Defense Inventory: Implementation Plans to Enhance Control Over Shipped
Items Can Be Improved (Letter Report, 11/15/2000, GAO/GAO-01-30).
The Department of Defense (DOD) annually ships inventory with a reported
value of billions of dollars to various locations around the world, and
for years, DOD has had difficulty tracking this inventory from origin to
destination. GAO reviewed six draft implementation plans, developed by
the four military services,the Defense Logistics Agency, and the U.S.
Transportation Command to implement corrective actions. The six draft
implementation plans have significantly improved on DOD's original
planfor tracking inventory. They are, however, inconsistent in content
and specificity and do not reflect a coordinated, DOD-wide approach to
correcting the lack of visibility over inventory being shipped. In
addition, these draft plans lack detailed performance measures for
monitoring progress and determining the effectiveness of the actions
after they are implemented, and they do not address how DOD will ensure
appropriate coordination among the military services and DOD commands in
the implementation of the corrective actions or how DOD will monitor
future progress. Lastly, the Office of the Secretary of Defense has not
established a date for when the plans should be finalized.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GAO-01-30
TITLE: Defense Inventory: Implementation Plans to Enhance Control
Over Shipped Items Can Be Improved
DATE: 11/15/2000
SUBJECT: Military inventories
Inventory control systems
Internal controls
Logistics
Property losses
Federal property management
Federal agency accounting systems
Strategic planning
Performance measures
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Testimony. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-01-30
A Report to Congressional Committees
November 2000 DEFENSE INVENTORY
Implementation Plans to Enhance Control Over Shipped Items Can Be Improved
GAO-01-30
Letter 3 Appendixes Appendix I: Status of DOD's Actions Regarding
Secondary Items 22 Appendix II: Comments From the Department of Defense 33
Appendix III: GAO Contacts and Staff Acknowledgments 37
Related GAO Products 38
Lett er
November 15, 2000 Congressional Committees The Department of Defense
annually ships inventory with a reported value of billions of dollars to
various locations around the world. For years, the Department has had
difficulty tracking this inventory from origin to destination. Concerns
about the vulnerability of these shipments to fraud, waste, and abuse led
the Congress to enact section 349 of the Strom Thurmond National Defense
Authorization Act for Fiscal Year 1999 (P. L. 105- 261), which required the
Department of Defense to develop a comprehensive plan for controlling
inventory while it is being shipped. The Under Secretary of Defense for
Acquisition and Technology submitted the Department's plan to the Congress
on September 14, 1999. The statute also required that our office review the
plan and provide to the Congress any comments we considered appropriate. In
response to that requirement, we sent you a report on February 22, 2000. 1
In that report we recommended that the Department of Defense improve the
plan by modifying it to include (1) key management elements for monitoring
implementation and measuring progress and (2) specific actions to address
underlying weaknesses in the controls over inventory being shipped.
Section 349 also requires our office to monitor the implementation of the
plan and to report within 1 year after the Department submitted its plan to
the Congress on the extent to which the plan has been implemented. This
report is in response to that requirement.
In response to section 349, the Office of the Secretary of Defense directed
the four military services, the Defense Logistics Agency, and the U. S.
Transportation Command to develop detailed implementation plans for
implementing the 18 corrective actions identified in the Department's
September 1999 plan. As of June 30, 2000, all six implementation plans had
been drafted and submitted to the Office of the Secretary of Defense for
review.
As agreed with your offices, we reviewed the six draft implementation plans
to determine (1) the extent to which they addressed the recommendations in
our February 22, 2000, report and (2) the status of the
1 Defense Inventory: Plan to Improve Management of Shipped Inventory Should
Be Strengthened( GAO/ NSIAD- 00- 39, Feb. 22, 2000).
18 proposed actions listed in the Department's plan to improve its control
over inventory shipments. We will continue to monitor and report on the
development and implementation of these plans.
