Army Inventory:

Unfilled War Reserve Requirements Could Be Met With Items From Other Inventory

NSIAD-94-207: Published: Aug 25, 1994. Publicly Released: Aug 25, 1994.

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Pursuant to a congressional request, GAO reviewed whether Army inventory items could be used to meet unfilled war reserve requirements.

GAO found that: (1) after the Department of Defense (DOD) Comptroller lifted the restriction on the use of inventory items not purchased with war reserve appropriations, the Army estimated that it could reduce its unmet war requirements by $186.6 million; (2) the Army could meet $497 million in unfilled war reserve requirements by using items not needed for operating purposes; (3) the Army could meet additional requirements if it establishes a repair program for inventory items in unserviceable condition, but in the face of defense downsizing, this may not be a prudent use of resources; (4) although the Army's $186.6-million estimate was understated, the Army could not reconstruct its methodology for its estimate because of computer programming errors; and (5) the Army believes that DOD has to change its $2.9-billion ceiling on protected war reserve inventory before it can transfer the additional inventory to the war reserve.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: In view of the response to the first recommendation, this recommendation becomes a moot point.

    Matter: Because there is clearly a hesitancy on the part of DOD to proceed in reclassifying any of the peacetime inventory in the absence of a clearer statement of approval by Congress, Congress may wish to eliminate the section of Public Law 103-139 that concerns DOD or provide other clarifying guidance on this matter.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Army has reduced its war reserve requirements from $2.3 billion to $777 million and expects to further reduce the requirements. In view of these actions, it is highly unlikely that there will be a need to revamp the policy on the use inventory to fill war reserve requirements.

    Recommendation: The Secretary of Defense should direct the DOD Comptroller to reevaluate the policy that limits the amount of protected war reserve inventory that the Army can maintain. Otherwise, inventory not needed for peacetime operations could not be transferred to the war reserve category. However, as previously pointed out, before the Army is allowed to transfer the unneeded inventory to war reserves, it needs to ensure that the computed war reserve requirements represent valid requirements and that future funding requests reflect the reduced need for war reserve appropriations.

    Agency Affected: Department of Defense

 

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