THE ESTIMATED EFFECT OF CORROSION ON THE COST AND AVAILABILITY OF ARMY AVIATION AND MISSILE SYSTEMS

Transcription

1 THE ESTIMATED EFFECT OF CORROSION ON THE COST AND AVAILABILITY OF ARMY AVIATION AND MISSILE SYSTEMS REPORT AKN31T1 Eric F. Herzberg Trevor K. Ch an Norman T. O Meara MAY 2014

2 NOTICE: THE VIEWS, OPINIONS, AND FINDINGS CON- TAINED IN THIS REPORT ARE THOSE OF LMI AND SHOULD NOT BE CONSTRUED AS AN OFFICIAL AGENCY POSITION, POLICY, OR DECISION, UNLESS SO DESIGNATED BY OTHER OFFICIAL DOCUMENTATION. LMI ALL RIGHTS RESERVED.

3 The Estimated Effect of Corrosion on the Cost and Availability of Army Aviation and Missile Systems AKN31T1/MAY 2014 Executive Summary LMI was tasked by the Corrosion Prevention and Control Integrated Product Team (CPC IPT) in August 2012 to measure the effect of corrosion on the availability and cost of Army aviation and missile systems. Using data from FY2012, 1 we estimated the annual corrosion-related cost to be $1,963 million, or 21.9 percent of the total maintenance costs for all Army aviation and missile systems. We also estimated that corrosion was a contributing factor in 2,026,102 non-availability hours (NAH) for Army aviation assets. This figure represents 18.1 percent of the total NAHs reported by the Army for its aircraft and equates to an average of 472 hours, or 19.7 days, of corrosion-related non-availability per year for Army aircraft or missile systems. This review is part of a multiple-year plan to measure the effect of corrosion on DoD weapon systems. It is the third study to assess the effect of corrosion on maintenance costs and the second study to analyze the effect of corrosion on Army aviation and missile system availability. 2 Table ES-1 lists previous Army aviation and missile system studies on the cost of corrosion, while Table ES-2 lists all DoD studies on the effect of corrosion on availability. Table ES-1. Army Aviation and Missiles Cost-of-Corrosion Studies Study year a Data baseline Estimated annual cost of corrosion Corrosion as a percentage of total maintenance FY2005 $1,654 million 18.6% FY2007 $1,277 million 17.3% FY2008 $1,486 million 21.0% FY2009 $1,261 million 16.8% FY2010 $1,704 million 20.1% FY2011 $1,929 million 20.6% FY2012 $1,963 million 21.9% a Study period is 1 calendar year. 1 Data was collected for FY , but we based the corrosion-related cost and availability of Army aviation and missile systems on FY2012 data. 2 DoD funded these studies. iii

4 Table ES-2. DoD Studies on the Effect of Corrosion on Availability Study year a Data baseline Study segment Annual non-available time attributable to corrosion Total Avg. per end item FY Army aviation and missiles 1,717,898 hours 17.4 days Navy and Marine Corps aviation 95,237 days 26.5 days Air Force 2,102,476 hours 15.9 days FY Army ground vehicles 662,649 days 1.7 days FY Marine Corps ground vehicles 209,115 days 3.3 days FY Army aviation and missiles 2,026,102 hours 19.7 days a Study period is 1 calendar year. Availability results are based on the last year of the data baseline. Maintenance expenditures fluctuate and supplemental maintenance funding is variable; so, too, are corrosion-related cost totals. Therefore, corrosion cost as a percentage of maintenance is a better indicator of any overall trends when looking at the effect of corrosion on the cost of weapon systems. The corrosion-related average of 21.9 percent of total annual Army aviation and missile system maintenance costs is roughly midrange for the DoD weapon systems we have studied. This percentage has been increasing steadily over the last 4 fiscal years (FY ). The scope of our study included all Army aviation and missile end items and major subcomponents in inventory during FY In that period, 69 types of aircraft and 12 missile systems existed at the type, model, and series (TMS) level of detail, which equates to more than 4,500 aircraft and missiles. 3 Also included were 50,000 major aircraft and missile subcomponents. To assess corrosion s effect, we segregated the Army s corrosion-related costs into three separate schemas: depot versus field-level maintenance, corrective versus preventive costs, and costs associated with structure versus parts. Table ES-3 shows both the costs and percentages within each schema for FY2012. Table ES-3. Nature of Corrosion-Related Costs for Army Aviation and Missile Systems (FY2012) Schema for corrosion-related costs Corrosion-related cost (in millions) Percentage (within schema) Depot maintenance (DM) $ % 1 2 Field-level maintenance (FLM) $1, % Maintenance outside normal reporting $53 2.8% Total $1, % Corrective maintenance $ % Preventive maintenance $1, % Unable to classify $4 0.2% Total $1, % 3 To our knowledge, this includes all types of Army aviation and missile systems. iv