Results in Brief The six draft implementation plans have significantly
improved upon the Department's original plan and contain features that are
generally
responsive to the recommendations in our February 22, 2000, report. However,
these plans are inconsistent in content and specificity and do not reflect a
coordinated, Defense- wide approach to correcting the lack of visibility
over inventory being shipped. For example, the Navy's plan provides a
comprehensive discussion of the planned corrective actions while the Air
Force plan states that the Air Force will further study the weaknesses and
identify corrective actions at a later date. Because many of these actions
will not be completed in the near future, it is not clear whether the
Department's proposed actions will effectively address all the deficiencies
identified in our February 2000 report. In addition, these draft plans lack
detailed performance measures for monitoring progress and determining the
effectiveness of the actions after they are implemented. Further, these
draft implementation plans do not address how the Department will ensure
appropriate coordination among the military services and Defense commands in
the implementation of the corrective actions or how the Department will
monitor future progress. Lastly, the Office of the Secretary of Defense has
begun reviewing these draft implementation plans, but has not established a
date for when the plans should be finalized.
The Department's plan submitted to the Congress in September 1999 contained
18 proposed actions to correct the lack of visibility over shipped
inventory. Originally, 7 of the 18 proposed actions were to be completed by
June 2000, and the remaining 11 proposed actions had no specified completion
date or were scheduled to be complete between fiscal year 2001 and 2006.
While some progress has been made for the seven actions scheduled to be
complete by June 2000, the Department has experienced delays and some
milestones have slipped. As of June 2000, the Department had completed only
one of these seven actions. The milestones for the remaining 11 actions have
also slipped, and some of the revised milestones may slip even more as the
implementation continues. For example, one of the primary Defense- wide
information systems being developed to better control shipped inventory has
been delayed due to funding shortfalls and delays in development.
We are recommending that the Department of Defense take several actions to
improve the quality of the draft implementation plans. In its written
comments on a draft of this report, the Department agreed with the
underlying message of the report that visibility over items being shipped
must be improved. The Department agreed with our recommendation to include
coordination procedures in the implementation plans, and generally agreed
with the remaining three recommendations. Based on the Department's
comments, we modified two of those recommendations to reflect the
Department's points that the military services and commands- not the Office
of the Secretary of Defense- should finalize the draft implementation plans
and measure the effectiveness of corrective actions taken. The Department
disagreed with part of one of our recommendations, commenting that it is not
feasible for it to develop a Defense- wide plan for monitoring the
implementation of the six plans. We disagree and believe that such a
Defense- wide plan is feasible and necessary to ensure consistent
implementation throughout the Department. Such a plan should contain a
formalized management framework outlining how the Department will oversee
the completion of the individual plans and monitor their implementation.
Background The Department of Defense's (DOD) inventory includes end items
and secondary items. End items are major equipment items such as ships,
tanks, and aircraft. Secondary items include spare parts, clothing, medical
supplies, and other such items to support DOD operating forces worldwide.
Inventory being transported between two locations typically involves the
following types of material:
Warehoused material: inventory redistributed between storage activities,
items needing repair that are shipped from consolidation points to a
commercial or other military repair facility, and inventory returned from a
commercial or other military repair facility or an end user. Purchased
material: new inventory shipped from a commercial source
to a storage activity. End- user material: inventory ordered from a storage
activity or
commercial source by a unit that expects to use it. Since 1990, our office
has considered DOD inventory management a high- risk area because its
inventory management systems and procedures are ineffective. The lack of
control 2 over inventory shipments and the resulting vulnerability of
inventory to undetected loss and theft have been
major areas of concern. The lack of adequate controls over inventory
shipments could substantially increase the risk that millions of dollars
will be spent unnecessarily for new procurement. For example, we reported in
June 2000 that our analysis of available logistics and accounting records
indicated that the Army could not account for about $900 million in shipped
inventory in fiscal year 1998. 3 In March 1999, we reported that the Navy
was unable to account for over $3 billion in inventory shipments during
fiscal years 1996 through 1998. 4
Because DOD had not fully corrected internal control weaknesses regarding
shipped inventory, section 349 of the Strom Thurmond National Defense
Authorization Act for Fiscal Year 1999 required DOD to submit a
comprehensive plan to the Congress addressing how it will ensure visibility
over shipments of all end items and secondary items. The statute requires
that the plan address (1) the specific mechanisms to be used to enable DOD
to identify at any time the quantity and location of all end items and (2)
the following three specific concerns regarding the management of secondary
items:
vulnerability of in- transit secondary items to loss through fraud, waste,
and abuse; loss of oversight of in- transit secondary items, including any
loss of
oversight when items are being transported by commercial carriers; and loss
of accountability for in- transit secondary items due to a delay of
delivery of the items or a lack of notification of a delivery of items. We
reported in February 2000 that DOD's September 1999 plan lacked some key
management elements necessary for achieving effective implementation or for
appropriate congressional oversight. Specifically, we reported that the plan
lacked detail in defining
specific actions that include steps for achieving goals needed to address
underlying problems in controls over shipped inventories;
2 DOD uses the term “visibility” to describe its ability to
track the identity, status, and location of items being shipped from one
location to another. 3 Defense Inventory: Army Needs to Strengthen and
Follow Procedures to Control Shipped Items( GAO/ NSIAD- 00- 109, June 23,
2000).
