Defense Inventory:

Plan to Improve Management of Shipped Inventory Should Be Strengthened

NSIAD-00-39: Published: Feb 22, 2000. Publicly Released: Feb 22, 2000.

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Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) plan for tracking inventory shipments, focusing on whether the plan: (1) responds to the provisions of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999; (2) contains the management elements needed for guiding effective implementation; and (3) adequately addresses other underlying weaknesses that led to ineffective control of inventory shipments.

GAO noted that: (1) DOD's plan is generally responsive to the statute and represents a necessary first step toward improving DOD's control over inventory shipments; (2) the plan includes 18 proposed actions to improve the tracking of inventory shipments; (3) as required by the statute, the plan also includes statements of objectives for the actions, performance measures, and schedules for implementation; (4) DOD intends to complete 14 of the proposed actions between fiscal year 2000 and 2006, while the remaining 4 proposed actions are ongoing, with no specific completion date provided; (5) the plan only briefly addresses the issue of resources necessary to implement the proposed actions, and it does not contain an estimate of the annual costs involved, as required by the statute; (6) the plan does not contain some key management elements needed to effectively implement the proposed actions; (7) the Government Performance and Results Act offers a model for developing an effective management framework to improve the likelihood of successfully implementing initiatives and assessing results; (8) although the statute did not require that DOD's plan conform to the Results Act, congressional reports and administrative guidance regarding the Results Act indicate that activities such as inventory management should be subject to these results-oriented principles; (9) DOD's plans does not fully reflect these principles; (10) in most cases, the actions, objectives, and performance measures in the plan are not specific enough to guide implementation; (11) the performance measures do not identify how DOD will assess progress using baseline data, benchmarks, or actual results compared to desired outcomes; (12) also, the plan does not assign accountability within DOD or the military services for implementing the individual initiatives; (13) the plan does not describe the operational processes, skills, technology, human capital, or other resources required to implement each of the specific actions; (14) without identifying the resources required, DOD is not in a position to determine the cost-effectiveness or feasibility of its proposed actions; and (15) the plan does not adequately address underlying weaknesses that have led to the lack of control over inventory shipments, such as: (a) not addressing the widespread problem of military supply activities that do not consistently follow existing DOD policies and procedures; (b) not showing how DOD will address the cultural resistance to change that has hampered its prior initiatives; and (c) not demonstrating a strong commitment to change.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include statements of objectives that are directly linked to each action.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include performance measures that contain quantifiable goals, methods for comparing actual results with desired outcomes, baseline data, interim measures, and clearly stated performance targets.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include implementation schedules that contain specific completion dates and interim milestones for monitoring long-range actions.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include accountability for overseeing and implementing each action.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include an identification of the resources necessary for implementing each action, together with an estimate of the annual costs.

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include actions to address the errors in the systems that the military services use to manage inventory shipments.

    Agency Affected: Department of Defense

  7. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include actions to address the problem of military supply activities failing to consistently follow existing DOD policies and procedures, including adequate training for supply personnel.

    Agency Affected: Department of Defense

  8. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO will continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include actions that address how DOD will successfully overcome its long-standing cultural resistance to change to ensure consistent implementation by the military services.

    Agency Affected: Department of Defense

  9. Status: Closed - Implemented

    Comments: In lieu of revising DOD's plan, the Under Secretary of Defense for Acquisition and technology directed the four military services, the Defense Logistics Agency, and the U.S. Transportation Command to prepare detailed implementation plans to provide greater detail on the proposed corrective actions and to address the recommendations in the report. As of June 30, 2000, all of these implementation plans were completed and submitted to the Office of the Secretary of Defense for review and approval. In accordance with the mandate in section 349 of the 1999 Strom Thurmond National Defense Authorization Act, GAO is currently revising these implementation plans and monitoring the implementation of the corrective actions (GAO assignment code 709484). GAO continue to monitor DOD's implementation of these plans over the next several years.

    Recommendation: To increase the likelihood that DOD's plan will enhance control over inventory shipments, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition and Technology to revise DOD's plan to include actions that more specifically address inventory shipment visibility weaknesses and the specific steps necessary for attaining DOD's goals.

    Agency Affected: Department of Defense

  10. Status: Closed - Not Implemented

    Comments: In its comments to this report and the follow-on report (GAO-01-30), the Department stated that it did not believe it was appropriate to send to the Congress the level of detail we had recommended. Therefore, the Department does not intend to implement this recommendation. GAO is continuing to monitor the Department's initiatives to correct in-transit visibility weaknesses and other related initiatives to reengineer the Department-wide logistics systems. This follow-on work will include an assessment of the extent to which the Department is keeping the Congress informed of its actions and initiatives to correct logistics weaknesses.

    Recommendation: The Secretary of Defense should submit DOD's detailed implementation plans, scheduled to be completed in April 2000, to Congress to facilitate appropriate congressional oversight.

    Agency Affected: Department of Defense

 

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