5 Executive Summary Table ES-3. Nature of Corrosion-Related Costs for Army Aviation and Missile Systems (FY2012) 3 Schema for corrosion-related costs Corrosion-related cost (in millions) Percentage (within schema) Structure $ % Parts $1, % Unable to classify $42 2.2% Total $1, % Field-level maintenance accounted for 58.0 percent ($1,139 million) of the combined corrosion-related cost for Army aviation and missile systems within schema 1 ($1,963 million). However, in terms of percentage of overall maintenance, corrosion-related DM costs exceeded corrosion-related FLM costs. The corrosionrelated DM cost as a percentage of total Army aviation and missile system DM was 29.3 percent; the same FLM measure was only 18.7 percent (see Table ES-4). Table ES-4. Comparison of DM and FLM Corrosion-Related Cost for FY2012 Type of maintenance Total maintenance cost (in millions) Corrosion-related cost (in millions) Percentage of corrosionrelated maintenance cost Depot $2,627 $ Field-level $6,081 $1, The remaining $53 million for corrosion-related maintenance that is outside normal reporting reflects the maintenance performed by operators with a nonmaintenance occupation specialty, which typically is not recorded in standard maintenance systems. Costs incurred to prevent corrosion (e.g., inspecting, treating, coating, washing) were far higher ($1,634 million versus $272 million) than those for corrosion-related corrective actions (e.g., fixing, replacing, and blasting). This 6-to-1 ratio is likely exaggerated by the lack of detail in Army maintenance records. The lack of descriptive text shifts the ratio of corrosion costs in favor of preventive classifications. Parts-related costs ($1,330 million) were also significantly higher than structurerelated costs ($538 million). We also stratified the corrosion-related costs of Army aviation and missile system systems by TMS, total cost, and cost per item, ranking systems by their total and average corrosion-related costs. Aircraft and missile systems with both a high total cost of corrosion and a high average cost of corrosion per item merit the most attention. We identified five aircraft that were among the top 10 contributors for both (see shaded entries in Table ES-5). Each of these five aircraft presents a specific opportunity for the Army to focus resources to mitigate the negative effect of corrosion. v

6 Table ES-5. Highest Combined Ranking for Average and Total Corrosion Cost (FY2012) TMS Description Total corrosion cost (in millions) Corrosion cost rank Corrosion cost per item (in millions) Per-item corrosion cost rank Combined rank score UH-60L Utility helicopter $ $ MH-47G Special operations helicopter $ $ OH-58D Observation helicopter $ $ UH-60M Utility helicopter $ $ CH-47D Cargo helicopter $ $ AH-64D Attack helicopter $ $ UH-60A Utility helicopter $ $ MH-60M Special operations helicopter $ $ MH-60L Special operations helicopter $ $ EH-60A Electronics helicopter $ $ Corrosion-related NAHs (2,026,102 hours) accounted for 18.1 percent of the total non-availability reported. 4 We show in Table ES-6 the highest 10 contributors to corrosion-related NAHs. Two utility helicopters, the UH-60L and UH-60A, had the highest corrosion-related NAHs. The OH-58D observation helicopter accounts for both the highest percentage of corrosion-related NAHs to total NAHs and the highest average corrosion-related NAHs per aircraft. Table ES-6. Comparison of Corrosion-Related NAHs to Total NAHs (FY2012) Related to corrosion TMS Description Avg. number of aircraft Total NAHs NAHs Percentage of total NAHs Avg. NAHs per aircraft UH-60L Utility helicopter 832 2,288, , % 532 UH-60A Utility helicopter 672 2,017, , % 506 AH-64D Attack helicopter 663 1,602, , % 432 OH-58D Observation helicopter , , % 681 CH-47D Cargo helicopter , , % 593 TH-67A Training helicopter , , % 609 OH-58A Observation helicopter , , % 590 UH-60M Utility helicopter ,838 73, % 329 CH-47F Cargo helicopter ,344 57, % 383 C-12V Passenger and light cargo ,504 33, % 372 helicopter 4 We measured the total corrosion-related non-available hours in a manner consistent with how the Army reports its NMC results. vi

7 Executive Summary With the exception of the OH-58D, the range of percentages for corrosion-related NAHs in Table ES-6 is fairly narrow. This indicates common causes of corrosion likely affect these aircraft in a common way. The relationship between corrosion cost and corrosion-related non-availability is strong for Army aviation and missile systems. The systems that experience the highest corrosion-related cost also suffer high corrosion-related non-availability (see Table ES-7). Table ES-7. Total Corrosion-Related Cost and NAHs by TMS (FY2012) Corrosion-related cost Corrosion-related non-availability TMS Rank Total corrosion cost (in millions) Corrosion as a percentage of total maintenance Rank Total corrosion NAH Corrosion NAHs as a percentage of total NAH UH-60L 1 $ % 1 442, % AH-64D 2 $ % 3 286, % UH-60A 3 $ % 2 340, % OH-58D 4 $ % 4 236, % CH-47D 5 $ % 5 154, % UH-60M 6 $ % 8 73, % UH-60A (E21985) 7 $ % ENGT-701D 8 $ % MH-47G 9 $ % ENGT $ % Four of the 10 aircraft and missile systems with the highest total corrosion cost had no reported non-availability (depicted in the last four rows of Table ES-7). However, the six aircraft with the highest total corrosion cost were among the top eight aircraft for high total corrosion-related NAHs. 5 This is actually good news. Efforts to mitigate the cost of corrosion on these aircraft should also increase availability. 5 This correlation was statistically strong. To calculate the correlation, we used a statistical formula based on an R-squared value. An R-squared value of 100 percent shows a perfect correlation; whereas 0 percent indicates no correlation at all. For the FY2012 study period, the R-squared value of the relationship between the corrosion-related cost and corrosion-related NAH rankings by TMS was 89 percent. vii