4 Defense Inventory: Navy's Procedures for Controlling In- Transit Items Are
Not Being Followed( GAO/ NSIAD- 99- 61, Mar. 31, 1999).
results- oriented objectives that are directly linked to the actions;
performance measures that include clearly stated performance targets,
information on the use of baseline data, and benchmarks (i. e., interim
measures) for monitoring progress; specific schedules that include
completion dates and interim milestones
for actions that are long term; accountability within DOD and the military
services for implementing
actions; and resources required, including an estimated annual cost, for
implementing each action. In its comments to that report, the Department
stated that it would prepare detailed implementation plans that would
include the information we recommended.
As of June 2000, the four military services, the Defense Logistics Agency,
and the U. S. Transportation Command had drafted individual implementation
plans and submitted them to the Office of the Secretary of Defense for
review. The Department, however, has not established a date for finalizing
the six plans.
Opportunities Exist to In reviewing the six draft implementation plans
concurrently with the
Improve the Draft Office of the Secretary of Defense, we found that they are
a significant
improvement over DOD's original September 1999 plan and provide more
Implementation Plans
specific actions, objectives, performance measures, and milestones as well
as a more complete description of the accountability for implementing the
actions and the resources required. However, these plans contain several
weaknesses that could limit their effectiveness. Specifically, the six draft
implementation plans are not consistent with each other in terms of content
and some of the plans are more thorough in defining the specific corrective
actions. In addition, the plans do not address how the services and commands
will coordinate with each other on implementing Defense- wide initiatives.
Further, while performance measures have improved, the plans still lack
detailed performance measures for monitoring progress and verifying the
effectiveness of the corrective actions. Some of the plans lack specific
corrective actions and simply state that the service or command will further
study the issues and will identify corrective actions at an unspecified
later date. In fact, many of the actions identified in the plans are
scheduled for completion several years from now. For example, these plans
provide an estimated completion date of fiscal year 2005 for bringing
management information systems into
compliance with the Chief Financial Officers Act. Because many of these
actions will not be completed in the near future, it is unclear whether
DOD's long- term proposed actions will effectively address all the
deficiencies identified in our February 2000 report, including the necessary
steps to ensure that effective data sharing will take place among DOD's
various functional areas and correct the existing errors in systems relied
on to manage inventory shipments. Table 1 identifies the extent to which the
six implementation plans address each of the key management elements
discussed in our February 2000 report.
Table 1: GAO Analysis of Key Management Elements Included in the
Implementation Plans Resultsoriented Schedules
Resources and Specific
Performance and
Accountability for annual cost
Implementation actions
objectives measures
milestones implementation
estimates plan
included included
included included
defined identified
Navy Yes Yes Partially b Yes Yes Yes Army Yes Yes Partially b Yes Yes Yes
Marine Corps Yes Yes Partially b Yes Yes Yes Air Force Partially a Yes
Partially b Yes Yes Yes Defense Logistics
Yes Yes Partially b Yes Yes Yes Agency U. S. Transportation
Yes Yes Partially b Yes Yes Yes Command a Some specific corrective actions
are included in the Air Force draft plan. Other corrective actions will
be identified at a later date based on the results of a series of ongoing
reviews by the Air Force Audit Agency. b Although all six draft plans
provide performance measures, these performance measures could be
more specific to ensure effective implementation. Source: GAO analysis.
