Depot Maintenance Statute - Title 10 USC 2464

Key aspects of the statute include the following:

• DoD must maintain a core logistics capability that is government-owned and government-operated (by the DoD) to ensure a ready and controlled source of technical competence and resources needed to respond to military mobilization, contingencies and other emergencies.
• The Secretary of Defense (SECDEF) shall identify required core logistics capabilities and the workload required to maintain those capabilities. (In practice, the individual military Services identify recommended core capability requirements and associated workloads to the SECDEF.)
• Core logistics capabilities are those capabilities necessary to maintain and repair weapon systems and military materiel necessary to fulfill the strategic and contingency plans prepared by the Joint Chiefs of Staff (JCS) in accordance with Title 10 USC 153a:  Joint Chiefs of Staff, Chairman Functions. (Thus, it is with this stipulation that the statute defines core logistics capabilities as maintenance capabilities. In subsequent text that establishes the requirement for the Biennial Core Report, the statute further defines core logistics capabilities as “core depot-level maintenance and repair” capabilities.)
• The SECDEF shall require performance of core logistics workloads in peacetime necessary to maintain core logistics capabilities. Such workload must be assigned in sufficient volume necessary to ensure cost efficiency and technical competence in peacetime while preserving surge and reconstitution capabilities necessary to support the JCS contingency plans.
• Core capabilities required to support a weapon system under development must be established within four years of achieving Initial Operating Capability (IOC).
• Exclusions to the requirement for core capability include:
  • Commercial items, which are defined as items that have been sold or leased in substantial quantities to the general public and are purchased (by the Federal Government) without modification or with minor modification. The SECDEF must formally notify Congress of any commercial items identified as qualifying for this statutory exclusion.
  • Equipment under special access programs
  • Nuclear aircraft carriers
• Core is not Service-specific. Core capability can be maintained at any Government-owned, Government-operated facility operated within the DoD. Thus, core capability required for maintaining the weapon systems of one Service (e.g., Air Force ground communications equipment) can be maintained at a depot of another Service (e.g., Tobyhanna Army Depot).
• Workload needed to maintain core logistics capabilities may not be contracted for commercial performance under Office of Management and Budget (OMB) Circular A-76 procedures unless specifically waived by the SECDEF and reported to Congress.
• The following core-related acquisition cycle requirements were established by National Defense Authorization Act (NDAA) for FY 2013:
  • Title 10 USC 4251, Major defense acquisition programs: determination required before Milestone A approval, requires that determination of the applicability of core logistics requirements must be completed prior to program Milestone A approval.
    • DoD Implementing guidance states that the scope of this analysis should be limited to determining whether the entire system, or particular subsets of the system, is considered to require core depot maintenance capability.
  • Title 10 USC 4252, Major defense acquisition programs: certification required before Milestone B approval requires that an estimation of requirements for core logistics capabilities must be completed prior to program Milestone B approval.
  • Low-Rate Initial Production (LRIP): Prior to entering into an LRIP contract, the SECDEF must ensure that detailed requirements for core logistics capabilities and associated sustaining workloads have been identified. 
  • Congressional Reporting Requirement. The statute establishes the following reporting requirement:
    • Biennial Core Report. Not later than 1 April of each even-numbered year, SECDEF must submit to Congress a report of the following:
      • Core depot-level maintenance requirements and associated sustaining workloads sorted by work breakdown structure and expressed in direct labor hours (DLH).
      • Workloads necessary to sustain core depot-level maintenance expressed in DLH and cost.
      • In any case where core requirements are expected to exceed sustaining workloads, a rationale for the shortfall along with a plan for mitigating or correcting the shortfall
    • Comptroller Review - The comptroller must review each report for completeness and compliance and provide the results to Congress within 60 days of the report’s submission to Congress.
• Although 10 USC 2464 is commonly associated with the 50-50 statute (Title 10 USC 2466, Limitations on the performance of depot-level maintenance of materiel), there are some significant differences:
  • The core requirement is levied on the SECDEF, while the 50-50 requirement is levied on the military departments and Defense Agencies.
  • Core is commonly measured in direct labor hours (DLH), while compliance with 50-50 is measured in dollars.
  • The calculation of core capability requirements is deterministic, in that it is driven by certain real-world factors stipulated in DoD Instruction (DoDI) 4151.20, Depot Core Capabilities Determination Process. 50-50, on the other hand, establishes an arbitrary contract ceiling.
  • Core is determined on a weapon system/item basis, based on whether or not the item is “tasked” in a JCS contingency scenario. 50-50, on the other hand, is calculated at the military department/Defense Agency level. Which weapon systems are repaired in which sector (public or private) is not a consideration for 50-50. However, weapon systems that are primarily depot-maintained via contract may potentially need to be “compensated” for by organic workload of other weapon systems to prevent a 50‑50 breach.
  • While core capability requirements are driven by individual weapon system characteristics, which provides some level of certainty in core capability planning for individual programs, 50-50 compliance is managed at the military department level, and its applicability to individual programs may not be as easily discernable, thus potentially introducing a higher level of uncertainty for individual programs in 50-50 compliance planning. Circumstances entirely outside a Program Manager’s (PM) control may drive organic depot maintenance assignment, even when the weapon system does not require core capability, and the business case analysis (BCA) has led to establishment of contract depot maintenance. For such weapon systems, at any point in time, it might become necessary to arbitrarily reassign contract depot workload to an organic source in order to ensure 50-50 compliance.
  • Core workload performed organically contributes to 50-50 compliance, but, in and of itself, does not necessarily ensure 50-50 compliance. Additional “non-core” workload may need to be assigned to organic sources to ensure that the contract ceiling is not breached.