Army Logistics

Use of Long Supply Assets in Depot-Level Repair Programs Could Reduce Costs Gao ID: NSIAD-90-27 November 16, 1989

Pursuant to a congressional request, GAO examined the Department of the Army's inventory operations, focusing on: (1) whether the Army had a program to use long-supply spares and repair parts in depot-level repair programs and, if so, whether the program worked effectively; and (2) the economic advantages of using those assets in repair programs.

GAO found that: (1) although the Army developed an automated program in 1981, it did not match long-supply assets with the large number of ongoing or scheduled programs; (2) one inventory control point developed an automated program that the Army could use at the other five inventory control points to provide Army-wide capability; (3) although some inventory managers had manually matched long-supply assets to applicable repair programs, the depots did not requisition the assets from inventory control points because of the Depot Systems Command's (DSC) reluctance to pay full price for stock-funded assets; (4) DSC believed that inventory managers should issue stock-funded, long-supply assets to depots at less-than-full unit price, since regulations allowed depots to adjust the next year's prices to recover any losses; (5) none of the six inventory control points routinely screened their inventories to determine the potential for using long-supply assets in their repair programs; (6) the Army could have used its $59.6 million in long-supply assets to replace assets scheduled for repair and saved about $14.9 million; (7) the Army reported problems that hindered the maximum use of long-supply assets but did not correct them because its internal control program did not ensure prompt resolution of audit findings; and (8) the Army Materiel Command (AMC) did not identify material weaknesses in the use of long-supply inventories in its annual assessments for fiscal years 1987 and 1988.

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.

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