Navy Supply:

Procurement Leadtime Forecasting Needs Improvement

NSIAD-90-78: Published: May 18, 1990. Publicly Released: May 18, 1990.

Additional Materials:

Contact:

Martin M. Ferber
(202) 275-6504
contact@gao.gov

 

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

Pursuant to a congressional request, GAO reviewed the Navy's process for determining procurement lead-time requirements.

GAO found that: (1) the Navy Aviation Supply Office (ASO) either overstated or understated lead-time requirements in over 35 percent of the cases GAO analyzed; (2) ASO did not always base lead-time requirements on actual experience; (3) ASO arbitrarily added 9 months to its lead-time standard because it had available funds; (4) ASO rejected as baseline data those actual lead times that widely diverged from data on file; (5) ASO did not routinely obtain or compare contractor lead-time estimates; (6) ASO overstated lead-time requirements for 17 items by $2.2 million and understated lead-time requirements for 4 items by $43,000; and (7) the records ASO used to determine lead-time requirements were inaccurate.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Data accuracy problems were targeted as an issue for review in fiscal year 1991 under FMFIA assessments. NAVSUP placed primary emphasis on the requirement to conduct a management control review for the functional area of data accuracy at both inventory control points. Results of this review were reported in the annual management control certification statement.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSUP, to implement procedures to ensure that more accurate production lead-time forecasting data are available and used in making requirements determinations. Specifically, the Commander should target data accuracy problems as an issue for review in Federal Managers' Financial Integrity Act (FMFIA) assessments.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: ASO has reviewed 6 months leadtime data and decided to keep the established parameters on an interim basis. DOD wants, over the long term, to standardize automatic data processing systems throughout the military services. The Navy's requirements determination system will be incorporated in the Air Force's Logistics Standard Information System.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSUP, to implement procedures to ensure that more accurate production lead-time forecasting data are available and used in making requirements determinations. Specifically, the Commander should improve the completeness and accuracy of production lead-time data in the historical files and establish the internal controls needed to ensure the accuracy of those files, including the reconciliation of shipment and receipt data in the contract status file.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Not Implemented

    Comments: DOD did not agree that contractor estimates should be routinely obtained. DOD stated that, although contractor estimates were valuable, they were just one of several sources of data used in validating production leadtime forecasts.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSUP, to implement procedures to ensure that more accurate production lead-time forecasting data are available and used in making requirement determinations. Specifically, the Commander should routinely obtain contractor estimates of production lead time and compare the estimates with actual contractor performance.

    Agency Affected: Department of Defense: Department of the Navy

  4. Status: Closed - Implemented

    Comments: ASO is implementing procedures to more accurately determine ALT requirements. Historical data is included in the maintenance of ALT files.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSUP, to implement procedures that more accurately determine ALT requirements. Specifically, the Commander should review historical data on administrative requirements for completeness and accuracy.

    Agency Affected: Department of Defense: Department of the Navy

  5. Status: Closed - Not Implemented

    Comments: The Department of Defense (DOD) agreed that additives to requirements should be reasonable and fully justified, but contends that appropriate safeguards are already in place.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSUP, to implement procedures that more accurately determine ALT requirements. Specifically, the Commander should ensure that additives to ALT requirements are reasonable and fully justified.

    Agency Affected: Department of Defense: Department of the Navy

  6. Status: Closed - Implemented

    Comments: ASO has implemented procedures to more accurately determine ALT requirements. ASO has established standard ceilings that are the maximum permitted ALT. When actual observed ALT is less than the standard, the actual ALT is used. When the actual ALT is greater than the standard, it is not used to update the file forecast.

    Recommendation: The Secretary of the Navy should direct the Commander, Naval Supply Systems Command (NAVSUP), to implement procedures that more accurately determine administrative lead-time (ALT) requirements. Specifically, the Commander should base ALT requirements on representative actual experience for individual items, rather than on standard lead times for groups of items.

    Agency Affected: Department of Defense: Department of the Navy

  7. Status: Closed - Not Implemented

    Comments: DOD believes that accurate lead-time forecasts are more economically obtained from the careful selection and periodic analytical review of lead-time filter parameter values rather than through the manual reviews and processing of individual update transactions.

    Recommendation: The Secretary of the Navy should direct the Commander, NAVSUP, to implement procedures to ensure that more accurate production lead-time forecasting data are available and used in making requirements determinations. Specifically, the Commander should review experienced lead times and contractor estimates that are outside of established parameters to determine if they are representative of current conditions.

    Agency Affected: Department of Defense: Department of the Navy

 

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