Report | Jan. 8, 2021

Audit of Depot-Level Reparable Items at Tobyhanna Army Depot (DODIG-2021-043)

Audit

Publicly Released: January 12, 2021

 

Objective

The objective of this audit was to determine whether Army officials considered and mitigated challenges to parts availability when planning and executing repair and overhaul of reparable items for Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance, and Reconnaissance (C5ISR) at the Tobyhanna Army Depot.

 

Background

C5ISR systems are the network of platforms, sensors, communications, and decision aids that connect systems to provide the DoD with critical information and capabilities. C5ISR equipment includes surveillance and weapon-locating radars, avionics, tactical and strategic communication systems, tactical missile equipment, and night vision and guidance control systems.

The Tobyhanna Army Depot (Tobyhanna), managed by the Army Communications-Electronics Command (CECOM), is a Government-owned and operated installation that maintains and repairs complex military systems and equipment (referred to as depot-level reparable items) that require overhauling, upgrading, rebuilding, or testing for C5ISR systems across the DoD. Tobyhanna is the primary C5ISR provider for the Army and the Air Force, and also performs work for the Navy and Marine Corps.

During the depot-level repair process, Tobyhanna uses a mix of reparable and consumable parts. The Defense Logistics Agency (DLA) manages most of the consumable parts for the DoD. Each part in the Federal supply system has a national stock number (NSN)—a unique item identifier applied to an item of supply. When Tobyhanna purchases a part outside of the DLA supply system, Tobyhanna officials can notify the DLA of that purchase through a demand history adjustment. The demand history adjustment enables the DLA to consider that purchase in planning for future purchases of the part.

 

Finding

CECOM addressed challenges to parts availability within the planning process for depot-level repairs performed at Tobyhanna. Specifically, CECOM developed process improvements and initiated corrective action plans to address parts availability challenges that caused schedule slippages and inaccuracies in bills of material (parts listings) for C5ISR weapon systems. However, CECOM and Tobyhanna faced challenges in other aspects of the depot-level repair process for C5ISR items. These challenges may affect future parts availability and timeliness.

Specifically, CECOM, in conjunction with Tobyhanna, did not submit 463 of 503 manufacturer parts purchased by Tobyhanna to the DLA Logistics Information Service for NSN assignment because CECOM and Tobyhanna did not develop procedures to request NSNs for manufacturer parts purchased more than two times within 180 days as required by DoD and Army policy. Because CECOM and Tobyhanna did not request NSNs for 463 manufacturer parts, Tobyhanna missed out on potential savings that the DLA may have obtained by purchasing the items on behalf of Tobyhanna. Of the 503 parts purchased by Tobyhanna, CECOM personnel submitted 36 parts for NSN assignment, for which the DLA Logistics Information Service established 29 NSNs. For these NSNs, the Army could save approximately 21 percent if Tobyhanna purchases the items through the DLA in the future.

 Furthermore, the process of assigning an NSN leads to better visibility and control of supplies. Creating NSNs helps to ensure that spare parts are available throughout a system’s life cycle. NSNs provide critical information like the item’s manufacturer, dimensions, and cost.

In addition, Tobyhanna personnel did not correctly submit demand history adjustments to notify the DLA of 1,653 local purchases of 1,197 parts (NSNs) that Tobyhanna purchased outside of the DLA supply chain. Tobyhanna personnel stated that they used incorrect identification numbers to report the transactions to the DLA. Because Tobyhanna did not correctly submit demand history adjustments, the DLA did not capture all demand for NSNs that Tobyhanna purchased outside of the DLA supply chain. If Tobyhanna does not notify the DLA of these purchases, the DLA is not aware of the demand for the part and cannot forecast accurately to meet demand. Demand forecasting affects the DLA’s inventory decisions, which can reduce lead times and potentially reduce cost.

 

Recommendations

We recommend that the CECOM Commander:

• evaluate the implementation of the corrective actions designed to improve parts availability
   and determine whether these corrective actions resolved the challenges identified;

• submit the 463 manufacturer parts that we identified as meeting the criteria for NSN
   assignment to the DLA Logistics Information Service for NSN assignment;

• analyze transactions from February 1, 2020, through the present to identify additional
   manufacturer parts that meet the NSN assignment criteria and submit those parts for NSN
   assignment; and

• establish a formal process or procedure for identifying parts that meet the NSN assignment
   criteria and submitting those parts to the DLA Logistics Information Service for NSN
   assignment.

We recommend that the Tobyhanna Army Depot Commander establish procedures to ensure that depot personnel accurately process demand history adjustment transactions and report them in a timely manner to the DLA for all DLA-managed NSNs procured outside the DLA supply system.

 

Management Comments and Our Response

The U.S. Army Deputy Chief of Staff, G-4, responding for the CECOM Commander and the Tobyhanna Army Depot Commander, agreed with five recommendations and partially agreed with one recommendation. The comments from the Deputy Chief of Staff addressed the intent of all recommendations. Five recommendations are resolved and open and one recommendation is closed. We will close the remaining five recommendations once management provides documentation demonstrating that it has implemented the presented actions.

 

This report is the result of Proj. No. D2020-D000RK-0031.000.