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9 Contents Chapter 1 Background and Analysis Method STUDY OBJECTIVES ANALYSIS METHOD Summary of Availability Methodology Study Method Limitations ARMY AIRCRAFT ORGANIZATION Aviation Maintenance Structure Corrosion Organization Aviation Weapon System List DATA STRUCTURE AND ANALYSIS CAPABILITIES REPORT ORGANIZATION Chapter 2 Army Aviation and Missiles Corrosion Costs ARMY AVIATION AND MISSILE DM COST OF CORROSION (NODES A AND B ) Depot Maintenance Corrosion Cost Tree Organic DM Corrosion Costs (Nodes A1 and B1 ) Organic DM Data Bottom-Up Organic DM Labor Corrosion Cost (Node A1 ) Commercial DM Corrosion Costs (Nodes A2 and B2 ) FLM COST OF CORROSION (NODES C AND D ) Top-Down Analysis Bottom-Up Analysis ONR COST OF CORROSION (NODES E, F, AND G ) Labor of Non-Maintenance Aviation Equipment Operators (Node E ) RDT&E and Facilities Costs (Node F ) Purchase Cards (Node G ) FINAL ARMY AVIATION AND MISSILE EQUIPMENT CORROSION COST TREE (NODES A THROUGH G ) SUMMARY AND ANALYSIS OF AVIATION AND MISSILE EQUIPMENT CORROSION COSTS ix

10 Corrosion Costs by Equipment Type Corrosion Costs by AWBS CORROSION COSTS CORRECTIVE VERSUS PREVENTIVE COSTS CORROSION COSTS PARTS VERSUS STRUCTURE Chapter 3 Determining Corrosion s Effect on Availability CURRENT ARMY AVAILABILITY REPORTING Reporting Metrics DETERMINING NMC STATUS DETERMINING CORROSION-RELATED WORK SUMMARY OF RESULTS Maintenance Records Flagged for Corrosion Corrosion-Related NAH CORROSION-RELATED NON-AVAILABILITY VARIOUS DATA VIEWS Corrosion-Related Non-Availability by TMS Corrosion-Related Non-Availability by System Chapter 4 The Relationship between Corrosion-Related Cost and Corrosion-Related Non-Availability CORROSION-RELATED COST AND NON-AVAILABILITY BY TMS CORROSION-RELATED COST AND AVAILABILITY BY WBS CORROSION-RELATED COST AND AVAILABILITY BY NATURE OF WORK Appendix A Army Aviation and Missile Equipment Appendix B Army Aviation and Missile Equipment Corrosion Cost Data Sources by Node Appendix C Corrosion Search Algorithm Appendix D Aviation Work Breakdown Structure Coding Appendix E Army Survey Results Appendix F Corrosion NAH by Aircraft for FY2009 FY2012 Appendix G Abbreviations x

11 Contents Figures Figure 1-1. The Relationship between Spending on Corrosion-Related Maintenance and Availability Figure 1-2. Availability over Time at Zero Corrosion-Related Spending Figure 1-3. Army Organizations with a Major Role in Acquisition and Sustainment of Aviation and Missile Systems Figure 1-4. Organizational Structure with DM Responsibility Figure 1-5. AMCOM LCMC Corrosion Organization Figure 1-6. Data Structure and Methods of Analysis Figure 2-1. Army Sustainment Corrosion Cost Tree Figure 2-2. Army Aviation and Missile Depot Maintenance Costs (in millions) Figure 2-3. Army Aviation and Missile Equipment Organic DM Corrosion Costs ($ in millions) Figure 2-4. Organic DM Labor Costs for Army Aviation and Missiles (in millions) Figure 2-5. Example of a Corrosion Keyword Search from Army Organic Depot LMP Data Figure 2-6. Organic DM Army Aviation and Missile Equipment Materials Cost Tree Section (in millions) Figure 2-7. Commercial DM Army Aviation and Missile Equipment Cost Tree Section ($ in millions) Figure 2-8. Use of Corrosion Ratios to Determine Commercial DM Corrosion Cost (Notional Example AH-64D Helicopter) Figure 2-9. Army Aviation and Missile Equipment FLM Corrosion Cost ($ in millions) Figure Army Aviation and Missile Equipment Organic FLM Labor Corrosion Cost ($ in millions) Figure Army Aviation and Missile Equipment Organic FLM Materials Corrosion Cost ($ in millions) Figure Army Aviation and Missile Equipment Commercial FLM Labor Corrosion Cost ($ in millions) Figure Army Aviation and Missile Equipment Commercial FLM Materials Corrosion Cost ($ in millions) Figure Army Aviation and Missile Equipment Corrosion ONR Costs ($ in millions) Figure Final Army Aviation and Missiles Corrosion Cost Tree, FY Figure 3-1. Army Aviation Availability Reporting Metrics xi

12 Tables Table 1-1. DoD Cost-of-Corrosion Studies to Date and Future Efforts Table 1-2. DoD Corrosion-Related Availability Studies to Date and Future Efforts Table 2-1. Army Aviation and Missile Organic and Commercial Depot Costs (in millions) Table 2-2. Workload for Army Aviation and Missiles (in millions) Table 2-3. Illustration of Flagging and Calculating Corrosion Costs Table 2-4. Illustration of Allocation of Materials Costs to Labor Records Table 2-5. AWBS End-Item-Type Codes Table 2-6. AWBS Maintenance Activity Codes Table 2-7. AWBS System Codes Table 2-8. Example of AWBS Subsystem Codes and Descriptions in System 31 Fire Control System and Target Acquisition Table 2-9. Staffing Levels and Cost by Military Component for Army FLM Maintainers, FY Table Army Combined OP-31 and OP-32A Spares and Repair Parts Consumables Budget, FY Table Staffing Levels and Cost by Military Component for Army Aviation and Missile Field-Level Maintainers Table Army Combined OP-31 and OP-32A Aviation and Missile Spares and Repair Parts Consumables Budget, FY Table Number of Army Aviation and Missile Equipment by Type and Military Component Table Summary of Time Spent on Corrosion Maintenance by Non- Maintenance Personnel Who Operate Aviation and Missile Equipment Table Corrosion Cost of Non-Maintenance Personnel Who Operate Aviation and Missile Equipment Table Possible Army Aviation Weapon System or Equipment Corrosion RDT&E Projects, FY Table Army Aviation DM and FLM Corrosion Costs ($ in millions) Table Army Aviation and Missiles Corrosion Cost by Node and Sub-Node (in millions) Table Army Aviation Cost Trends for Fluctuating Corrosion Cost by Sub-Node ($ in millions) Table Top 10 Contributors to Army Aviation Corrosion Costs, FY xii

