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United States General Accounting Office:

Washington, DC 20548:

May 21, 2003:

The Honorable C.W. Bill Young
Committee on Appropriations
House of Representatives:

The Honorable Jerry Lewis
Subcommittee on Defense
Committee on Appropriations
House of Representatives:

Subject: Defense Inventory: Air Force Item Manager Views of Repair 
Parts Issues Consistent With Issues Reported in the Past:

Since 1990 we have consistently identified the Department of Defense's 
(DOD) management of secondary inventory (spare and repair parts, 
medical supplies, and other items to support the operating forces) as a 
high-risk area because inventory levels were too high and management 
systems and procedures were ineffective. In addition, DOD has 
attributed readiness problems to parts shortages. Previously, we 
reported on the wide variety of reasons for inventory of spare parts 
being above or below the levels needed to satisfy current inventory 
requirements.[Footnote 1] This is one in a series of reports addressing 
defense inventory vulnerabilities to fraud, waste, and abuse. You asked 
that we specifically obtain the views about defense inventory 
imbalances from item managers, i.e., those who are responsible for 
maintaining the right amount of inventory.[Footnote 2] This report 
responds to your request, and other work is being done for you under 
separate reports that address related issues. Our objective was to 
obtain from Air Force item managers their views on the reasons for and 
operational impacts of having repaired parts either above or below the 
levels needed to satisfy current inventory requirements, and compare 
them with the reasons and impacts found in our previous reports.

We chose the Air Force for this review because of the large dollar 
value of repair parts in that service. To respond to your request, we 
conducted a survey of item managers overseeing 150 sample items--75 
items we found to be below requirements (shortage) and 75 items we 
found to be above requirements (excess)--at the Air Force's three air 
logistics centers (ALC) in Ogden, Utah; Oklahoma City, Oklahoma; and 
Warner Robins, Georgia. We then compared our results with those in our 
previous reports to determine whether there were any consistencies 
between the results regarding the reasons for imbalances and their 
operational impacts. The scope and methodology for our review is 
discussed at the end of this report.


We found that the reasons and operational impacts item managers cited 
for our sample items being either above or below the levels needed to 
satisfy current inventory requirements were similar to the reasons and 
impacts cited in our prior reports. For shortages, item managers often 
cited the lack of component parts and repair shop capacity/process 
problems. In our 1999 report, we discuss the Air Force's effectiveness 
in providing inventory items to its customers, and identified component 
parts shortages as the most frequent cause of aircraft repair work not 
being done on time.[Footnote 3] For causes of excess items, the 
managers often cited a buildup of inventory to support a new program, 
or for an aircraft retrofit, modification, upgrade, or replacement. In 
1997, we reported that a similar reason for inventory items being in 
excess--purchases made to support a system before it was activated--was 
common.[Footnote 4] The operational impacts cited by item managers were 
also similar to those given in our past work. As in the past, shortages 
were often cited as a contributing factor to reduced mission capability 
of aircraft or delays in planned maintenance. In addition, excesses 
were often cited as contributing to the consumption of warehouse space 
and related storage costs.


Maintenance and repair services for military aircraft are provided by 
the Air Force's three ALCs in Ogden, Utah; Oklahoma City, Oklahoma; and 
Warner Robins, Georgia. These centers manage the supply of certain 
repair parts as well as provide the primary source of repair for broken 
items that can be repaired and returned to service. As supply managers, 
the three ALCs manage almost 25,000 different reparable items. Repairs 
are performed either by the center managing the item, by or with 
another center, by a contractor, or by another military service. From 
those 25,000 reparable items, we identified nearly 9,500 items where 
the same center was both the supply manager and the primary source of 
repair for an item, and formed the basis for our sample items mentioned 

Reasons for and Impacts of Spare Parts Imbalances Cited by Item 
Managers Similar to Previously Reported Problems:

Item managers responding to our survey provided multiple reasons and 
operational impacts for our sample items being either above or below 
the levels needed to satisfy current inventory requirements that were 
similar to the reasons and impacts cited in our prior reports. Item 
managers' reasons for spare parts shortages were similar to past 
problems, and in roughly the same order of magnitude as previously 
reported. The reasons for spare parts excesses, and the operational 
impacts of spare parts imbalances, were also similar to those 
identified in our previous reports.

