Defense Inventory:

Defense Logistics Agency Customers Order Supplies Uneconomically

NSIAD-91-39: Published: Feb 14, 1991. Publicly Released: Apr 25, 1991.

Additional Materials:

Contact:

Donna M. Heivilin
(202) 512-8430
contact@gao.gov

 

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

Pursuant to a congressional request, GAO reviewed how the military services requisitioned supplies from the Defense Logistics Agency (DLA), to determine whether DLA customers appropriately used: (1) economical methods to order supplies; and (2) supply requisition priorities.

GAO found that: (1) customers routinely placed numerous low-value requisitions that cost DLA more to fill than the value of the supplies provided; (2) in fiscal year 1989, DLA spent $62.9 million more than the $22.6 million it charged its customers to fill 5.7 million low-value requisitions; (3) on about 755,000 occasions, customers submitted more than one requisition for the same supply item on the same day; (4) DLA customers failed to meet the Department of Defense (DOD) requisition submission time standard on about 61 percent of their high-priority requisitions; and (5) the Army's Total Package Fielding Program, which mandated that units request high-priority service on repair parts requisitions, regardless of actual urgency, was inconsistent with DOD supply policy which required a case-by-case determination of priority.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Office of the Secretary of Defense (OSD) required the military departments to: (1) issue policy to their activities directing that order consolidation take place whenever cost-effective; and (2) review long-range ordering programs and incorporate requisition consolidation into programming efforts.

    Recommendation: To provide the military services and other supply system customers with incentives to use more economical ordering methods and high-priority services only when necessary, the Secretary of Defense should direct the Director, DLA, to determine the cost of filling a requisition and levy a minimum charge per requisition when the percentage surcharge based on the value of the item is not sufficient to recover this cost.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: OSD issued new procedures that require the requisitioning activity to indicate on the requisition whether premium transportation is required. Failure to do so will result in automatic downgrading.

    Recommendation: To provide the military services and other supply system customers with incentives to use more economical ordering methods and high-priority services only when necessary, the Secretary of Defense should direct the Director, DLA, to determine the additional cost for processing high-priority requisitions and charge customers for this service.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: DOD directed the Army to separate its materiel allocation priorities from its transportation priorities when it submits requisitions.

    Recommendation: The Secretary of Defense should direct the Secretary of the Army to discontinue the policy of assigning a predetermined high priority to all requisitions submitted under the Total Package Fielding Program.

    Agency Affected: Department of Defense

 

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