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Highlights

This report reviews the Department of Defense's (DOD) management practices for demilitarizing excess ammunition. Specifically, GAO evaluates (1) the extent to which the excess ammunition stockpile has been reduced and whether the liability associated with excess ammunition has been fully identified, (2) the Army's reliance on contracted demilitarization and the impact of doing so on government facilities that use similar environmentally friendly processes, and (3) the feasibility of using excess ammunition for U.S. training needs. GAO found that DOD's reported stockpile of excess ammunition has grown rather than decreased, rising from 354,000 tons in 1993 to 493,000 tons at the end of 2000. In addition, the reported stockpile does not include all excess ammunition, which understates DOD's ultimate liability for demilitarizing ammunition. In recent years, the Army has devoted 50 percent of its excess ammunition demilitarization budget to contractors that use environmentally friendly demilitarization processes. Although a congressional directive resulted in greater emphasis on contractor demilitarization, the Army began and later expanded this effort without considering the effect it would have on government facilities. With increased contractor demilitarization, the Army has retained and underutilized environmentally friendly demilitarization capabilities in government facilities. Finally, some excess ammunition potentially could be used to meet training needs, but further analysis by the Army is needed to fully evaluate the potential.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To improve the financial reporting, economy, and efficiency of demilitarizing excess ammunition, the Secretary of Defense should require the Secretary of the Army to identify and include the total liability (domestic and overseas) associated with demilitarizing excess ammunition in the Department's annual consolidated balance sheet.
Closed - Implemented
DOD included $1.2 billion contingent liability in its 2001 financial statements.
Department of Defense 2. To improve the financial reporting, economy, and efficiency of demilitarizing excess ammunition, the Secretary of Defense should require the Secretary of the Army to develop a plan in consultation with Congress that includes procedures for assessing the appropriate mix of public/private sector capacity needed to demilitarize excess ammunition and the cost-effectiveness of using contractors versus government facilities to demilitarize excess ammunition, with specific actions identified for addressing the capacity issue.
Closed - Implemented
DOD reduced ammunition costs by $28.2 million.
Department of Defense 3. To improve the financial reporting, economy, and efficiency of demilitarizing excess ammunition, the Secretary of Defense should require the Secretary of the Army to comply with DOD's policy to routinely compare planned purchases of ammunition for training with usable ammunition in the stockpile and require the single manager for conventional ammunition to prepare periodic reports to the Office of the Under Secretary of Defense For Acquisition, Technology, and Logistics, documenting such comparisons and showing the quantities and types of ammunition reclaimed from the stockpile.
Closed - Implemented
DOD used $111.4 million of excess ammunition for training in lieu of new procurements.

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