Army Depots:

Plans Abandoned for the New Distribution Center at the Red River Depot

NSIAD-90-184: Published: Aug 20, 1990. Publicly Released: Aug 20, 1990.

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Pursuant to a congressional request, GAO reviewed the Army's efforts to build highly mechanized distribution centers at three depots, focusing on: (1) the present work load at one depot compared to the Army's early projections; (2) the actual cost of that center; (3) the status of work at the three depots; and (4) the Army's rationale for completing one center, given the potential excess capacity at the other two centers.

GAO found that: (1) the projected work-load increases the Army used to justify constructing the new distribution centers did not materialize; (2) although the Army estimated that the total work load would increase by 26 percent to 53 percent over a 4-year period, it had remained at the 1985 level; (3) the actual work load at each depot was lower than the Army projected; (4) Army officials did not formally analyze the reasons for the discrepancy between projected and actual work loads, but partially attributed the discrepancy to budget cuts and more modern systems; (5) from 1985 through 1989, the number of stocked items at the three depots steadily increased, and most items were largely inactive; (6) depot productivity continued to increase despite a decline in work hours; (7) the estimated cost of three distribution centers has increased 35 percent since 1984, from about $488 million to about $658 million; (8) the Army terminated a construction contract for one center, since the other two centers had the capacity to handle the work load; and (9) the Army completed construction at two depots and one was partially operational, but the software needed to achieve full automation at two centers was in the testing stage.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress declined to rescind unused funds, but did direct the Department of Defense (DOD) not to use or transfer any of the money for any purpose other than termination costs for the Red River Center. This action precludes DOD from using the funds which was the intent of the recommendation.

    Matter: Because only about $8.7 million of the $90 million in military construction and procurement funds allocated for the now cancelled Red River center have been expended, and up to $18.6 million may be needed to terminate existing commitments, Congress may wish to consider rescinding the remaining $62.7 million, $42 million in military construction funds and $20.7 million in procurement funds.

 

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