Defense Inventory

Pursuant to a congressional request, GAO reviewed Department of Defense (DOD) aircraft parts inventories, focusing on the causes of unrequired inventory growth and how to minimize it.

GAO found that: (1) the Air Force's unrequired aircraft parts inventories increased 204 percent between 1980 and 1988, from $9.2 billion to $28 billion; (2) overstated use rates caused 31 percent of unrequired stock growth; (3) an increase in economically reparable items accounted for 16 percent of unrequired stocks; (4) recent reductions in Air Force war reserve requirements produced 10 percent of unrequired stocks; (5) improvements in parts reliability accounted for 8 percent of unnecessary stocks; (6) the Air Force and the Navy were not effectively identifying and terminating orders for unrequired items; (7) the Air Force's overestimated procurement lead times for 5 of 29 unrequired items contributed to the growth of unnecessary inventories; (8) for 3 of 22 items, the Navy procured quantities that exceeded economic order requirements; (9) DOD and Air Force reporting initiatives to reclassify some unrequired items as required items could hinder the identification of unrequired stock; (10) the Air Force's aircraft parts inventories were growing beyond current-year and wartime requirements; and (11) the Air Force's spending guidelines encouraged earlier purchases, multiyear contracts, and discounted quantity buys, thereby increasing the likelihood of unrequired stock growth.

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: Team: Phone: