The Navy Should Improve Its Management of Defective Government-Furnished Materials

PLRD-82-115: Published: Sep 2, 1982. Publicly Released: Sep 2, 1982.

Additional Materials:

Contact:

John Landicho
(202) 275-6504
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO reviewed the Navy's practice of providing government-furnished material (GFM) to contractors for use in the construction, overhaul, and repair of its ships, airplanes, and missiles.

The Navy spends millions of dollars each year to repair or replace materials which are found to be defective after contractors receive them. However, neither GAO nor the Navy know how much is being spent to replace or repair defective GFM because the reporting systems which the Navy has established to identify these costs are not working. The Navy's failure to identify the magnitude of defective GFM and its associated costs for replacement or repair has precluded management from having the oversight needed to take effective action to correct the problems. The Navy has no central point of control or accountability over defective GFM. Instead, Navy management is fragmented among the various commands which develop their own reporting systems. Such systems are not monitored to ensure consistency and needed interface. All of the systems reviewed were experiencing problems with underreporting of defective GFM and the submission of inaccurate data in their quality deficiency reporting (QDR) system reports. The data developed, which indicated vendors who habitually provided defective items, were not being used effectively to encourage those vendors to correct the deficiencies or to avert additional purchasing from the vendors. In addition, the Navy was not taking action to make the vendors financially responsible for the poor quality of products provided as GFM.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Directions have been given to all procurement contracting officers in all system commands to use historical data to monitor performance and vendor analysis reports to identify problems. Contractor indoctrination seminars were held.

    Recommendation: The Secretary of the Navy should direct the systems commands and other applicable organizations to use the data developed by QDR systems to hold vendors accountable, either by having them take corrective action or by preventing future purchasing from them. Alternative sources should be developed if a sole-source vendor does not improve the quality of its products.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: Major system commands have established compatibility requirements for deficiency reporting.

    Recommendation: The Secretary of the Navy should direct the systems commands and other applicable organizations to ensure the consistency and compatibility of the various Navy QDR systems with each other and with other DOD components.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: NAVSEAINST 4855.7A, which standardizes reporting across NAVSEA, was issued.

    Recommendation: The Secretary of the Navy should direct the systems commands and other applicable organizations to develop a system for maintaining overall financial and logistical data that will provide the management visibility needed to identify the nature and magnitude of the problems with defective GFM.

    Agency Affected: Department of Defense: Department of the Navy

  4. Status: Closed - Implemented

    Comments: The Naval Material Command (NAVMAT) had responsibility for implementation action. Since NAVMAT disestablishment, the Naval Sea Systems Command (NAVSEA) has been given overall responsibility and has established a unified product deficiency reporting system.

    Recommendation: The Secretary of the Navy should direct the systems commands and other applicable organizations to bring the Navy's QDR systems into agreement with Department of Defense (DOD) Directive 4155.1 and Defense Acquisition Regulations.

    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 the Navy should establish a focal point within his office to oversee the accomplishment of these recommendations.

    Agency Affected: Department of Defense: Department of the Navy

 

Explore the full database of GAO's Open Recommendations »

Sep 22, 2016

Sep 21, 2016

Sep 19, 2016

Sep 12, 2016

Sep 8, 2016

Sep 7, 2016

Sep 6, 2016

Aug 25, 2016

Looking for more? Browse all our products here