13 Contents Table Top 10 Aviation or Missile Types by Average Corrosion Cost per Item, FY Table Highest Combined Ranking for Average and Total Corrosion Cost, FY Table Corrosion Cost and Maintenance Cost Ranking by the Second AWBS Character Table Corrosion Cost and Maintenance Cost Ranking by AWBS Major System Character Table Top 10 Airframe Cost by TMS Table Airframe Corrosion Cost by Subsystem Table Aviation and Missile Equipment Corrective and Preventive Cost Table How the Level of Record Detail Can Affect the Preventive-to-Corrective Corrosion Cost Ratio Table Corrective and Preventive Cost Example Table Aviation and Missile Equipment Corrosion Cost by Parts versus Structure Table 3-1. Illustration of Army Aviation Availability Reporting Table 3-2. Total NAH for the 20 Largest Army Aircraft TMS by Average Number of Aircraft Reported, FY Table 3-3. NAH Due to Maintenance for 20 Army Aircraft TMS, FY2009 FY Table 3-4. FLM Status Codes Depicting NMC Status Table 3-5. Corrosion Search Algorithm Steps Table 3-6. An Example of Calculating the Effect of Corrosion on NAH Table 3-7. Maintenance and Availability Records for Army Aviation, FY Table 3-8. NAH Reported for Army Aviation, FY Table 3-9. Maintenance and Availability for Army Aviation All Categories of Reporting, FY Table Corrosion s Impact on FLM NAH by TMS for All Army Aircraft, FY Table Corrosion Impact on DM NAH by TMS for All Aircraft, FY Table Corrosion s Impact on Total NAH by TMS for All Aircraft, FY Table Corrosion s Impact on FLM NAH by Aircraft System for All Aircraft, FY Table Corrosion s Impact on DM NAH by Aircraft System, FY Table Corrosion s Impact on Total NAH by Aircraft System, FY xiii

14 Table 4-1. Corrosion-Related Cost and NAH by TMS, FY Table 4-2. Average Corrosion-Related Cost and NAH by TMS, FY Table 4-3. Total Corrosion-Related Cost and NAH by System, FY Table 4-4. Total Corrosion-Related Cost and NAH by Nature of Work, FY xiv

15 Chapter 1 Background and Analysis Method Congress, concerned with the high cost of corrosion, enacted legislation in December 2002 that assigned the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]) with the policy and oversight responsibilities for preventing and mitigating the effects of corrosion on military equipment and infrastructure. 1 To perform its mission of preventing and mitigating corrosion, fulfill congressional requirements, and respond to Government Accountability Office (GAO) recommendations, the USD(AT&L) established the Corrosion Prevention and Control Integrated Product Team (CPC IPT), a cross-functional team of personnel from all the military services as well as representatives from private industry. In response to a GAO recommendation to develop standardized methodologies for collecting and analyzing corrosion cost, readiness, and safety data, 2 the CPC IPT created standard methods to measure both the cost 3 and availability 4 impact of corrosion for DoD s military equipment and infrastructure. In April 2006, the CPC IPT published the results of the first corrosion-related cost study, 5 which used the standard corrosion-related cost estimation method. The first study to measure the effects of corrosion on weapon systems availability was completed in We present the results of the subsequent cost studies in Table 1-1 and the availability studies in Table 1-2. More recently, LMI was tasked by the CPC IPT with measuring both the corrosion-related cost and the effect of corrosion on weapon system availability for all DoD aviation and ground vehicle assets. The current annual cost of corrosion for DoD is $23.7 billion. We derived this total by aggregating the most recent cost of each study segment (less the totals from the Coast Guard aviation and vessels study). 6 1 The Bob Stump National Defense Authorization Act for Fiscal Year 2003, Public Law , 2 December 2002, p. 201; Public Law was enhanced by Public Law , The National Defense Authorization Act for Fiscal Year 2008, Section 371, 28 January GAO, Opportunities to Reduce Corrosion Costs and Increase Readiness, GAO , July 2003, p LMI, Proposed Method and Structure for Determining the Cost of Corrosion for the Department of Defense, Report SKT40T1, Eric F. Herzberg, August DoD CPC IPT, The Impact of Corrosion on the Availability of DoD Weapon Systems and Infrastructure, October LMI, The Annual Cost of Corrosion for Army Ground Vehicles and Navy Ships, Report SKT50T1, Eric F. Herzberg et al., April We disregarded the Coast Guard aviation and vessels total of $0.3 billion in this study, because they are part of the Department of Homeland Security. 1-1

