Military Logistics:

Air Force's Management of Backordered Aircraft Items Needs Improvement

NSIAD-89-82: Published: Jun 2, 1989. Publicly Released: Jun 2, 1989.

Additional Materials:

Contact:

Nancy R. Kingsbury
(202) 512-4268
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed the Air Force's management of back-ordered aircraft items to determine the: (1) effectiveness of back-order reconciliation and validation procedures and practices; and (2) Air Force's promptness in cancelling back-orders on items which were no longer needed.

GAO found that: (1) 332 of the 850 back-orders it reviewed were invalid, even though the Air Force had periodically revalidated the back-orders; (2) the 332 invalid back-orders, valued at $5.9 million, involved orders for parts no longer needed to repair equipment, unauthorized materiel, wrong items, and duplicate items; (3) periodic validation practice weaknesses and retail supply computer deficiencies primarily caused the failure to detect or cancel the invalid back-orders; (4) the Air Force overstated its fiscal year 1989 aircraft item requirements by about $13.5 million, since it did not consider depot supply-level assets that could satisfy the requirements, included depot maintenance back-orders twice in annual procurement computations, and used erroneous back-order data; (5) although retail supply activities requested quarterly cancellations of invalid back-orders ranging in value from $665.7 million to about $1 billion from 1985 through 1987, Air Force Logistics Command (AFLC) air logistics centers cancelled only about 1 percent of those back-orders; (6) AFLC correction of problems in its automated program for compiling back-order validation information allowed the centers to cancel about 43 percent of invalid back-orders; and (7) the Air Force's indefinite suspension of its program for automatically cancelling back-orders when customers did not respond to quarterly back-order validation requests prevented possible savings of about $71.3 million from cancelling about 2,634 invalid back-orders.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Air Force does not agree that its system results in duplicative due-out-to maintenance requirements and does not intend to take any corrective action. GAO does not agree with DOD reasons for not taking corrective action, therefore, it intends to follow-up on DOD reasons for not taking action and to report this finding as part of the FY 1991 review of the Air Force aircraft spares budget.

    Recommendation: The Secretary of the Air Force should direct the Commander, AFLC, to eliminate the duplicate inclusion of due-out-to-maintenance back-orders from annual budget requirement computations for D041 system procurement appropriation-funded aircraft replenishment spares.

    Agency Affected: Department of Defense: Department of the Air Force

  2. Status: Closed - Not Implemented

    Comments: The Air Force does not agree that depot supply level assets should be applied to offset wholesale requirements. GAO does not agree with the Air Force's reasons for not taking corrective action, therefore, GAO intends to follow-up on the reasons for not taking corrective action and report this finding as part of the FY 1991 review of the Air Force aircraft spares budget.

    Recommendation: The Secretary of the Air Force should direct the Commander, AFLC, to revise the policy for D062 stock-funded aircraft item requirement computations to apply depot supply level assets to applicable requirements.

    Agency Affected: Department of Defense: Department of the Air Force

  3. Status: Closed - Implemented

    Comments: The Air Force has taken action to correct the computer problems inhibiting automatic cancellation of excess due-in quantities. HQ AFLC stated that even though there are currently no outstanding deficiency reports against the retail depot supply system, it will continue research to determine if any system problems are precluding timely backorder cancellations.

    Recommendation: The Secretary of the Air Force should improve the Air Force's management of back-orders by ensuring that base and depot supply computer problems inhibiting the automatic cancellations of excess due-in quantities on stock replenishment orders are satisfactorily resolved.

    Agency Affected: Department of Defense: Department of the Air Force

  4. Status: Closed - Implemented

    Comments: San Antonio ALC depot maintenance personnel were directed on November 30, 1988, to perform monthly backorder validations in compliance with Air Force regulations. This was followed by an AFLC Regulation 66-53, published to all commands, emphasizing the requirement.

    Recommendation: The Secretary of the Air Force should improve the Air Force's management of back-orders by directing that the San Antonio Air Logistics Center (ALC) depot maintenance activity perform monthly back-order validations in compliance with Air Force regulations.

    Agency Affected: Department of Defense: Department of the Air Force

  5. Status: Closed - Implemented

    Comments: This action was completed with the issuance of the June 2, 1989 change 3 to Air Force Regulation 67-23.

    Recommendation: The Secretary of the Air Force should improve the Air Force's management of back-orders by ensuring that base and depot supply personnel responsible for periodic back-order validation checks are adequately trained and fully understand the importance of this task.

    Agency Affected: Department of Defense: Department of the Air Force

  6. Status: Closed - Implemented

    Comments: DOD concurred with these recommendations and cited Air Force revisions to its policy directives, regulations, and instructions, which should bring about the needed improvement for the periodic detection and cancellation of invalid orders. Written certification is now required, monthly validation of depot orders has been accomplished, and publication of validation check requirements was completed.

    Recommendation: The Secretary of the Air Force should improve the Air Force's management of back-orders by: (1) strengthening existing procedures for monthly back-order validations at the base and depot supply levels by requiring that the accuracy of validated back-order listings be certified in writing by appropriate base and depot supply officials and subjected to independent accuracy checks; (2) requiring that transmittal letters accompanying the monthly listings of back-orders to be validated include detailed validation guidance; and (3) stipulating that the accuracy of the validation responses will be certified by the appropriate base or depot supply officials and will be subjected to independent accuracy checks.

    Agency Affected: Department of Defense: Department of the Air Force

  7. Status: Closed - Implemented

    Comments: AFLC issued a letter to all air logistics centers on December 15, 1988 reemphasizing the necessity of backorder validation and then published a regulation (No. 66-53) on February 28, 1989, emphasizing the requirement.

    Recommendation: The Secretary of the Air Force should direct the Commander, AFLC, to reemphasize to the air logistics centers the need for eliminating back-order data errors from requirements computations for D062 stock-funded items during the budget review process.

    Agency Affected: Department of Defense: Department of the Air Force

 

Explore the full database of GAO's Open Recommendations »

Sep 22, 2016

Sep 21, 2016

Sep 19, 2016

Sep 12, 2016

Sep 8, 2016

Sep 7, 2016

Sep 6, 2016

Aug 25, 2016

Looking for more? Browse all our products here