The sections below provide our observations regarding each of the six draft
implementation plans.
Navy Draft Implementation The Navy's draft implementation plan is the most
comprehensive of the six
Plan Lacks Detailed draft plans. Because the Navy has been working to
address the deficiencies
identified in our March 1999 report, 5 it has had a better awareness of the
Performance Measures
weaknesses in managing items being shipped and more time to address these
weaknesses than the other services, the Defense Logistics Agency, or the U.
S. Transportation Command. The Navy's draft plan includes a detailed
description of the specific corrective actions to be taken, Navy commands
and offices responsible for the actions, milestones for completing the
actions, and resources required to implement the actions. However, the
Navy's plan lacks detailed performance measures in some cases to identify
how improvements will be measured and monitored to verify the effectiveness
of the corrective actions. For example, the performance measure for one of
the Navy's initiatives to upgrade a system used to track naval aviation
support equipment is to attain 100 percent visibility over the assets
reflected in the system. This performance measure, however, does not
identify how the Navy will measure the level of visibility it has over these
items or verify the level of visibility this system provides.
Army Draft Implementation The Army's draft implementation plan contains
specific actions for
Plan Lacks Specific correcting its lack of control over shipped inventory
and defines the offices
Performance Measures responsible for completing the actions as well as
completion milestones.
However, the plan lacks specific performance measures to identify how the
Army will measure progress or determine whether the actions, after they have
been implemented, have corrected the lack of visibility over items being
shipped. For example, one planned action in the Army's draft plan is for the
Army to adopt the Navy's Commercial Asset Visibility II Program 6 to account
for and track shipments of material to and from commercial repair
facilities. The performance measure contained in the plan related to this
action only identifies the purpose of this system. A more useful, results-
oriented performance measure, however, would indicate how the Army would
measure the success of this program after the system is available for use at
Army facilities. Also, the plan does not identify how the Army will
coordinate with the U. S. Transportation Command and the other
5 Defense Inventory: Navy's Procedures for Controlling In- Transit Items Are
Not Being Followed( GAO/ NSIAD- 99- 61, Mar. 31, 1999). 6 The Commercial
Asset Visibility System II was originally developed by the Navy to manage
and report the status of repaired material at commercial activities.
services in the development of a new DOD- wide transportation control system
called the Transportation Coordinator Automated Information for Movement
System II. The Army is the lead agency on developing this system but is
relying heavily on the U. S. Transportation Command for the initial work on
standards and specifications. The implementation of this system will require
extensive coordination among the services and the U. S. Transportation
Command. The Army indicated in its implementation plan that the fielding of
this system will be delayed because of funding shortfalls and problems
identified during development.
Marine Corps Draft The Marine Corps' draft implementation plan lacks detail
regarding how
Implementation Plan Lacks the Marine Corps intends to monitor the progress
and determine the
Measures for Monitoring effectiveness of its actions. For example, the
Marine Corp plan includes
Progress three actions to improve the visibility over end items in shipment.
These
actions, which the Marine Corps expects to complete by September 2005,
relate to the incremental fielding of a new management information system
throughout the Marine Corps. The plan, however, does not identify how the
Marine Corps will assess the effectiveness of this system or the interim
steps the Marine Corps will follow to ensure that the fielding of this
system remains on schedule.
Air Force Draft While the Air Force draft implementation plan contains a few
specific
Implementation Plan Lacks planned actions, the primary action it has
instituted is to task the Air Force
Specific Corrective Actions Audit Agency to conduct a thorough review of its
control over shipped
inventory at all supply levels throughout the Air Force. Air Force officials
said that the Air Force plans to use the results of these reviews to more
specifically define the corrective actions needed, milestones for completing
these actions, the appropriate performance measures for monitoring progress,
and the required resources. According to these officials, until the Air
Force Audit Agency completes its reviews, they are unable to define the
specific actions needed. Air Force Audit Agency officials stated that they
plan to complete their reviews by December 2001. In the interim, the Air
Force plans to continue the upgrade and replacement of some of its major
inventory information systems and to bring their financial management
information systems into full compliance with the Chief Financial Officers
Act by September 2003 with quarterly updates to the Air Force Comptroller.
