Air Force Logistics:

Improved Backorder Validation Procedures Will Save Millions

NSIAD-94-103: Published: Apr 20, 1994. Publicly Released: Apr 20, 1994.

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As a followup to a previous review, GAO determined whether the Air Force made recommended improvements in cancelling and reconciling invalid backorders for spare parts and other supplies.

GAO found that: (1) from a sample it reviewed, the Air Force cancelled $209.3 million in invalid backorders; (2) the Air Force should have detected $138.6 million of the invalid backorders during its quarterly reconciliation checks; (3) the Air Force has not provided retail supply activities with detailed guidance for validating backorders; (4) the Air Force is not providing sufficient management attention to the quarterly reconciliation process to correct differences between records at wholesale-level supply activities and retail-level activities; and (5) the Air Force suspended an automatic backorder cancellation provision that required wholesale activities to cancel unreconciled backorders.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Air Force performed additional analysis of the backorder validation process and identified problems. The Air Force has made recommendations for improving the process and will do further study to determine the causes of the problems.

    Recommendation: To improve the backorder validation and reconciliation program, the Secretary of the Air Force should establish and provide retail supply activities with additional detailed step-by-step procedures for validating backorders.

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

  2. Status: Closed - Implemented

    Comments: An Air Force Materiel Command mission support work group has been formed and will be responsible for continuing monitoring and oversight of the backorder validation program. Meetings in March 1995 resulted in changes to the validation process.

    Recommendation: To improve the backorder validation and reconciliation program, the Secretary of the Air Force should provide improved management oversight and increased emphasis to resolving problems revealed by quarterly backorder reconciliation reports. For example, determine the reasons for substantial fluctuations in cancellation rates.

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

  3. Status: Closed - Implemented

    Comments: A MILSTRAP change letter dated January 25, 1995, allowed for the appropriate cancellation and reinstatement of backorders on an interim basis. The Joint Logistics Supply Center has approved policies and procedures that provide for reinstatement of erroneously cancelled requisitions. The Center has funded this change, but an implementation contract has not yet been executed.

    Recommendation: To improve the backorder validation and reconciliation program, the Secretary of the Air Force should reinstate those provisions of the quarterly backorder reconciliation program that provide for: (1) automatic cancellation of backorders when retail supply activities do not respond to wholesale level reconciliation requests; and (2) monitoring and reporting retail level nonresponses to quarterly reconciliation requests.

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

 

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