The Army Should Improve Its Requirements Determination System

PLRD-82-19: Published: Dec 1, 1981. Publicly Released: Dec 1, 1981.

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GAO reviewed the Army's requirements determination system to determine whether the requirements were based on valid data and needs. In view of the Administration's plan to increase Defense spending and the expectation that the services will receive full funding in fiscal year 1982, it is imperative that such funds be applied where they are most needed.

GAO found that the Missile Command's requirements computations for August 1980 were overstated by approximately $12.6 million for certain items and understated by about $400,000 for other items because requirements computations were based on inaccurate delivery, administrative, and production leadtimes. In addition, leadtime requirements were overstated because of the method used to determine requirements for first article testing. The Missile Command overstated its August 1980 requirements because of excessive delivery leadtimes and deviated from prescribed Army procedures for forecasting production leadtimes. Requirements for first article testing were overstated because unnecessary leadtime for items with a first article test requirement were included. The Missile Command used a standard procurement leadtime for one-third of its items in a buy position during August 1980. The standard leadtime was larger than what it would have been if the leadtimes had been based on actual experience. The Missile Command needs to improve its criteria for determining what a representative buy is, redefine its criteria for computing production leadtime, and ensure that its data are valid.

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 the Army should direct the Department of the Army Materiel Development and Readiness Command to rescind its policy of using standard leadtimes for all items and restrict the Command's temporary use to those instances where it can be shown that the historical data is atypical.

    Agency Affected: Department of Defense: Department of the Army

  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 the Army should direct the Department of the Army Materiel Development and Readiness Command to revise its method for computing leadtime associated with items having a first article test requirement to avoid a doubling of the requirements when in all probability the first article testing will be waived. The need for a uniform method among the services is addressed in the GAO overview report to the Secretary of Defense.

    Agency Affected: Department of Defense: Department of the Army

  3. Status: Closed - Not Implemented

    Comments: This recommendation will be updated as part of an on-going job which will addresse past recommendations in the requirements determination area.

    Recommendation: The Secretary of the Army should reemphasize to the Department of the Army Materiel Development and Readiness Command the necessity for maintaining an accurate database to reduce manual adjustments and to make the requirements determination process more reliable.

    Agency Affected: Department of Defense: Department of the Army

  4. Status: Closed - Not Implemented

    Comments: This recommendation will be updated as part of an on-going job which will address past recommendations on requirements determination.

    Recommendation: The Secretary of the Army should direct the Department of the Army Materiel Development and Readiness command to use the latest available production leadtime be it the last representative buy or the leadtime value in the signed but undelivered contract as a basis for forecasting leadtime.

    Agency Affected: Department of Defense: Department of the Army

  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 Army should direct the Department of the Army Materiel Development and Readiness Command to use actual historical delivery time in computing leadtime requirements or revise the 30-day standard to something more representative.

    Agency Affected: Department of Defense: Department of the Army

  6. Status: Closed - Not Implemented

    Comments: This recommendation will be updated as part of an on-going job which will addresse past recommendations in the requirements determination area.

    Recommendation: The Secretary of the Army should direct the Department of the Army Materiel Development and Readiness Command to develop definitive criteria as to what constitutes representative procurements. In addition to the exclusions already provided for, the criteria should recognize and consider variations in leadtimes, methods of procurement, and quantities procured.

    Agency Affected: Department of Defense: Department of the Army

 

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