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GAO discussed the Department of Defense's (DOD) estimates and requirements for the national defense stockpile. GAO noted that DOD: (1) bases its stockpile requirements on assumptions about war scenarios, military force structure, domestic production of strategic and critical materials, and availability of materials from foreign sources; (2) believes that recent world events necessitate reevaluation of its last threat assessment, which could lead to further reductions in stockpile goals; (3) uses the Department of State's reliability assessments of foreign suppliers, which may not provide an adequate and reliable basis for determining stockpile requirements; (4) uses outdated data and does not adequately account for uncertainty in its use of material consumption ratios for determining stockpile requirements; (5) should cautiously proceed with stockpile disposal plans, due to the estimation uncertainties; (6) reasonably proposed downsizing or eliminating requirements for some materials, although some industries and foreign countries expressed concerns about disposal plans; (7) has not consulted with other federal agencies in determining its 5-year disposal alternative plans, and generally involves other federal agencies in stockpile issues on an informal, ad hoc basis; (8) has significant excesses of ferroalloy materials it is legislatively required to procure, but without defense industry, domestic producers may not be able to compete with foreign producers; and (9) has made limited progress in addressing previous GAO recommendations regarding stockpile requirements.

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