Navy Supply

Despite Navy validation processes designed to detect and cancel unneeded requirements, invalid backorders continue to be overlooked during validation checks because some field activities do not follow required validation procedures. When invalid backorders go unnoticed, the Navy ends up wasting money buying, repairing, transporting, and storing parts that it no longer needs. The Navy's practice of exempting whole categories of backorders from the validation process also prevents many invalid backorders from being identified and canceled.

GAO found that: (1) the Navy failed to identify and cancel a large number of invalid backorders during the required quarterly validation process because some field groups did not follow required validation procedures; (2) field groups that followed procedures had no invalid backorders; (3) some field personnel were not aware of the validation procedures, did not review backorders to determine if on-order quantities exceeded the stock, or verify the need for backordered equipment; (4) some field groups have established additional controls that go beyond the specified validation procedures; (5) invalid backorders resulted in unnecessary procurements and repairs, and excess inventories; (6) the Naval Supply Systems Command (NSSC) and inventory control officials did not make periodic field visits to monitor the backorder validation program; (7) the Navy exempted many materials from the validation program, which prevented the identification and cancellation of invalid backorders; and (8) about 29 percent of the exempt-stock backorders were invalid.

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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