Defense Logistics Agency While the Defense Logistics Agency's draft
implementation plan identifies
Draft Implementation Plan specific actions and milestones, it does not
define the performance
Lacks Procedures for measures it will use to assess the effectiveness of its
corrective actions
Measuring Effectiveness over time. Because this agency is the Defense- wide
command responsible
for the distribution and storage of DOD's secondary items, its customers are
the military services. As a result, the effectiveness of its actions will
depend largely on how well they serve the needs of the services and how well
they are implemented by the services. Consequently, the Defense Logistics
Agency will need to coordinate closely with the services to determine the
effectiveness of its actions. Its plan, however, does not address this
coordination process or identify how the agency intends to work with the
services to implement its planned actions.
U. S. Transportation The U. S. Transportation Command has begun a number of
significant
Command Draft initiatives to improve the visibility over inventory while it
is in the Defense
Implementation Plan Lacks transportation network, but its draft
implementation plan lacks adequate
Adequate Performance results- oriented performance measures to monitor
progress or to assess
the effectiveness of the planned actions. For example, one planned action
Measures
is to complete a direct vendor delivery pilot with a DOD pharmaceutical
vendor. The stated performance measure for this action is “successful
fielding of the various prototypes as scheduled.” This performance
measure, however, does not define “successful” or identify how
the U. S. Transportation Command will measure the success of this action. In
addition, similar to the Defense Logistics Agency's draft implementation
plan, the U. S. Transportation Command's plan will require extensive
coordination between it and the military services. The U. S. Transportation
Command's plan, however, does not include a formalized coordination process.
The success of the U. S. Transportation Command's initiatives will depend
largely on the services' implementation.
Office of the Secretary of Officials in the Office of the Secretary of
Defense have not decided how
Defense Has Not Specified they plan to review the six draft implementation
plans or how they intend
Procedures for Review and to use these plans to ensure DOD- wide
improvements in the visibility of
Oversight items being shipped. In commenting on a draft of our February 2000
report,
these officials stated in January 2000 that they would develop DOD- wide
implementation plans to address our recommendations. Subsequently, however,
these officials stated that they intend for the six individual
implementation plans to constitute the Department's plan, and do not intend
to prepare a DOD- wide implementation plan. DOD has not
established a date for finalizing the plans. The lack of a uniform, DOD-
wide implementation plan could continue the long- standing parochialism
among the military services and may hamper the implementation of Defense-
wide initiatives due to inconsistent application.
DOD Has Experienced DOD's September 1999 plan included a total of 18
proposed actions, 8 of
Delays in which related to the control over end items and the remaining 10
related to
control over secondary items. Of these 18 proposed actions, 7 were
Implementing Its 18
estimated to be complete by June 2000. While significant progress has been
Proposed Actions
made in implementing these actions, only one of these seven actions had been
implemented by June 2000. DOD has experienced delays in implementing the
other six actions and has revised the milestone schedules.
The remaining 11 actions had completion dates that extended from fiscal
years 2001 through 2006 (without any identification of interim milestones)
or were ongoing with no specific completion date identified. DOD officials
explained that the original milestones were overly optimistic and that the
revised milestones in the six implementation plans are more realistic. A
summary of the 18 proposed actions is shown in table 2. The page references
in brackets refer to the page numbers in DOD's September 1999 plan where the
actions, objectives, and completion dates are discussed.
