Defense Inventory

Problems in Managing Secondary Items Gao ID: T-NSIAD-90-19 March 6, 1990

GAO discussed the Department of Defense's (DOD) management of its inventories of secondary items. GAO noted that: (1) the total value of DOD inventory increased by $60 billion from 1980 through 1988, to a total of $103 billion; (2) over 90 percent of the increase occurred in DOD inventories of aircraft components, ship and submarine parts, and construction, industrial, and general supplies; (3) DOD management philosophy rewarded obligating funds and filling orders and did not emphasize economy or efficiency; and (4) the military services had large inventories of unrequired items and few internal controls to terminate orders for unrequired items. GAO believes that DOD needs to update its supply systems, ensure that managers have adequate inventory information, and discourage purchases of unnecessary inventory.

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