Defense Logistics Agency:

Why Retention of Unneeded Supplies Persists

NSIAD-93-29: Published: Nov 4, 1992. Publicly Released: Nov 4, 1992.

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Pursuant to a congressional request, GAO provided information on the Defense Logistics Agency's (DLA) inventory of inactive items, focusing on: (1) the size of the inactive inventory; and (2) why items with no demand are retained.

GAO found that: (1) in fiscal year 1991, DLA managed 497,572 different items valued at $980 million which had no demand for at least 3 years; (2) the value of the DLA 1.8-million item inventory totalled $11.7 billion; (3) many item managers were not familiar with inactive items and could only provide information when an inquiry was made on a particular item; (4) many items in the inventory data files had incorrect data and classification priority codes which resulted in incorrect management decisions; (5) there were no internal controls to ensure that items managers reviewed items referred to them; (6) DLA lacked directives or policy manuals for its two inventory management programs and the military services often failed to provide DLA with prompt technical support; (7) DLA lacked methods to track on-hand, locally purchased items which are returned to warehouses, and DLA failed to maintain specific transaction histories of locally purchased items; and (8) DLA did not have a method to refer potentially inactive items to civil agencies.

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