16 Table 1-1. DoD Cost-of-Corrosion Studies to Date and Future Efforts Study year a Data baseline Study segment Annual cost of corrosion FY2004 Army ground vehicles $1.6 billion FY2004 Navy ships $3.4 billion FY2005 DoD facilities and infrastructure $1.8 billion FY2005 Army aviation and missiles $1.6 billion FY2005 Marine Corps ground vehicles $0.5 billion FY Navy and Marine Corps aviation $4.1 billion FY Coast Guard aviation and vessels $0.3 billion FY Air Force $4.3 billion FY Army ground vehicles $2.3 billion FY Navy ships $2.9 billion FY2006 DoD other equipment $5.1 billion FY Marine Corps ground vehicles $0.4 billion FY DoD facilities and infrastructure $1.9 billion FY Army aviation and missiles $1.5 billion FY Air Force $5.4 billion FY Navy and Marine Corps aviation $3.8 billion FY Navy ships $3.8 billion FY Army ground vehicles $1.4 billion FY Marine Corps ground vehicles $0.4 billion FY Army aviation and missiles $1.9 billion FY DoD facilities and infrastructure Pending a Study period is 1 calendar year. Table 1-2. DoD Corrosion-Related Availability Studies to Date and Future Efforts Study year a Data baseline Study segment Annual non-availability due to corrosion Average annual corrosionrelated NADs per end item FY Army aviation and missiles 1,717,898 hours 17.4 days Navy and Marine Corps 95,237 days 26.5 days aviation Air Force 2,102,476 hours 15.9 days FY Army ground vehicles 662,649 days 1.7 days FY Marine Corps ground vehicles 209,115 days 3.3 days FY Army aviation and missiles 2,028,590 hours 19.7 days Note: NAD = non-available day. a Study period is 1 calendar year. Future cost and availability studies will produce updates to help the services identify trends over time. 1-2

17 Background and Analysis Method This report presents the results of our analysis on the effects of corrosion on both maintenance cost and availability of Army aviation and missiles. This is the second study to quantify the effects of corrosion on the availability, and the third study to quantify the effect of corrosion on costs of Army aviation and missiles. STUDY OBJECTIVES We had five specific objectives for this study: ANALYSIS METHOD 1. Estimate the most recent annual sustainment cost of corrosion for Army aviation and missile assets. 2. Estimate the most recent corrosion-related effect on availability for Army aviation and missile assets. 3. Identify corrosion-related, cost-reduction opportunities for Army aviation and missile assets. 4. Identify corrosion-related, availability-improvement opportunities for Army aviation and missile assets. 5. Analyze trends and draw conclusions using both the initial and most recent cost-of-corrosion studies for Army aviation and missile assets. We applied the same analysis methods to Army aviation assets as those outlined in the original corrosion reports we produced for the CPC IPT. For the sake of brevity, we provide only a short description of those methods in this report. Chapter 2 of The Impact of Corrosion on the Availability of DoD Weapon Systems and Infrastructure 7 contains more information on how we measured the effect of corrosion on availability. To ensure consistency, we used the definition of corrosion that Congress developed: The deterioration of a material or its properties due to a reaction of that material with its chemical environment. 8 We have applied this definition of corrosion to each corrosion study. 7 LMI, The Impact of Corrosion on the Availability of DoD Weapon Systems and Infrastructure, Report DL907T1, Eric F. Herzberg, October Bob Stump, p

18 Our estimation method for availability impact segregates maintenance activities by their source and nature, using the following three schemas: Depot corrosion non-available hours incurred while performing depot maintenance, or DM Field corrosion non-available hours incurred while performing organizational or intermediate maintenance, referred to as field-level maintenance, or FLM Corrective corrosion non-available hours incurred while addressing an existing corrosion problem Preventive corrosion non-available hours incurred while addressing a potential future corrosion issue Structure direct corrosion non-available hours incurred by the body frame of a system or end item Parts direct corrosion non-available hours incurred by a removable part of a system or end item. Summary of Availability Methodology To estimate the corrosion impact on availability, we used a combined top-down and bottom-up approach. For the top-down portion, we used monthly reporting of notmission-capable (NMC) hours by the Army for each aircraft. This established a maximum total for corrosion-related non-available hours in each maintenance area. For the bottom-up portion, we used detailed work order records to aggregate actual occurrences of corrosion maintenance activities. We identified those records that accounted for the reported top-down, non-available hours within the bottom-up data. We aggregated the corrosion-related non-available hours associated with only these maintenance records. This approach established a minimum level of corrosion-related non-availability in each activity area. Where necessary, we used statistical methods to bridge any significant gaps between the top-down and bottom-up figures and derived a final estimate for the effect of corrosion on non-availability in each area of maintenance. In terms of corrosion-related costs, we found it useful to determine the ratio between corrective costs and preventive costs. Over time, it is usually more expensive to fix a problem than it is to prevent a problem. But it is also possible to overspend on preventive measures. Classifying maintenance records into corrective and preventive maintenance helps decision makers strike the appropriate balance between the two categories and minimize the overall cost of corrosion. 9 According to the ISO 9000:2000 definition of corrective and preventive actions, preventive costs involve steps taken to remove the causes of potential nonconformities or defects. Preventive actions address future potential problems. Corrective actions address actual problems. Corrective costs are incurred when removing an existing nonconformity or defect. 1-4

19 Background and Analysis Method It is also useful to determine the relationship between the corrosion-related spending and availability (see Figure 1-1). Figure 1-1. The Relationship between Spending on Corrosion-Related Maintenance and Availability Spending on corrosion Point of minimum non-available days Number of non-available days Preventive cost curve Corrective cost curve Low Corrosion impact on availability Potentially high Figure 1-1 displays two relationships. The first is the relationship between preventive maintenance spending and corrective maintenance spending. This is typically an inverse relationship; the higher the amount of spending on preventive measures, the lower the corrective corrosion spending will be. The amount of preventive spending drives the resultant corrective actions. The second relationship is the amount of corrosion-related spending and its effect on availability. An extreme amount of spending on preventive measures that do not result in a reduction of corrective maintenance actions will have an overall negative impact on availability. This is similar to changing the oil in a car every month. The excessive amount of preventive maintenance has only a negligible effect on improving the reliability of the car s engine, but it reduces the car s availability while the maintenance is performed. Of course, spending too little on preventive measures will eventually result in greater corrective corrosion-related spending. This, too, can have a negative effect on availability. This is only a potential negative impact, because organizational units could increase their efficiency when dealing with unplanned corrective requirements, or they could take exceptional measures such as working an extensive amount of unplanned maintenance hours to minimize the availability impact of corrective corrosion actions. The point of minimum non-available days on the curve in Figure 1-1 represents a theoretically optimum preventive-to-corrective maintenance ratio. 1-5

