Defense Inventory Growth In Air Force And Navy Unrequired Aircraft Parts

NSIAD-90-100 Defense Inventory: Growth in Air Force and Navy Unrequired Aircraft Parts

Pursuant to a congressional request, GAO reviewed Department of Defense (DOD) aircraft parts inventories, focusing on the causes of unrequired inventory growth and how to minimize it. GAO found that: (1) the Air Force's unrequired aircraft parts inventories increased 204 percent between 1980 and 1988, from $9.2 billion to $28 billion; (2) overstated use rates caused 31 percent of unrequired stock growth; (3) an increase in economically reparable items accounted for 16 percent of unrequired stocks; (4) recent reductions in Air Force war reserve requirements produced 10 percent of unrequired stocks; (5) improvements in parts reliability accounted for 8 percent of unnecessary stocks; (6) the Air Force and the Navy were not effectively identifying and terminating orders for unrequired items; (7) the Air Force's overestimated procurement lead times for 5 of 29 unrequired items contributed to the growth of unnecessary inventories; (8) for 3 of 22 items, the Navy procured quantities that exceeded economic order requirements; (9) DOD and Air Force reporting initiatives to reclassify some unrequired items as required items could hinder the identification of unrequired stock; (10) the Air Force's aircraft parts inventories were growing beyond current-year and wartime requirements; and (11) the Air Force's spending guidelines encouraged earlier purchases, multiyear contracts, and discounted quantity buys, thereby increasing the likelihood of unrequired stock growth.