Defense Inventory: Improvements Needed to Prevent Excess Purchases by the Air Force

NSIAD-00-5 Published: Nov 01, 1999. Publicly Released: Nov 01, 1999.
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Pursuant to a congressional request, GAO reviewed inventory the Air Force had on contract that was excess to current operating requirements.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To improve the process for cancelling purchases that exceed requirements, the Secretary of Defense should direct the Secretary of the Air Force to: (1) provide managers with the requirements information needed to cancel contracts in a timely manner; (2) examine the necessity for using lengthy operating and termination periods and additional levels of supply (worldwide termination levels) when identifying contracts for termination; and (3) eliminate prestocked war reserve requirements that are not authorized for purchase from all calculations that affect contract cancellation decisions.
Closed – Implemented
In a December 7, 1999 memo, the Secretary of the Air Force directed the Air Force Materiel Command to take appropriate actions to resolve all the findings and adopt the recommendations noted in the GAO report. In order to provide more timely information to managers for canceling contracts, the Air Force reviewed its process and found that system interface problems prevented providing more timely data. The Air Force also examined its operating and worldwide termination levels and concluded that no changes were needed; however, it subsequently revised its process to eliminate both the operating period and the worldwide termination levels. DOD closed the recommendation regarding war reserve requirements, and currently the Air Force does not cancel orders for pre-stocked war reserves materials that managers are not authorized to purchase.
Department of Defense The Secretary of Defense should: (1) consider all potential reclamation assets when making cancellation decisions; and (2) take measures to improve the accuracy of inventory management records, such as ensuring that requirements and on-contract inventory are properly recorded.
Closed – Implemented
The Air Force is taking action to improve the accuracy of inventory management records by developing a Purchase Request Processing System. The System was scheduled to be operational as of April 2002; however, as of August 18, 2004, an Air Force official said that the System would come on line later this year. DOD did not agree with the recommendation regarding consideration of reclamation assets when canceling orders for materiel that is no longer needed, and closed the recommendation without taking action.

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