Air Force Requirements:

Cost of Buying Aircraft Consumable Items Can Be Reduced by Millions

NSIAD-93-38: Published: Nov 18, 1992. Publicly Released: Nov 18, 1992.

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Pursuant to a congressional request, GAO reviewed the Air Force's system for computing requirements for aircraft consumable items, focusing on: (1) actions that the Air Force took to implement previous GAO recommendations to change its requirements computation system; and (2) the potential procurement savings that the Air Force could achieve by making those changes.

GAO found that: (1) the Air Force continues to include recurring demand backorders in both the lead-time demand and backorder portions of the requirements computation, which has increased requirements by $383 million and related fiscal year (FY) 1993 Air Force procurements by about $153 million; (2) the Department of Defense (DOD) and Air Force believe that it is necessary to include recurring demand backorders twice in the requirements computation to compensate for previous wholesale stock shortages and to avoid future outages; (3) the Air Force has overstated its FY 1993 procurement requirements for consumable items by $50 million by excluding from requirements computations on-hand assets reserved to satisfy depot maintenance requirements; and (4) DOD and the Air Force believe that assets held in reserve for depot maintenance support are not available to offset worldwide wholesale requirements. GAO believes that the Air Force could still make the recommended changes to its requirements computation system, since the: (1) consumable item requirements computation system has self-correcting features to compensate for past shortages and to prevent recurrences; and (2) worldwide wholesale requirements include forecasted depot maintenance requirements.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Based on GAO's information, Congress reduced the Air Force's fiscal year 1993 O&M appropriation funding request by $200 million. GAO has included this amount in an accomplishment report which GAO has sent to management for approval and signature.

    Matter: Congress may want to consider: (1) reductions to future Air Force funding requests to reflect the procurement savings that the Air Force could achieve by acting on prior GAO recommendations to eliminate the double counting of backordered requirements; and (2) on-hand depot maintenance assets in buy computations.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOD seems unlikely to implement the recommendations, since it has not changed its position, even after sustaining a $200-million cut in the Air Force's FY 1993 O&M funding request. Therefore, GAO does not plan a followup on this report.

    Recommendation: The Secretaries of Defense and the Air Force should reconsider their positions on the prior GAO recommendations and direct that the necessary changes be made to the Air Force's requirements computation policy and automated systems for aircraft consumable items to ensure that recurring demand backorders are not included twice in requirement computations.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: DOD seems unlikely to implement the recommendations, since it has not changed its position, even after sustaining a $200-million cut in the Air Force's FY 1993 O&M funding request. Therefore, GAO does not plan a followup on this report.

    Recommendation: The Secretaries of Defense and the Air Force should reconsider their positions on the prior GAO recommendations and direct that the necessary changes be made to the Air Force's requirements computation policy and automated systems for aircraft consumable items to ensure that recurring demand backorders are not included twice in requirement computations.

    Agency Affected: Department of Defense: Department of the Air Force

  3. Status: Closed - Not Implemented

    Comments: DOD seems unlikely to implement the GAO recommendations, since it has not changed its position, even after sustaining a $200-million cut in the Air Force's FY 1993 O&M funding request. Therefore, GAO does not plan a followup on this report.

    Recommendation: The Secretaries of Defense and the Air Force should reconsider their positions on the prior GAO recommendations and direct that the necessary changes be made to the Air Force's requirements computation policy and automated systems for aircraft consumable items to ensure that on-hand assets reserved to satisfy depot maintenance requirements are considered in requirement computations.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: DOD seems unlikely to implement the recommendations, since it has not changed its position, even after sustaining a $200-million cut in the Air Force's FY 1993 O&M funding request. Therefore, GAO does not plan a followup on this report.

    Recommendation: The Secretaries of Defense and the Air Force should reconsider their positions on the prior GAO recommendations and direct that the necessary changes be made to the Air Force's requirements computation policy and automated systems for aircraft consumable items to ensure that on-hand assets reserved to satisfy depot maintenance requirements are considered in requirement computations.

    Agency Affected: Department of Defense: Department of the Air Force

 

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