DLA's Efforts To Identify and Correct Causes of Delinquent Deliveries

GAO reviewed the Defense Logistics Agency's (DLA) hardware supply centers' use of the Standard Automated Materiel Management System (SAMMS) in managing procurement deliveries and dealing with delinquencies.

Untimely deliveries can increase procurement and other costs and impair the DLA mission in supplying secondary or common use supply items to military users. DLA estimated that monitoring delivery schedules costs nearly $10 million annually. GAO found that DLA makes extensive use of the SAMMS and obtains a vast amount of delinquency data; however, it uses the data as a surveillance process to resolve delinquencies after the fact. DLA has not fully used the SAMMS as a management tool to identify either the areas with the greatest number of delinquencies or their causes. The SAMMS data are not used consistently by the hardware supply centers, and information essential for evaluating causes of the delinquencies is not included in the system. There was uncertainty at the centers as to how contractors' performance histories ought to be considered in making contract awards. The hardware supply centers do not fully use the SAMMS contract delinquency report, the F-38, to segregate the voluminous amount of delinquency data. By segregating the data, the centers could identify major problem areas and the causes of the delinquencies. DLA could also use the data as the basis for formulating and monitoring compliance with policy and initiating training on how the supply centers should deal with the problem areas. To address GAO concerns, DLA has proposed: (1) issuing a policy letter to the supply centers, instructing them to consider contractors' past delivery histories when making contract awards; and (2) making the delinquency data more useful by revising the F-38 report.