Air Force Requirements

Cost of Buying Aircraft Consumable Items Can Be Reduced by Millions Gao ID: NSIAD-93-38 November 18, 1992

Contrary to Congress' expectations, the Air Force did not make the changes GAO recommended in a July 1991 report (GAO/NSIAD-91-201) concerning its consumable item requirement computation system. The changes would have ensured that (1) recurring demand back orders were not counted twice in requirement computations and (2) on-hand assets available to satisfy depot maintenance requirements were considered in the computations. Had the Air Force made the recommended changes, it could have reduced fiscal year 1993 requirements by $508 million and related procurements by $203 million. This estimate is based on budget data showing procurements to be about 40 percent of requirements.

GAO found that: (1) the Air Force continues to include recurring demand backorders in both the lead-time demand and backorder portions of the requirements computation, which has increased requirements by $383 million and related fiscal year (FY) 1993 Air Force procurements by about $153 million; (2) the Department of Defense (DOD) and Air Force believe that it is necessary to include recurring demand backorders twice in the requirements computation to compensate for previous wholesale stock shortages and to avoid future outages; (3) the Air Force has overstated its FY 1993 procurement requirements for consumable items by $50 million by excluding from requirements computations on-hand assets reserved to satisfy depot maintenance requirements; and (4) DOD and the Air Force believe that assets held in reserve for depot maintenance support are not available to offset worldwide wholesale requirements. GAO believes that the Air Force could still make the recommended changes to its requirements computation system, since the: (1) consumable item requirements computation system has self-correcting features to compensate for past shortages and to prevent recurrences; and (2) worldwide wholesale requirements include forecasted depot maintenance requirements.

Recommendations

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