Item Managers' Reasons for Spare Parts Shortages Reflect Similar 
Problems of the Past:

Item managers provided similar reasons for shortages among our sample 
items in about the same order of magnitude as we have previously 
reported. Table 1 lists categories of the most frequently cited reasons 
provided by item managers for inventory shortages among our sample 
items. Many of the reasons shown in the table may be caused by 
unanticipated demands for parts, which is one of the primary reasons 
for parts shortages cited in our 2001 report on the reasons for and 
impacts of spare parts shortages on three selected Air Force 
systems.[Footnote 5]

Table 1: Item Manager Reasons for Reparable Parts Shortages:

Reason: Lack of component parts to complete the repairs; Number of 
responses[A]: 42.

Reason: Repair shop process and/or capacity problems; Number of 
responses[A]: 41.

Reason: Higher than expected condemnation rates of the part; Number of 
responses[A]: 9.

Reason: Broken items in the field not turned in to depot for repairs; 
Number of responses[A]: 7.

Reason: Rarely used item; Number of responses[A]: 4.

Reason: Funding constraints; Number of responses[A]: 4.

Source: GAO survey of Air Force item managers.

[A] The response total exceeds the 75 shortage sample item total due to 
multiple reasons received from item managers.

[End of table]

Lack of Component Parts:

Air Force item managers, along with our prior work, indicate that the 
most frequent reason for repair parts shortages is the lack of 
component parts. These are the individual parts used to fix other spare 
parts. For example, item managers cited a shortage of rotors and 
backing plates needed to fix the brakes for the KC-135 and C-130 
aircraft. Similarly, in our 1999 report discussing the Air Force's 
effectiveness in providing inventory items to its customers, we found 
that component parts shortages were the major cause of aircraft repair 
work not being done on time.[Footnote 6] We noted in that report that 
there was a lack of several component parts, sometimes for more than a 
year, for two radio band transmitters used in the B-1B aircraft. Also, 
our 2001 report indicated that unanticipated demands for a machine bolt 
on an aircraft engine caused a lack of component parts.

Repair Shop Process and/or Capacity Problems:

Parts shortages due to various shop process and/or shop capacity 
problems were noted by both the item managers in our current review as 
well as being an issue in prior reports. Shop process problems include 
broken machines, a lack of personnel or experienced personnel, or the 
process repaired the part the wrong way. For example, an inoperable 
machine held up the repair of a high-pressure turbine rotor used in 
aircraft engines. In another example, the existing repair process 
presented safety issues and a new process was being developed to 
replace it. Shop capacity problems are generally related to space 
constraints--such as for the lack of space needed to repair an F-15 
aircraft wing assembly--or for competing demands for the same equipment 
or space. Furthermore, item managers indicated that 13 of our selected 
75 sample items had both shop process and shop capacity problems. For 
example, the repair of an F-15 countermeasure receiver was delayed due 
to a lack of testing equipment (shop capacity) as well as a lengthy 
repair process that was being reviewed to cut down on the repair time 
(shop process). Similar issues, such as the lack of testing equipment 
and limited repair facility capacity, were reported in our 2001 report.

As mentioned above, the most frequently cited reason for repair parts 
shortages in the 2001 report was unanticipated demands, such as the 
sudden demand for a part after no demands for 7 years. Two of the 
sample items that item managers identified from our current sample as 
having shop process and capacity issues had these problems due to 
unanticipated demands. For example, an electronic countermeasure 
control device for the B-52 and C-130 aircraft experienced a surge in 
demands after the September 11, 2001, terrorist attacks. The repair 
facility did not have the floor space to keep up with demand for this 

Higher Than Expected Condemnation Rates:

Both the current review and prior reports contained instances of either 
higher than expected condemnation rates or component reliability 
problems that created parts shortages. Repair parts can only be 
repaired so many times before they can no longer be repaired, and then 
they are "condemned" as beyond repair. Anticipated condemnation rates 
are formed from either engineering estimates or repair records.

In our review, item managers said that shortages of a C-130 aircraft 
ballscrew assembly stemmed from very high condemnations for the last 
3 years. Sometimes the higher condemnation rate was for a component 
part of our sample item, and not the sample item itself. For example, 
item managers said that a piston in a retractable landing gear 
experienced a high condemnation rate, and, in another example, a roll 
pin encountering high condemnations created a shortage for a C-5 
aircraft landing gear strut. Although our 2001 report did not indicate 
higher than expected condemnation rates that led to parts shortages, it 
did report that the life of some parts was shorter than the Air Force 
predicted. For example, a skid detector for the C-5 aircraft failed 
faster than expected, experiencing a 50-percent increase in failures 
that exhausted the parts in stock before they could be 
replaced.[Footnote 7]

Other Reasons for Shortages:

The remaining three reasons in the above table represent more of the 
variety of reasons contributing to parts shortages. In some cases, item 
managers indicated that units in the field would keep broken items to 
be used as spare parts to fix other broken parts. These broken items 
not turned in to the repair facility for repair involve different 
items, such as a circuit card assembly for a jammer in the F-15 
aircraft, a turbine nozzle for aircraft engines, and a B-1B aircraft 
rudder. Rarely used items are those experiencing little or no demand, 
as in the case cited by an item manager of no demand in 2 years for a 
test system's circuit card assembly. Funding constraints represented 
another reason for parts shortages. For example, the lack of funds to 
increase the repair rate of an aircraft engine's compression rotors 
created a shortage of this item.

