Better Methods for Validating and Reconciling Unfilled Materiel Orders Could Provide Substantial Economies to the Army

GAO made this follow-up review to assess the effectiveness of actions taken by the Army to strengthen its policies, procedures, and practices for periodically validating and reconciling older, outstanding materiel orders.

GAO found that the Army continues to spend millions of dollars annually on unneeded materiel. GAO estimated that, on the basis of its sampling test, 65,000 invalid orders were on hand at Army wholesale supply sources, and the Army will spend $100 million over a 3-year period to fill invalid orders to fund inflated forecasted requirements for the related items. Invalid orders revealed to GAO validation checks included orders for parts to repair inoperable equipment which did not exist or had already been repaired, orders for the wrong item, duplicate orders, and orders for materiel for special projects that had been terminated. Additionally, GAO found that the Army procedures and practices for reconciling and validating materiel orders have not been effective in ensuring that an acceptable level of compatibility is sustained for related materiel order data shown on supply records kept at wholesale and retail supply levels. Significant imbalances of as much as 53 percent exist between the records of Army wholesalers and their customers relative to either the number of outstanding orders or the quantities on order. The Army problems in reconciling and validating older, outstanding materiel orders continue because prescribed policies and procedures are either inadequate or not being observed and because of inadequacies in automated logistics and systems.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Henry W. Connor Team: General Accounting Office: Procurement, Logistics, and Readiness Division Phone: (202) 275-4141