Procurement To Satisfy Requisitions for Out-of-Stock Material Could Be Reduced

GAO reviewed the procedures and practices regarding requisitions of unstocked and out-of-stock items at the Navy's two principal inventory control supply centers, the Ships Parts Control Center (SPCC) and the Aviation Supply Office (ASO).

GAO found that the Navy could save millions of dollars annually by using existing replenishment contracts rather than by making single purchases, promptly processing cancellation requests, and requiring priority designator codes on requisitions. Navy procurement procedures require that: (1) single purchases be limited to high priority and nonstocked items; (2) cancellation requests be processed in cases where the contract has not been awarded or is over $200; and (3) priority designator codes be assigned based on the urgency of the need for the material. GAO found that: (1) due to emphasis on prompt delivery for material for awarded contracts and the number of individuals involved in procurement, SPCC was making many unnecessary single purchases; (2) ASO was not attempting to cancel requisitions for nonstocked items; and (3) many of the reviewed requisitions, submitted by one major user, were coded high priority when they should have been coded routine. GAO believes that the practice of improperly coding requisitions is widespread, and a Naval Audit Service multilocation report indicates that from 10 to 65 percent of requisitions are coded incorrectly.

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: National Security and International Affairs Division Phone: (202) 275-4141