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Aug. 20 Army memorandum on privatization of repair depots, arsenals, and ammunition plants

Final (20Aug02)

MEMORANDUM FOR RECORD

SUBJECT: PED 407 PHASE III STUDY AND CONSIDERATIONS FOR PRIVATIZING OUTSOURCING OF REPAIR DEPOTS BRIEFINGS

G8 hosted PBD 407 Phase III Study briefing for SecArmy on 13 August 2002. The purpose of meeting was to present the results of PBD 407 (Ordnance Facility Rightsizing) Study. AMC also briefed on the Considerations Concerning Repair Depots Privatization

Briefers: Mr. Mike Hix (RAND - PBD 407 Study) and Mr. Luis Garcia-Baco (Army Materiel Command (AMC))

Attendees: Honorable White, Honorable Fiori, Honorable Bolton, GEN Kern, Mr. Hollis, Mr. McDonald, MG Christianson, Dr. College, Dr. McNaugher

Meeting Objectives: (1) Recommend the way ahead for further actions associated with divesting ownership of Army's Weapons Arsenals and GOCO Ammunition Plants, to the extent possible. (2) Discuss factors that would need to be addressed if the Army was to privatize (outsource) repair depots.

Outcomes: SecArmy directed AMC, with ASA (AL&T) policy oversight, to take the lead for executing RAND recommendations. AMC will propose timelines, and make progress reports to ASA (AL&T) and The Secretary, as appropriate. The SecArmy also encouraged AMC to discuss the depot initiative with OSD maintenance proponents and then, if appropriate, ascertain Depot Caucus perspective regarding potential privatization of the repair depots.

Tasker: Army Arsenals and Ammunition Plants Action Plan

AMC will submit an action plan to ASA (AL&T) for potential sale, consolidation, Federal Government Corporation, or privatization of ammunition plants and arsenals. AMC will implement RAND recommendations to the extent possible. Plan should include timelines/milestones, and actions required to complete the initiative. ASA (AL&T) should direct respective PEOs to update/complete market surveys and business case analyses related to their commodities to support retention of any Army-owned production as an exception. Lead: AMC Assist: ASA(AL&T)

Suspense: 28 Nov 02

Tasker: Army Repair Depots Privatization/Outsourcing Action Plan

Submit action plan for exploring with OSD the potential privatization of repair Depots/GOCO Conversion. Plan should include timelines/milestones, and specific actions required to complete a Business Case Analysis and Plan for the Initiative Lead: AMC

Suspense: 28 Nov 02

Compiled by: LTC Gilmartin

Approved by: Dr. College, G8