Defense Inventory:

More Accurate Reporting Categories Are Needed

NSIAD-93-31: Published: Aug 12, 1993. Publicly Released: Sep 14, 1993.

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David R. Warren
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Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) on-hand approved acquisition objective inventory, focusing on whether its Supply System Inventory Report adequately disclosed the amount of: (1) secondary inventory needed to ensure uninterrupted supply; and (2) excess inventory.

GAO found that: (1) of the $53.5 billion in the DOD acquisition objective inventory, only $38.6 billion is needed to ensure uninterrupted materiel supply requirements; (2) DOD could not determine the extent to which the excess inventory would be used because of inaccurate and changing requirements; and (3) the approved acquisition objective inventory often overstates inventory requirements, does not provide Congress and DOD with an accurate description of the types of inventory needed to ensure uninterrupted supply, and does not disclose excess or unusable inventory.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOD disagreed with the findings and stated that GAO did not consider a $26 billion shortage that existed on September 30, 1991. GAO is looking at the shortage and will report on it in the near future.

    Recommendation: The Secretary of Defense should separate in the Supply System Inventory Report the amount of inventory that it has on hand to satisfy its reorder point and replenishment formula requirements from additional inventory it is currently reporting as approved acquisition objective.

    Agency Affected: Department of Defense


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