DOE and GSA Compliance With the Strategic and Critical Materials Stock Piling Act

Pursuant to a congressional request, GAO reviewed certain aspects of the Strategic and Critical Materials Stock Piling Act to determine whether: (1) the Department of Energy (DOE) must make monthly transfers of 30 percent of net naval petroleum reserve receipts to the National Defense Stockpile Transaction Fund; and (2) the General Services Administration (GSA) is correct in asserting that bartering stockpile materials for upgrading provides no receipts and, therefore, is not affected by the $250 million Transaction Fund limitation specified in that law.

GAO found that, before the Fund's unobligated balance reached $250 million and prohibited further sales from the stockpile, GSA requested DOE to stop making monthly deposits to the Fund and keep the revenues in a suspense account. Stockpile materials are bought, sold, or bartered to ensure that adequate stocks are on hand, and the money received from the sales of excess materials is deposited into the Fund until Congress appropriates it. If DOE deposits had continued into the Fund, its unobligated balance would have reached the maximum and precluded further disposal sales of excess materials from the stockpile. GAO believes that: (1) GSA manipulated the law for its own purposes rather than to continue a reasonable frequency of transfers to the Fund; (2) barter transactions are not precluded even if the Fund ceiling is exceeded; and (3) the GSA decision to cease obligating funds appropriated for purchases under existing authority is a deferral of budget authority which GAO has reported to Congress.