Table 2: Summary of DOD's 18 Actions Proposed in the Plan and Milestones
Actions related to end items:
1. The Army plans to improve inventory tracking with the development of the
Global Combat Supply System (estimated completion date-fourth quarter of
fiscal year 2002). [page 2- 7] 2. The Army plans to expand the use of
advanced identification technology in its transportation systems (estimated
completion
date-ongoing). [page 2- 7] 3. The Army plans to continue improving its
Logistics Intelligence File and Logistics Integrated Database (estimated
completion
date-ongoing). [page 2- 7] 4. The Navy will continue to monitor systems that
provide end- item visibility (estimated completion date-ongoing). [page 2-
7] 5. The Air Force is revising its Combat Ammunition System to maintain
visibility of its inventory shipments (estimated completion
date-fiscal year 2006). [page 2- 8] 6. The Marine Corps plans to continue
deployment and enhancement of its Asset Tracking Logistics and Supply System
(estimated
completion date-fourth quarter of fiscal year 2002). [page 2- 8] 7. The
Marine Corps plans to develop a messaging application programming interface
that facilitates the exchange of data among the
inventory shipment systems that provide source data (estimated completion
date-fourth quarter of fiscal year 2003). [page 2- 8] 8. The Marine Corps
plans to field a final Total Asset Visibility capability that includes an
enhanced Logistics Bases Inventory Visibility
System (estimated completion date-fourth quarter of fiscal year 2004). [page
2- 8]
Actions related to secondary items:
1. Provide timely and accurate delivery information (near term: estimated
completion date-fourth quarter of fiscal year 1999; long term: estimated
completion date-ongoing initial module fielding in fiscal year 2001). [page
3- 2] 2. Strengthen oversight of shipments directly from commercial
suppliers to DOD activities (near term: estimated completion
date-fourth quarter of fiscal year 1999; short term: estimated completion
date-third quarter of fiscal year 2000). [page 3- 2] 3. Examine the adequacy
of policy, procedures, and training related to shipment documentation,
movement, and delivery, and revise as
necessary (estimated completion date-third quarter of fiscal year 2000).
[page 3- 3] 4. Complete and implement the DOD plan to integrate automatic
identification technology into DOD logistics operations (estimated
completion date-fourth quarter of fiscal year 2002). [page 3- 3] 5. Examine
the adequacy of policy, procedures, and training for receipt notification
processing and revise as necessary (estimated
completion date-third quarter of fiscal year 2000). [page 3- 5] 6. Provide
for policy and procedures that fully account for unserviceable items that
have been received at a commercial repair site
(estimated completion date-third quarter of fiscal year 2000). [ page 3- 5]
7. Implement the recommendations of the Joint Logistics Commanders' Material
Management Group task force to revise the DOD
Disposal In- Transit Control System and enhance procedures and training
(estimated completion date-ongoing; recommendations due by second quarter of
fiscal year 2000). [page 3- 5] 8. Measure the time to record a receipt and
make it visible to all requiring activities, including DOD financial and
accounting systems
(estimated completion date-fourth quarter of fiscal year 2001). [page 3- 6]
9. Bring DOD management information systems associated with shipment control
into compliance with the Chief Financial Officers Act
(estimated completion date-fiscal year 2005). [page 3- 6] 10. Improve
current discrepancy reporting and investigating for shipments between DOD
and commercial locations (near- term
estimated completion dates-third quarter of fiscal year 2000; short- term
completion date-first quarter of fiscal year 2001). [page 3- 7] Source:
DOD's in- transit visibility plan.
Officials in the Office of the Secretary of Defense have assigned
responsibility to each service, the Defense Logistics Agency, and the U. S.
Transportation Command for implementing the actions in DOD's September 1999
plan. We reviewed the six implementation plans individually to identify the
status of each of the seven proposed actions
originally scheduled to be completed by June 2000. Table 3 shows the revised
completion dates identified in the draft implementation plans for the seven
proposed actions originally scheduled to be completed by June 2000. These
revised completion dates identify the date when all of the services, the
Defense Logistics Agency, and the U. S. Transportation Command expect to
complete their work related to each action. According to DOD officials,
substantial progress has been made in implementing these actions, and some
of the services and commands will complete their work prior to the revised
completion dates shown in table 3.
