Navy Can Improve Management of Nonaviation Depot-Level Repairable Spares

NSIAD-84-150: Published: Sep 20, 1984. Publicly Released: Sep 20, 1984.

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GAO reviewed the Navy's management of nonaviation depot-level repairable spares.

GAO found that the Navy manages about 82,000 spares, such as generators, transmitters, and circuit card assemblies, valued at about $5.6 billion. GAO also found that the Navy is repairing many spares that would be more economical to replace through procurement actions. A major cause of this condition is that the repair or buy decisions are based on adjusted data that favor repairing rather than on actual cost information. GAO believes that industrially-funded using activities, such as shipyards, lack sufficient incentive to return unserviceable spares because they can pass the added cost of not returning spares on to their customers in the form of higher charges.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Based on an economy of repair analysis made of the 29 items in question, 13 items were recommended for management as consumables. About $67,200 in Navy stock fund annual savings were projected for the 13 items. If considered as representative, the Navy estimates that projected savings would be $2,562,000.

    Recommendation: The Secretary of the Navy should use up-to-date actual purchase and repair cost information in making repair or buy decisions.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: SPCC and ASO were tasked to ensure that procedures were established and reviews conducted in accordance with guidance in NAVSUPINST 4400.89, Navy Repairables Manual.

    Recommendation: The Secretary of the Navy should periodically review depot-level repairable spares to determine which should continue to be repaired or whether new spares should be purchased as replacements.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: SPCC was tasked to develop activity carcass tracking performance reports and to forward quarterly statistics. Training requirements and procedural changes are in process.

    Recommendation: The Secretary of the Navy should explore alternatives that encourage industrially funded activities to return more unserviceable spares, test the feasibility of implementing these alternatives, and adopt the one that provides the most incentive to return the unserviceable spares.

    Agency Affected: Department of Defense: Department of the Navy

 

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