Improved Guidance Needed to Establish Role of Arsenals, GAO Finds

To maintain the critical capabilities of its three manufacturing arsenals, the Army should develop guidelines for officials to follow when deciding whether to purchase items from the arsenals or from the private sector, the Government Accountability Office (GAO) recommends in a new report.

GAO called for the Army to issue “clear, step-by-step implementing guidance, such as an instruction or guidebook, on the process for conducting make-or-buy analyses in a consistent manner.”

The lack of such guidance likely has hampered the Pentagon’s efforts to encourage the military to consider the arsenals as a source of manufacture, the agency concluded. To offset a decline in demand for materiel from the arsenals — Pine Bluff Arsenal, Ark; Rock Island Arsenal Joint Manufacturing and Technology Center, Ill.; and Watervliet Arsenal Joint Manufacturing and Technology Center, N.Y. — the Army has directed acquisition programs to assign work to the arsenals consistent with their capabilities. Those actions have increased revenue, but not sufficiently to recover the facilities’ operating expenses, according to the report.

The congressional watchdog agency also recommended that the deputy assistant secretary of defense for maintenance policy and programs — in conjunction with the services — “complete DOD’s ongoing effort to establish a process for identifying the manufacturing arsenals’ critical capabilities and a method for determining the minimum workload needed to sustain these capabilities.” A separate recommendation calls for the department to issue guidance to implement that process.

Because DOD’s actions from 2012 to 2014 did not generate sufficient revenue for the arsenals, Congress provided $375 million collectively in fiscal years 2014 and 2015 to help recover the arsenals’ operating expenses.

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