Defense Inventory

Nearly $15 billion of $53.5 billion worth of inventory intended to meet wartime and peacetime needs--spare and repair parts, fuel, construction materials, clothing and textiles, and medical and dental supplies--was unneeded, according to a recent GAO analysis. In other words, only $38.6 billion was actually needed to guarantee an uninterrupted supply of materiel as required by Defense Department (DOD) regulations. Not only is it unclear what portion of the nearly $15 billion worth of inventory may eventually be used, but in the past, changing requirements resulted in some inventory becoming excess to DOD's needs. As now reported, this inventory (1) overstates that amount of inventory that is needed; (2) does not provide Congress, DOD managers, and others with an accurate description of the inventory that the Pentagon needs to ensure uninterrupted supply; and (3) does not disclose the extent to which DOD is holding inventory that may never be used and exceeds current needs.

GAO found that: (1) of the $53.5 billion in the DOD acquisition objective inventory, only $38.6 billion is needed to ensure uninterrupted materiel supply requirements; (2) DOD could not determine the extent to which the excess inventory would be used because of inaccurate and changing requirements; and (3) the approved acquisition objective inventory often overstates inventory requirements, does not provide Congress and DOD with an accurate description of the types of inventory needed to ensure uninterrupted supply, and does not disclose excess or unusable inventory.

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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