Our prior reports in 1999 and 2001 contained examples of unanticipated 
demands (for example, no demands since 1993) causing parts shortages, 
or repairs not being done when needed due to the lack of broken parts 
returned from units in the field. One issue reported to some degree by 
both our 1999 and 2001 reports that did not surface as an issue in our 
current review was the transfer of repair work to current Air Force 
repair facilities due to the closure of some Air Force repair 
facilities. Some operational, personnel, and productivity problems 
experienced during that closure were not specifically cited by item 
managers during our current review as a factor influencing parts 

Reasons for Excess Parts also Identified in Previous GAO reports:

Item managers provided a variety of reasons for repair parts excesses 
among our sample items that were similar to those identified in our 
previous reports. Table 2 lists categories of the most frequently cited 
reasons for inventory excesses.

Table 2: Item Manager Reasons for Reparable Parts Excesses:

Reason: Buildup of repair parts to support a new program or for a 
retrofit, modification, upgrade or replacement; Number of responses[A]: 

Reason: Foreign Military Sales program requirements; Number of 
responses[A]: 8.

Reason: Low or decreasing demand for a part; Number of responses[A]: 6.

Reason: Retirement or phasing out of an aircraft; Number of 
responses[A]: 5.

Reason: Other; Number of responses[A]: 18.

Source: GAO survey of Air Force item managers.

[A] The number of reasons is lower than our 75 excess sample items 
because a number of item managers responded that there were some items 
that were not in an excess condition.

[End of table]

The predominant reason for excesses cited by item managers was the 
inventory buildup of repair parts to anticipate the future support for 
a new program or for major changes in an existing program. This is 
similar to our 1997 report where we reported that a common reason for 
inventory items being in excess was purchases made to support a system 
before it was activated.[Footnote 8]

Foreign Military Sales program requirements or potential requirements 
are cited as a contributing factor for excesses eight times. Item 
managers told us that the Air Force stocks and services some reparable 
items that are used to support systems sold to or anticipated to be 
sold to other countries. These items include various radio items such 
as receivers and transmitters for the F-111, and disk brakes for the F-
16. Our 1997 report indicated unneeded quantities in inventory for the 
wiring harness of an airborne radio communication system. Although 
demand for this harness decreased as modifications to the radio system 
were made, quantities were being retained to support the military 
services, the Coast Guard, and foreign military sales and to 
reconfigure other radios.

The most common reason cited in 1997--demands for an item decreased or 
did not materialize--echoes our third most commonly cited reason, low 
or decreasing demand for a part. Aircraft or system retirement was 
cited as the third most common reason for excesses in 1997 and is 
fourth in our current analysis.

Other reasons affecting only one or two of our sample items include a 
repair made that was not required, program changes, or an item becoming 
a throwaway item instead of one that would typically be repaired.

Impacts Cited by Item Managers Similar to Our Past Work:

Item managers cited operational impacts from the inventory 
imbalances that were similar to impacts cited in our past reports. 
Sometimes there was more than a single impact for some individual 
items. Of the 75 shortage sample items, 38 had more than one impact 
cited by item managers and there was no impact cited for 16 items. Of 
the 75 excess sample items, item managers cited no impact for 40 items.

One of the most frequently cited (41 cases) operational impacts of 
repair parts shortages provided by item managers was some form of 
mission impairment at one time or another that kept a weapon system 
from performing its mission. For example, the previously mentioned 
shortage of rotors and backing plates needed to fix the brakes for the 
KC-135 and C-130 aircraft due to a lack of component parts caused both 
aircraft to be unavailable for flying. Although in our 2001 report we 
selected all sample items from three Air Force systems because each 
item caused mission capability problems, the causes of many of these 
problems--such as unanticipated demands, parts production problems, or 
component reliability--were similar.[Footnote 9]

Item managers cited 14 parts shortages that led to delays in planned 
maintenance. For example, one ALC was always behind in providing C-5 
aircraft retractable landing gears for the scheduled maintenance lines. 
In our 1999 report, repairs not being done when needed were cited as an 
impact of component parts shortages.[Footnote 10] In 54 cases, item 
managers cited unfilled or empty stock levels resulting from parts 
shortages, thus contributing to the ALC's inability to meet the 
stocking requirements for the aircraft or system it serviced. For 
example, one center had no shelf supply of a retractable landing gear 
for the B-52 bomber.