20 It is also useful to examine the availability-related effects of not spending on corrosion. Figure 1-2 shows the effect on availability of not spending any maintenance funds for corrosion. This initial impact is minimal; however, over time, as corrosion starts to degrade all aircraft at the same time, the negative effect on availability accelerates. Figure 1-2. Availability over Time at Zero Corrosion-Related Spending Availability impact of corrosion L(X) Amount of non-available days due to corrosion L(0) T(0) Notes: L(0) = initial level of corrosion impact on availability; L(x) = level of corrosion impact on availability at time interval x; T0 = start time; T(x) = time interval x. Study Method Limitations The combined top-down and bottom-up approach, although a useful and comprehensive estimating technique, has its limitations. The most significant of these being a lack of detailed descriptions and encoding, gaps in available data, and lack of commercial depot records. Time T(X) LACK OF DETAILED TEXT DESCRIPTIONS AND CODING To find corrosion-related maintenance records, we searched both the manually entered corrective action descriptions and the malfunction and maintenance action codes within the data records. Although Army maintenance records contain a number of the data elements needed to conduct this analysis, they do not contain malfunction codes. In addition, some maintenance records have an insufficient amount of descriptive text, which makes determining the corrosion relationship for each data record more challenging, but not impossible. DATA GAPS Although we made every effort to accumulate as many of the bottom-up records as possible, gaps exist between the top-down reporting and bottom-up totals. Scaling the bottom-up totals to account for the top-down to bottom-up gaps assumes the 1-6

21 Background and Analysis Method gap is represented by the existing bottom-up data. In other words, the gap is assumed to be randomly distributed across the existing data. LACK OF COMMERCIAL DEPOT BOTTOM-UP RECORDS No commercial depot bottom-up records are available for Army aviation. Therefore, we applied the results from the organic depot analysis to the total reported non-availability attributed to DM (both commercial and organic). Because a portion of the reported non-availability is attributable to commercial DM; this is a possible shortcoming if commercial depots perform their maintenance in a wholly different method than the Army depot, or if the type of equipment the depot maintains is systemically different. ARMY AIRCRAFT ORGANIZATION Figure 1-3 shows the organizations (highlighted in yellow) that play a major role in the acquisition and sustainment of Army aviation and missile systems. Figure 1-3. Army Organizations with a Major Role in Acquisition and Sustainment of Aviation and Missile Systems U.S. Army Materiel Command Deputy Chief of Staff (G4) Assistant Secretary of the Army (Acquisition, Logistics and Technology) U.S. Army Communications and Electronics Command U.S. Army Tank, Armament, and Automotive Command U.S. Army Aviation and Missile Command U.S. Army Sustainment Command U.S. Army Research, Development, and Engineering Command U.S. Army Research Lab U.S. Army Aviation and Missile Research Development and Engineering Center U.S. Army Tank and Automotive Research Development and Engineering Center U.S. Army Communications and Electronics Research Development and Engineering Center U.S. Army Armament Research Development and Engineering Center U.S. Army Edgewood, Chemical and Biological Center U.S. Army Natick Soldier Systems Center PEO, Integration PEO, Ammunition PEO, Ground Combat Systems PEO, Combat Support and Combat Service Support PEO, Intelligence, Electronic Warfare Systems, and Sensors PEO, Command, Control, and Communications Tactical JPEO, Joint Tactical Radio System JPEO, Chemical and Biological Defense PEO, Soldier PEO, Enterprise Information Systems PEO, Aviation PEO, Missiles PEO, Tactical Missiles PEO, Simulation, Training, and Instrumentation Source: Dr. Roger Hamerlinck, Office of the Assistant Secretary for Acquisition, Logistics, and Technology Business Operations. Note: JPEO = joint program executive office; PEO = program executive office. 1-7

22 The U.S. Army Materiel Command (AMC) is the Army organization with the overall responsibility for sustaining fielded weapon systems, procuring replacement components for those systems, and maintaining readiness of all Army equipment. The U.S. Army Aviation and Missile Life-Cycle Management Command (AMCOM LCMC), a subordinate organization of the AMC, establishes maintenance policy regarding the sustainment of aviation platforms and associated systems (e.g., aviation life support equipment, ground support equipment, and weapon and target acquisition systems). 10 The Research, Development, and Engineering Command (RDECOM) specifically, its subordinate unit, the Aviation-Missile Research, Development, and Engineering Center (AMRDEC) provides aviation-related research, development, and engineering support. RDECOM is also a subordinate unit of AMC. The office of the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASA[ALT]) is responsible for developing, acquiring, and fielding new weapon and support systems. The ASA(ALT), which is also the Army Acquisition Executive (AAE), provides oversight of these acquisition programs via an organizational structure of program executive offices (PEOs) and associated program managers (PMs). The PEOs and PMs draw engineering and sustainment expertise from the Army Materiel Command as matrix support. The AMC includes research, development, and engineering centers (RDECs) and life-cycle management commands (LCMCs). Together, PEOs and PMs and the RDECs and LCMCs address the entire life cycle of aviation and missile equipment. Aviation Maintenance Structure The Army generally categorizes existing aviation maintenance as either sustainment 11 maintenance or FLM. Sustainment maintenance consists of maintenance functions formerly known as general support (GS) and depot operations of the Army maintenance system and Army-wide program for commodity-unique maintenance. 12 Figure 1-4 highlights the aviation depot at Corpus Christi (in gray shading). Sustainment is the more comprehensive and most complex repair work performed by civilian artisans at either a government-owned and -operated Army facility (an organic depot) or a commercial contractor facility. 10 The AMC organization chart, dated 4 January 2006, reflects the life-cycle management commands. 11 We use the maintenance terms sustainment and depot synonymously. We refer to the activities associated with this category of maintenance as DM. The primary aviation maintenance depot, located in Corpus Christi, Texas, is a subordinate organization to the AMCOM LCMC. 12 Definition provided by Dr. Roger Hamerlinck, Office of the Assistant Secretary for Acquisition, Logistics and Technology Business Operations. 1-8

