National Defense Stockpile:

National Security Council Study Inadequate To Set Stockpile Goals

NSIAD-87-146: Published: May 4, 1987. Publicly Released: May 4, 1987.

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In response to a congressional request, GAO: (1) evaluated the methodology and assumptions the National Security Council (NSC) used in its study of national defense stockpile goals; and (2) compiled the views of the participating agencies.

GAO noted that the NSC report recommended the: (1) reduction of the current stockpile goals of $16.1 billion to $700 million; and (2) filling of stockpile shortfalls with the receipts from the sale of surplus stocks. GAO also noted that Congress prohibited reductions in stockpile goals until October 1, 1987. GAO found that the study: (1) did not adequately reflect major disagreements about its assumptions or reflect that its results could vary greatly with changes in those assumptions; (2) planned for less than total mobilization, which limited the size of the planned force; (3) did not fairly represent the nature or content of participating agencies' input; (4) often did not disclose participants' qualifications and objections; (5) failed to identify some agencies' responsibilities accurately; and (6) did not include direct participation by industry representatives, although such participation could have improved the accuracy of study data. GAO believes that a lack of accurate information on raw material supply and demand and a lack of organizational capability to plan and manage the stockpile continue to hinder assessments of stockpile requirements.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Conferees agreed to continue restrictions on changes in the stockpile. All changes in goals must be justified, and changes over 10 percent must be expressly authorized by law. They also required changes to clarify management responsibility and provide stricter control over use of money from the stockpile transaction fund. The House and Senate passed these provisions on November 18 and 19, 1987.

    Matter: In view of the Administration's position that the NSC study is a valid basis for stockpile planning, and of existing Administration directives to implement the NSC study's stockpile goals and recommendations, Congress may wish to consider continuing its restrictions on changes in the stockpile.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Director, FEMA, agreed and issued a policy that any future analyses by FEMA follow six principles which parallel the six recommendations. Compliance with the principles is to be certified to in any recommendation presented to, or by, FEMA for determinations to be made under section 3 of the Stock Piling Act.

    Recommendation: The Director of the Federal Emergency Management Agency (FEMA) should ensure that future analyses of stockpile requirements: (1) be directed and performed by the individuals and organizations with subject-area experience and expertise; (2) contain direct input from the industries involved in materials mining and processing; (3) consider a reasonable range of assumptions and provide results of major options to decision makers; (4) fairly present study participants' inputs, and clearly report major dissenting views, if any; (5) verify or supplement economic models, where practical, by the best available direct measures of material requirements; and (6) use assumptions and planning factors consistent with those used by federal departments for similar purposes.

    Agency Affected: Federal Emergency Management Agency


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