Defense Inventory: Defense Logistics Agency Customers Order Supplies Uneconomically

Highlights

Pursuant to a congressional request, GAO reviewed how the military services requisitioned supplies from the Defense Logistics Agency (DLA), to determine whether DLA customers appropriately used: (1) economical methods to order supplies; and (2) supply requisition priorities.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	To provide the military services and other supply system customers with incentives to use more economical ordering methods and high-priority services only when necessary, the Secretary of Defense should direct the Director, DLA, to determine the cost of filling a requisition and levy a minimum charge per requisition when the percentage surcharge based on the value of the item is not sufficient to recover this cost.	Closed – Implemented The Office of the Secretary of Defense (OSD) required the military departments to: (1) issue policy to their activities directing that order consolidation take place whenever cost-effective; and (2) review long-range ordering programs and incorporate requisition consolidation into programming efforts.
Department of Defense	To provide the military services and other supply system customers with incentives to use more economical ordering methods and high-priority services only when necessary, the Secretary of Defense should direct the Director, DLA, to determine the additional cost for processing high-priority requisitions and charge customers for this service.	Closed – Implemented OSD issued new procedures that require the requisitioning activity to indicate on the requisition whether premium transportation is required. Failure to do so will result in automatic downgrading.
Department of Defense	The Secretary of Defense should direct the Secretary of the Army to discontinue the policy of assigning a predetermined high priority to all requisitions submitted under the Total Package Fielding Program.	Closed – Implemented DOD directed the Army to separate its materiel allocation priorities from its transportation priorities when it submits requisitions.

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Topics

National Defense

Army suppliesCost effectiveness analysisDefense economic analysisDefense procurementFederal supply systemsInventory control systemsMilitary cost controlMilitary inventoriesMilitary forcesDefense logistics