Military Logistics

Air Force's Management of Backordered Aircraft Items Needs Improvement Gao ID: NSIAD-89-82 June 2, 1989

Pursuant to a congressional request, GAO reviewed the Air Force's management of back-ordered aircraft items to determine the: (1) effectiveness of back-order reconciliation and validation procedures and practices; and (2) Air Force's promptness in cancelling back-orders on items which were no longer needed.

GAO found that: (1) 332 of the 850 back-orders it reviewed were invalid, even though the Air Force had periodically revalidated the back-orders; (2) the 332 invalid back-orders, valued at $5.9 million, involved orders for parts no longer needed to repair equipment, unauthorized materiel, wrong items, and duplicate items; (3) periodic validation practice weaknesses and retail supply computer deficiencies primarily caused the failure to detect or cancel the invalid back-orders; (4) the Air Force overstated its fiscal year 1989 aircraft item requirements by about $13.5 million, since it did not consider depot supply-level assets that could satisfy the requirements, included depot maintenance back-orders twice in annual procurement computations, and used erroneous back-order data; (5) although retail supply activities requested quarterly cancellations of invalid back-orders ranging in value from $665.7 million to about $1 billion from 1985 through 1987, Air Force Logistics Command (AFLC) air logistics centers cancelled only about 1 percent of those back-orders; (6) AFLC correction of problems in its automated program for compiling back-order validation information allowed the centers to cancel about 43 percent of invalid back-orders; and (7) the Air Force's indefinite suspension of its program for automatically cancelling back-orders when customers did not respond to quarterly back-order validation requests prevented possible savings of about $71.3 million from cancelling about 2,634 invalid back-orders.

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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