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Army Inventory: Changes to Stock Funding Reparables Would Save Operations and Maintenance Funds

NSIAD-94-131 Published: May 31, 1994. Publicly Released: May 31, 1994.
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Highlights

Pursuant to a congressional request, GAO reviewed the Army's implementation of the stock funding of the depot level reparables (SFDLR) requirement, focusing on whether SFDLR has: (1) reduced demands on and procurements by the wholesale level supply system; and (2) affected the management of maintenance and inventory activities and the use of operation and maintenance (O&M) funds at the unit level.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Army The Secretary of the Army should revise the credit rate for items turned in by units so that the amount of credit received by the units is linked to the amount of credit given by the wholesale system.
Closed – Implemented
The retail credit rates were reduced from 54 percent in FY 1993 to 52 percent in FY 1994 to 47 percent in FY 1995, to bring them into relative balance with what the units are receiving from the retail stock fund.
Department of the Army The Secretary of the Army should expand the number of long supply items being offered at a reduced price--not just those items for the older systems that do not have a projected procurement--to encourage the units to buy the items rather than repair them at the local level. The reduced price to the units should be less than the repair cost at the local level. Otherwise, the units will continue to repair the items locally.
Closed – Implemented
The number of reduced price initiative items has been expanded and it is expected that an additional 200 items will be added to the list.

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Topics

Army procurementArmy suppliesFederal supply systemsIndustrial fundsInventory control systemsMilitary cost controlMilitary inventoriesMilitary materielProperty and supply managementSpare parts