23 Background and Analysis Method FLM consists of maintenance functions formerly known as operator or crew (as in equipment operators and vehicle crews), unit, and direct support. FLM involves the daily care and upkeep of aviation weapon systems as the Army uses them in an operational environment. This care includes on-platform, at-platform, and many off-platform component repairs. Operating units and in-theater intermediate organizations perform FLM. These capabilities can be quite extensive and include remove-and-replace operations for major components and subcomponents. Army FLM is performed at hundreds of different posts, camps, and stations throughout the world. Figure 1-4. Organizational Structure with DM Responsibility U.S. Army Materiel Command Deputy Chief of Staff (G4) Assistant Secretary of the Army (Acquisition, Logistics and Technology) U.S. Army Research, Development, and Engineering Command and subordinate units PEOs Army Maintenance Depots U.S. Army Communications and Electronics Command Tobyhanna (PA) Communications U.S. Army Tank, Armament, and Automotive Command Red River (TX) Bradley vehicles Anniston (AL) Wheeled and tracked vehicles U.S. Army Aviation and Missile Command Corpus Christi (TX) Aviation Letterkenny (PA) Tactical missiles U.S. Army Sustainment Command Source: Dr. Roger Hamerlinck, Office of the Assistant Secretary for Acquisition, Logistics and Technology Business Operations. Corrosion Organization The National Defense Authorization Act for 2009, Section 905, Corrosion Control and Prevention Executives (CCPEs) for the military departments, requires that each military department designate a CCPE. The legislation also lists specific responsibilities. In January 2009, the Army appointed the Deputy Assistant Secretary of the Army for Acquisition Policy and Logistics (DASA[AP&L]) 13 as corrosion executive. 13 Works within the Office of the ASA(ALT). 1-9

24 Figure 1-5 depicts the Army aviation and missile corrosion organization. 14 The Aviation and Missile Corrosion Program Office (CPO) is part of the AMCOM LCMC. The CPO hosts a working integrated product team (WIPT) of technical experts and stakeholders, who develop action plans to mitigate and prevent the effects of corrosion on aviation and missile equipment. Figure 1-5. AMCOM LCMC Corrosion Organization Army CCPE, DASA(AP&L) U.S. Army Materiel Command Deputy Chief of Staff (G4) AMCOM LCMC TACOM LCMC CECOM LCMC CPO WIPT AMCOM G-3 PEO Aviation PEO Missile and Space Integrated Materiel Management Center Acquisition Center AMRDEC Corpus Christi Army Depot Letterkenny Army Depot Note: TACOM = Tactical Army Command; CECOM = Communications Electronics Command. The CPO has the following three goals: Ensure the Army considers corrosion prevention and control as a key element of every aviation and missile acquisition. The CPO participates in and directly supports the mandated corrosion prevention action team for each new acquisition. Support overseas contingency operations by getting corrosion prevention and control technology into the hands of the warfighter. The program administrators actively participate in the efforts of the joint community to identify proven corrosion prevention and control technologies and provide these technologies to Army aviation and missile weapon systems through field application demonstrations. These technologies are low risk, in that they do not require development lead times. Seek to reduce the cost of ownership and maintenance while increasing safety for soldiers. The program addresses improved maintenance practices and procedures for aviation and missile weapon systems. 14 Organizational diagram from presentation at Army Corrosion Control Summit, Aviation and Missile Corrosion Prevention and Control, 10 February 2010, Robert Herron, p

25 Background and Analysis Method Aviation Weapon System List The scope of this study includes all Army aviation and missile end items and major subcomponents in the inventory during the period FY2009 through FY2012. Fifty-four types of aircraft and nine missile systems existed at the type, model, and series (TMS) level of detail, totaling more than 11,500 aircraft and missiles. There were more than 50,000 major aircraft and missile subcomponents. We compiled inventories for Army aviation equipment at the line-item-number (LIN) and national stock number (NSN) level of detail, using data extracted from the Army s Readiness Integrated Database (RIDB) contained in the Army Logistics Information Warehouse (LIW). The AMC Logistics Support Activity maintains the LIW and provides online access to Army wholesale and retail asset accountability databases. In Appendix A, we provide a complete listing of the Army aviation and missile major end items we accounted for in this study. DATA STRUCTURE AND ANALYSIS CAPABILITIES To accommodate the anticipated variety of decision makers and data users, we designed a corrosion impact data structure that maximizes analysis flexibility. Figure 1-6 illustrates this data structure and our different methods of analysis. Figure 1-6. Data Structure and Methods of Analysis Aviation Type C Age 10 years Corrosion costs or non-available hours Percent of total Work breakdown structure MissileType B Corrosion costs or Age Corrective 22 years non-available days non-available hours Percent of total Work breakdown structure Corrective Preventive non-available non-available days days Aviation Corrective Type non-available A days Corrosion costs or Corrective Age 5 years non-available days non-available hours Corrective Preventive days Preventive Depot non-available days DM costs ornon-available days days non-available Preventive non-available hours days Percent of total Work breakdown structure Preventive Depot Field non-available non-available days days FLM costs or days Depot non-available days non-available hours Depot non-available days Field Structure non-available days Corrective Depot non-available days days Field maintenance non-available costsdays or non-available Field non-available hoursdays Field Structure non-available Parts non-available days days days Preventive Structure maintenance non-available costs days or non-available Structure non-available hours days Structure Parts non-available days days Structure Parts maintenance non-available costs days or non-available Parts non-available hours days Parts non-available days Parts maintenance costs or non-available hours Will capture all types of aviation and missile systems 1-11

