Excessive Air Force Inventories Result From Duplicative Spare Parts Requirements

GAO reviewed the operations of five Air Force logistics centers which support Air Force weapons systems to assess the validity of the factors used to compute maintenance needs and to determine how these needs are included in Air-Force-wide requirements.

GAO found that the programming logic used to compute Air-Force-wide requirements resulted in some maintenance requirements' being counted twice. All maintenance requirements are included in Air-Force-wide forecasts of usage. Through the computer logic some of the same requirements, in the form of a depot supply level, are added to compute a systemwide reorder point. Consumable parts are purchased when established reorder levels are reached, and duplicating requirements causes reorder points to be reached prematurely. GAO determined, through analysis of computer tapes, that the Air Force was investing about $119 million in unnecessary inventory. It costs about $21.5 million annually to maintain this inventory. As a result of this finding, the air logistics centers took action to reduce requirements by $3.6 million, resulting in a yearly savings of $612,000 in holding costs. However, elimination of excesses of about $115.4 million will require action at the headquarters level or above. GAO also found that depot supply levels were overstated due to: (1) inflated order and shipping time; (2) unwarranted safety levels; and (3) invalid backorders.

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: Harry R. Finley Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 512-5187