Defense Inventory:

Growth in Ship and Submarine Parts

NSIAD-90-111: Published: Mar 6, 1990. Publicly Released: Mar 6, 1990.

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Pursuant to a congressional request, GAO reviewed the Navy's ship and submarine secondary item inventories, focusing on: (1) the reasons for unrequired inventory; (2) opportunities for minimizing the acquisition of unrequired stock; and (3) inactive inventory items.

GAO found that: (1) requirement and demand changes resulted in about $900 million of unrequired inventory; (2) the Navy's fleet modernization efforts, which included replacing and phasing out equipment and ships, resulted in about $1.7 billion of unrequired inventory; (3) the Navy could not explain why about $1.2 billion in inventory was unrequired; (4) the Navy does not systematically notify inventory control points that items are obsolete; (5) in 1988, the Navy eliminated only about 1,500 items under the Defense Inactive Item Program and 3,200 items under a special project; (6) 30,600 of the Navy's 183,000 inventory items met the Navy's criteria for elimination; and (7) the Navy spent approximately $24 million a year to store and manage questionable inventory items.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Navy planned to incorporate collection of summary data on major items as part of its automatic data processing (ADP) modernization. But, because of Office of the Secretary of Defense efforts to establish a uniform system for the services, the Navy's effort has been delayed. Enough time has lapsed that this recommendation will be reevaluated in connection with evaluations of DOD's CIM project.

    Recommendation: The Secretary of Defense should direct the Secretary of the Navy to require item managers to retain summary data on major items showing the basis for each item's most recent procurement and events affecting the item.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: Enough time has elapsed that this recommendation will be reevaluated in connection with evaluations of DOD's CIM project.

    Recommendation: The Secretary of Defense should direct the Secretary of the Navy to establish procedures to inform inventory control points about systems being phased out or replaced, require that inventory records be coded to identify the items, and ensure that purchases of such items are made only for immediate needs.

    Agency Affected: Department of Defense

  3. Status: Closed - Not Implemented

    Comments: This recommendation will be reevaluated in connection with GAO work looking at DOD's efforts to clean out warehouses (code 398142).

    Recommendation: The Secretary of Defense should expand the Defense Inactive Item Program criteria to allow classifying items as inactive so that more items with little potential for future use can be evaluated.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: This recommendation willl be reevaluated in connection with GAO work looking at DOD's efforts to clean out warehouses (code 398142).

    Recommendation: The Secretary of Defense should direct the Secretary of the Navy to begin systematically identifying and evaluating all inactive ship and submarine items, and to eliminate those with no potential for future use.

    Agency Affected: Department of Defense

 

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