26 Using this data structure, we were able to analyze all available data against the following: Cost or availability Equipment type Age of equipment Corrective versus preventive nature of work DM or FLM Structure versus parts nature of work Work breakdown structure (WBS). 15 Any of these data structures can be combined with another to create a new analysis category. For example, we can isolate the corrective corrosion-related NMC hours for FLM on the airframe as compared to all avionics subsystems. REPORT ORGANIZATION In this chapter, we explained our analysis approach, the Army maintenance and corrosion organizations, the current maintenance structure, the aviation and missile assets included within the scope of this study and the data structure. In Chapter 2, we turn our attention to an assessment of the effect corrosion has on Army aviation weapon system costs (based on FY2012 maintenance data). In Chapter 3, we assess the effect corrosion has on Army aviation weapon system availability (based on FY2012 maintenance data). In Chapter 4, we provide our overall conclusions about the trends and patterns we identified in the data for corrosion-related cost and NAHs. The appendixes provide supporting data and analysis. 15 Work breakdown structure coding determines the aircraft subsystem on which the Army is performing work. Chapter 2 further details the Army aircraft WBS, or AWBS. 1-12

27 Chapter 2 Army Aviation and Missiles Corrosion Costs The estimated total annual cost of corrosion for Army aviation and missiles (based on FY2012 data) is $1.963 billion. In this chapter, we explain how we arrived at this estimate. For ease of discussion, we focused on FY2012 costs, as they were the most recent. Later in this chapter, we present our analysis of the cost data and any comparisons to the previous Army aviation and missiles costof-corrosion study results. We developed the cost tree in Figure 2-1 as a visual tool to illustrate the cost of corrosion for Army aviation and missiles. It serves as a guide for the remainder of this section. Figure 2-1. Army Sustainment Corrosion Cost Tree $100.8 billion DoD Maintenance $67.3 billion Non-Army maintenance $7.4 billion Total Army depot maintenance $26.1 billion Total Army field-level maintenance Total Army costs outside normal maintenance reporting Aviation and missiles only Laborrelated cost of corrosion Materialsrelated cost of corrosion Laborrelated cost of corrosion Materialsrelated cost of corrosion Labor of non-maintenance vehicle operators RDT&E and MILCON Purchase cards A B C D E F G Notes: MILCOM = military construction; RDT&E = research, development, testing and evaluation. At the top of the cost tree is the cost of reported maintenance throughout DoD for FY2012, $100.8 billion. 1 Eliminating non-army costs and segregating the cost tree into three major groups depot maintenance, field-level maintenance, and costs outside normal reporting results in the second level of the tree. At this point, the cost figures for DM and FLM represent all Army costs. Costs outside normal reporting (ONR) reflect only Army aviation and missile costs. 1 Analysis based on method described in LMI report, The Estimated Total Cost of DoD Materiel Maintenance, Report No. LG603T3, Earl R. Wingrove, III, et al., July

28 We split the three groups into the major cost categories of interest, and then label the categories as cost nodes. Cost nodes A through G depict the main segments of corrosion-related Army aviation and missile costs. Using separate cost trees for DM, FLM, and ONR, we determined the overall corrosion cost by combining the costs at each node. The documentation of data sources for each cost figure in each node is provided in Appendix B. As explained in Chapter 1 of the earlier Army aviation and missile study, 2 we used a combined top-down, bottom-up approach to determine the costs of corrosion. We started our more detailed cost-of-corrosion analysis with depot maintenance. ARMY AVIATION AND MISSILE DM COST OF CORROSION (NODES A AND B ) FY2012 depot maintenance corrosion costs were significant both at organic and commercial depot maintenance facilities. We identified a total of $771 million in depot-level aviation and missile corrosion cost. This was 29.3 percent of the Army aviation and missile DM costs of $2.627 billion. Depot Maintenance Corrosion Cost Tree The detailed depot corrosion cost tree in Figure 2-2 illustrates how we determined aviation and missile depot corrosion costs. Figure 2-2. Army Aviation and Missile Depot Maintenance Costs (in millions) $7,427 Depot maintenance $4,284 Organic depot $3,143 Commercial depot $1,594 Labor $217 Overhead $2,389 Materials $1,169 Labor $159 Overhead $1,753 Materials $474 Aviation/missile labor $1,120 Non-aviation/ missile labor $1,007 Aviation/missile materials $1,382 Non-aviation/ missile materials $344 Aviation/missile labor $825 Non-aviation/ missile labor $734 Aviation/missile materials $1,019 Non-aviation/ missile materials $376 Noncorrosion $98 Corrosion A1 $642 Noncorrosion $365 Corrosion B1 $246 Noncorrosion $98 Corrosion A2 $524 Noncorrosion $210 Corrosion Note: The aviation and missile portion of the organic and commercial depot overhead cost was $39 million and $29 million, respectively; none of which was corrosion-related. B2 2 LMI, The Annual Cost of Corrosion Army Aviation and Missile Equipment, Report SKT50T3, Eric F. Herzberg et al., June