Military Logistics
Buying Spares Too Early Increases Air Force Costs and Budget Outlays Gao ID: NSIAD-86-149 August 1, 1986GAO reviewed the Air Force's practices for purchasing recoverable aircraft spare parts to determine whether it was buying them at the appropriate time.
GAO found that: (1) two of the five air logistics centers regularly bought recoverable spares up to 14 months earlier than necessary; (2) the two centers prematurely invested about $374.5 million in spare parts inventories in 1984, increasing their inventory holding costs by about $52.2 million; (3) approximately $125.4 million of the total amount the centers invested prematurely represented purchases made more than 1 year too early; and (4) the Air Force could have deferred requests for the two fund appropriations for 1 year. GAO also found that elimination of the practice of early procurement would result in significant reductions in inventory holding costs and deferrals in procurement outlays and budget requests.
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