The Department of Defense Should Increase Efforts To Implement Vertical Controls Over Military Stock Funds

LCD-77-437: Published: Sep 7, 1977. Publicly Released: Sep 7, 1977.

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The Senate Committee on Appropriations requested a followup review on actions taken by the Department of Defense (DOD) to implement centralized controls over Defense stock funds. DOD has five stock funds which are all under the policy guidance of the Secretary of Defense. Each military service operates a fund to provide for its own needs.

The Air Force and the Navy have implemented vertical controls over important segments of their stock funds. Vertical controls have not been extended to all Air Force and Navy stock fund items primarily because DOD has not adequately coordinated service implementation of vertical management. The Army has not implemented vertical controls over any part of its stock fund which operates on a decentralized basis. Army inventory managers did not control their stocks as efficiently as their Air Force and Navy counterparts. The Air Force and Navy implementation demonstrated that the concept is feasible and effective, that it provides better supply responsiveness to stock fund customers, and that it makes more efficient use of stock fund assets. The delay in implementing vertical stock funds resulted in larger stock fund capital needs.

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