Improved Management of Fleet Supplies and Spare Parts Can Save Millions Without Affecting Readiness

PLRD-81-59: Published: Sep 11, 1981. Publicly Released: Sep 11, 1981.

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GAO reviewed the Navy's supply support to assess actions taken by the Navy in response to earlier GAO reports on shipboard supply management and to evaluate the effectiveness of supply support provided by the Navy's automated surface ships.

GAO found that the Navy has acted on some of the earlier recommendations and has achieved savings of at least $89 million. However, the Navy has taken little or no action on other recommendations. Additional opportunities are available for the Navy to save as much as $94 million over a 5-year period on the procurement of repair parts and supplies by adopting more stringent criteria for submarines and tenders and by the use of automated surface ships. These savings can be accomplished by improving: (1) shipboard management policies and controls to ensure that excess inventories are not retained aboard the ship after supply overhauls and that the Navy adopts a stockage criterion which is standard and will produce the best results in terms of trade-offs among investment, timely filling of requisitions, and stock excessing actions; (2) visibility over shipboard supply by insisting that authorized allowances be adhered to; (3) the process for identifying, redistributing, and offloading excess materials on a timely basis; and (4) the accuracy rate of physical inventories.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to have its fleet commanders monitor excesses and ensure that they are offloaded and redistributed or made available to the supply system in a timely manner.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to have its fleet commanders ensure that inventory accuracy rates are improved to the acceptable level of 90 percent.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Not Implemented

    Comments: The Navy conducted a study of feasibility for implementing the recommendation and concluded that it was not feasible. The time required to evaluate the Navy study would not be worth the cost. Therefore, there is no benefit from further followup.

    Recommendation: The Secretary of Defense should direct the Navy to require its submarines and submarine tenders to adopt a more stringent demand frequency criterion to add and retain items for demand-based stock levels; namely, two recurring demands in separate months over a 6-month period to establish, and two recurring demands in separate months every 12 months thereafter to retain.

    Agency Affected: Department of Defense: Department of the Navy

  4. Status: Closed - Not Implemented

    Comments: The Navy did not agree with the recommendation, stating that tender load lists represent a 90-day endurance load and are built to provide 90 days of support without replenishment in a wartime scenario. Therefore, the material should not be used as peacetime stocks. Although GAO rebutted the Navy position, the Navy did not agree with the GAO position. There is no benefit from any further followup.

    Recommendation: The Secretary of Defense should direct the Navy to change its policy so that submarine tenders will limit demand-based increases in stock levels to quantities needed to sustain current operations after considering initial allowance stocks in excess of the 90-day requirement when reevaluated based on current demand experience.

    Agency Affected: Department of Defense: Department of the Navy

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to direct submarine tenders to periodically identify all excess on-order stocks and promptly initiate cancellation action.

    Agency Affected: Department of Defense: Department of the Navy

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to direct the Pacific Fleet to more vigorously emphasize the offloading of unauthorized material and more closely observe current standards.

    Agency Affected: Department of Defense: Department of the Navy

  7. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to exercise controls aboard carriers to prevent requisitioning of materials and supplies that will put the ships in an excess condition.

    Agency Affected: Department of Defense: Department of the Navy

  8. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to direct carriers to perform sufficient reorder reviews to permit timely identification and cancellation of those items that are in excess of the ships' needs.

    Agency Affected: Department of Defense: Department of the Navy

  9. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to have its fleet commanders discontinue the use of goals for determining excesses on hand and on order and direct that any item that exceeds the authorized allowance is in excess, whether it is on hand or on order.

    Agency Affected: Department of Defense: Department of the Navy

  10. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should direct the Navy to direct carriers to exercise controls to prevent ordering Closed Loop Aeronautical Management Program (CLAMP) items that are excess to allowances and to promptly turn in all excess CLAMP items.

    Agency Affected: Department of Defense: Department of the Navy

 

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