Air Force item managers did not cite nearly as many impacts of parts 
excesses. However, in 28 cases item managers cited the consumption of 
warehouse space for parts that were in excess of inventory 
requirements. While some item managers cited space problems, others 
cited the related costs associated with storing excess items. Among a 
number of items in these categories are engine blades and shafts, 
landing gear pistons, C-141 aircraft rear access doors, and B-52 bomber 
electronic warfare circuit cards. What is not clear from item manager 
survey responses, however, is how these warehousing space and cost 
issues would be any different if the quantities of the item had not 
exceeded repair requirements.

Eight other items contained miscellaneous impacts, such as two items 
needing fewer repairs than expected, namely the ignition component of 
an aircraft engine and the F-16 aircraft's radar signal processor.

Agency Comments:

In written comments on a draft of this report, DOD stated that it 
generally concurred with the draft report. DOD's comments can be found 
in enclosure I.

Scope and Methodology:

To identify reasons repaired parts are in a short or excess condition 
(by comparing available worldwide assets to worldwide requirements at 
one point in time), we selected 25 items of each type from those repair 
parts both supplied and repaired at each of the following ALCs: Ogden, 
Ogden, Utah; Oklahoma City, Oklahoma City, Oklahoma; and Warner Robins, 
Warner Robins, Georgia. For each group of 25 items, we selected 20 
items from among the highest dollar value of shortages or excesses. The 
other five items in each group were selected randomly. Using a 
structured questionnaire, we held on-site discussions for this 150-item 
sample with 86 item managers to identify reasons for and operational 
impacts of the excesses and shortages, among other points. We looked at 
collaborating data obtained via the questionnaire to assure ourselves 
that other factors, such as production data and procurement history, 
did not conflict with the reason and impact data. We did not 
independently verify the responses we received from item managers. We 
also reviewed our past work to determine if similar reasons were 
previously identified for shortages and excesses.

We also met with officials of the Air Force Materiel Command, 
Wright Patterson Air Force Base, Dayton, Ohio.

We performed our work from November 2001 through February 2003 in 
accordance with generally accepted government auditing standards.

We are sending copies of this report to the Honorable Donald Rumsfeld, 
Secretary of Defense, and interested congressional committees. The 
report will also be available at no charge on GAO's Web site at http:/

We appreciate the opportunity to be of assistance. If you or your staff 
have any questions regarding this letter, please contact me at (202) 
512-8365 or Lawson "Rick" Gist, Jr., Assistant Director, at (202) 512-
4478. Other key contributors to this review were Gerald Thompson, Jay 
Willer, and R.K. Wild.

William M. Solis, Director
Defense Capabilities and Management:

Signed by William M. Solis:

[End of section]

Enclosure I: Comments from the Department of Defense:

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[End of section]

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[1] U.S. General Accounting Office: Air Force Inventory: Parts 
Shortages Are Impacting Operations and Maintenance Effectiveness, GAO-
01-587 (Washington, D.C.: June 27, 2001); Army Inventory: Parts 
Shortages Are Impacting Operations and Maintenance Effectiveness, GAO-
01-772 (Washington, D.C.: July 31, 2001); Navy Inventory: Parts 
Shortages Are Impacting Operations and Maintenance Effectiveness, GAO-
01-771 (Washington, D.C.: July 31, 2001); Defense Logistics: Much of 
the Inventory Exceeds Current Needs, GAO/NSIAD-97-71 (Washington, D.C.: 
Feb. 28, 1997); and Air Force Supply: Management Actions Create Spare 
Parts Shortages and Operational Problems, GAO/NSIAD/AIMD-99-77 
(Washington, D.C.: Apr. 29, 1999).

[2] Item managers perform materiel management functions such as 
worldwide item distribution and redistribution, materiel requirements 
determinations, budget estimates, cataloging, repair programs, and 
other related functions.

[3] GAO/NSIAD/AIMD-99-77.

[4] GAO/NSIAD-97-71.

[5] GAO-01-587.

[6] GAO/NSIAD/AIMD-99-77.

[7] GAO-01-587.

[8] GAO/NSIAD-97-71.

[9] GAO-01-587.

[10] GAO/NSIAD/AIMD-99-77.