling to because of the low
numbers of the airframes, and the UH-1 and the AH-1 are great
examples of that.
But, regardless, we know that, as we try to remanufacture,
we still have a long way to go. Three of our aircraft fleets in
the Army are already past their half-life metric. Because of
that, we have seen our operations and support costs increase 10
percent per year across the Army for the past 3 years.
Refurbishment and recapitalization is one of our key
initiatives to try to get back some of that life, and as we do
so, to either incorporate new technology and new reliability,
but certainly to get back to a standard that we can expect to
fly and be able to do what we need to do from a mission-
readiness and a mission-effectiveness standpoint.
So, sir, we are happy that you asked us to come, and we
look forward to working with you in the future.
Mr. Shays. Well, we are happy you came.
Rear Admiral.
Admiral Heimgartner. Thank you, sir. Let me just make a
couple of comments along the same lines as the generals have
brought out.
We just completed a very in-depth study on why the cost of
doing business, primarily repairing depot-level repairs and the
consumption rates--in other words, how often do you put parts
in an airplane and how long do they last? We, too, are showing
figures of roughly 6 to 8 percent per year, and most of our
aircraft that are on the decks of our carriers, which are in
the more extreme environments, are up at the 8 percent level.
So we have a cost of doing business that's going up 8 percent.
We're doing exhaustive studies of trying to determine how
we can flatten that curve. I mean, 8 percent compound interest
over the life of our airplanes, which now is 17 years, is a
huge, huge operational support bill. We want to flatten that
curve. You can flatten that curve by investing money into
reliability fixes, which we do as best we can, or you can buy
new airplanes.
As Congressman Kucinich mentioned earlier, about this
flattening the aging curve, the Navy needs to buy about 170
aircraft per year in order to keep the average age of our
airplanes at 15 years or less. For the last several years, the
best we have been able to do is buy 120. So if you can't invest
the money for reliability fixes and if you can't make the force
younger, then we're potentially faced with a real challenge
that may be extremely difficult to meet.
I can assure you that the readiness of our deployed units
is as high as it's ever been, but it comes on the back of those
next to deploy. Those next to deploy are the ones that are
greater than 90 days from being in the forefront of going
overseas. That's the folks that are the most frustrated, where
morale suffers. These are people that are priority 3 on parts.
These are the ones that, if there's a major component for an
airplane, that component for an airplane goes to a deployed or
a soon-to-deploy squadron.
As I said, our sailors and marines take great pride in
being able to maintain these airplanes. They will do anything,
and they have. You've seen the statistics on how long they work
and how dedicated they are. But we owe them a better workday, a
better quality of services, and we're doing the best we can to
try and quantify that with all the challenges that we faced for
a number of years.
Thank you very much, sir.
Mr. Shays. Thank you, and I think the committee agrees with
all three of your closing statements. We appreciate your good
work and look forward to working with you. Thank you.
This hearing is adjourned.
[Whereupon, at 12:25 p.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]
-