What GAO Found
GAO’s review of the Defense Logistics Agency’s (DLA) management of defective aviation parts found that DLA’s plan for corrective action partially addresses each of the four elements in the House report regarding deficiencies in DLA’s management of defective aviation parts. These elements relate to: (1) coordinating and pursuing restitution; (2) searching inventory to identify and remove defective parts; (3) returning defective parts to contractors for replacement; and (4) tracking the status of returns and determining the appropriate form of restitution.
- The plan discusses coordination of efforts and restitution. Before restitution can be pursued, however, DLA needs to determine that the defect is the fault of the contractor. Information in the plan shows a large number of Product Quality Deficiency Reports (PQDR) with undetermined causes, but the plan does not explain how DLA will address defects with undetermined causes.
- The plan broadly discusses efforts for better identification of defective parts, but it does not explain how the search will result in the removal of defective parts from the Department of Defense (DOD) inventory.
- The plan broadly discusses processes that include the return of defective parts to the contractors that provided them, but it does not show how DLA will use these processes to aid in the replacement of defective parts.
- The plan discusses steps to improve coordination between entities responsible for the tracking of defective parts, and it addresses the tracking of the status of defective parts shipped back to contractors, but it does not specify how the appropriate form of restitution—replacement, repair, or refund—is to be provided.
DLA officials stated that they are continuing to refine and expand on their plan, and they provided documentation stating that management oversight now includes the review of metrics on the timeliness and completeness of actions taken by all review participants at DLA. Without having a plan that fully addresses noted deficiencies and recommended improvements, however, DLA management and Congress lack reasonable assurance that the appropriate corrective actions have been determined and can be effectively implemented, now or in the future.
Additionally, GAO found that DLA has taken steps since the issuance of the 2016 DOD Inspector General report to obtain restitution for defective parts and remove those parts from the inventory. Specifically, it has taken actions toward improving the way in which it documents and monitors the process for restitution. However, the results of these actions remain to be determined. DLA officials stated that these steps are relatively recent, they are aware of missing information, and they are working with the military services to gather the information.
Why GAO Did This Study
House Report 114-537 included a provision for GAO to assess whether the DLA plan ensures that DLA addresses each of the four mandated elements. GAO examined (1) the extent to which the plan addresses the elements in the House report regarding deficiencies in DLA’s management of defective aviation parts; and (2) the steps DLA has taken since the issuance of the 2016 DOD Inspector General report to implement corrective actions to obtain restitution for defective parts and remove those parts from the inventory. For objective one, GAO reviewed DLA documents that officials collectively referred as the plan, and GAO identified and assessed the relevant parts of the plan relating to the four elements in the House report. For objective two, GAO reviewed DLA data on PQDRs closed from January 2014 through April 2016—including the data the DOD Inspector General recommended that DLA review for progress on obtaining restitution—and also reviewed open and closed PQDRs from September and October 2016.
GAO recommends that the Secretary of Defense direct the Director of DLA to strengthen its plan to fully address all four of the mandated elements. These include: (1) coordination to pursue restitution, (2) inventory search, (3) return of defective parts, and (4) restitution in appropriate form.
Recommendations for Executive Action
|Department of Defense||To help ensure that DLA has a plan that can effectively guide corrective actions relating to identified deficiencies in its defective spare parts restitution and removal process, the Secretary of Defense should direct the Director of DLA to strengthen its plan to fully address all four of the mandated elements. These include: (1) coordination to pursue restitution, (2) inventory search, (3) return of defective parts, and (4) restitution in appropriate form.|