Table 3: Status of Seven Actions Originally Estimated to Be Completed by
June 2000 DOD's estimated
Revised date of Action item completion date completion
1. Provide timely and accurate delivery information. September 1999 October
2000 2. Strengthen oversight of shipments directly from commercial to DOD
activities. June 2000 September 2002 3. Examine the adequacy of policy,
procedures, and training related to shipment
June 2000 March 2001 documentation, movement, and delivery. 5. Examine the
adequacy of policy, procedures, and training for receipt notification
June 2000 March 2001 processing. 6. Provide for policy and procedures that
fully account for unserviceable items
June 2000 December 2000 received at commercial repair sites. 7. Implement
the Joint Logistics Commanders Material Management Group task
Recommendations due by June 2000
force recommendations to revise the DOD Disposal In- Transit Control System
and March 2000.
Ongoing enhance procedures and training.
Implement Task Force recommendations-ongoing.
10. Improve current discrepancy reporting and investigating for shipments
between June 2000 December 2001 DOD and commercial locations. Source: GAO
analysis.
The details regarding the specific steps initiated by the military services,
the Defense Logistics Agency, and the U. S. Transportation Command for
implementing DOD's plan to improve the management of shipped inventory for
the seven actions originally estimated to be complete by June 2000 are
outlined in appendix I. As shown in table 3, DOD has completed only one of
these seven actions by June 2000. Specifically, the Joint Logistics
Commanders, Material Management Group task force developed its
recommendations to revise the DOD Disposal In- Transit Control System and
enhance procedures and training by the June 2000 completion date.
Implementation of the recommendations is ongoing. The completion dates for
the other six actions have been revised to extend beyond June 2000. For
example, DOD's plan indicated that the U. S. Transportation Command would
obtain electronic data interchange messages from 35 carriers by September
1999 for integration with the Global Transportation Network. However, the U.
S. Transportation Command's implementation plan shows that only 31 of these
carriers will be using electronic data interchange by December 2000.
For the remaining 11 actions, the Department stated in its September 1999
plan that 7 of these actions would be complete in fiscal years 2001 through
2006. The other 4 of these 11 actions are ongoing, with no specific
completion date provided. We found, however, that the six implementation
plans indicate that these original completion dates will not be met. For
example, the Army has encountered delays in developing the Transportation
Coordinator Automated Information for Movement System II. This system is
intended to provide automation support to warfighters during deployment,
sustainment, and redeployment operations, and to provide source data to
strategic command and control systems to increase the visibility of in-
transit personnel and items during those operations. The Army does not
expect to complete the fielding of this system until September 2007. In
addition, system fielding could be further delayed because of a reported
critical $22. 7 million unfunded software development requirement.
Conclusions The six draft implementation plans prepared by the four military
services, the Defense Logistics Agency, and the U. S. Transportation Command
are
generally responsive to the findings and recommendations in our February
2000 report regarding DOD's plan to improve the visibility over inventory
being shipped. These plans, however, do not contain detailed performance
measures to ensure effective implementation and do not reflect a coordinated
DOD- wide approach. We are aware that the Office of the Secretary of Defense
will be reviewing these draft plans and that additional changes and
revisions are expected. The success of these plans will depend largely on
the extent to which the corrective actions are implemented consistently
throughout the Department. We are concerned that the lack of a uniform, DOD-
wide implementation plan will continue the long- standing parochialism
within the military services regarding their policies and procedures for
managing inventory. The Department's strategy to have each service, the
Defense Logistics Agency, and the U. S. Transportation Command prepare and
implement their own implementation plans without preparing a uniform DOD-
wide implementation plan may also lead to
inadequate oversight and inconsistent application of Defense- wide
initiatives.
DOD has experienced delays in implementing the corrective actions outlined
in the Department's September 1999 plan. Of the original 18 corrective
actions contained in the September 1999 plan, 7 were expected to be
completed by June 2000. More recent information from the draft
implementation plans, however, indicates that only one of these actions will
be completed as scheduled.
Recommendations for To achieve DOD- wide improvements in the Department's
control over
Executive Action inventory shipments, we recommend that the Secretary of
Defense direct
the Under Secretary of Defense for Acquisition and Technology to take the
following actions:
Complete the review of the six draft implementation plans prepared by the
four services, the Defense Logistics Agency, and the U. S. Transportation
Command so that these plans can be finalized. Require that these plans (1)
contain detailed performance measures to
allow the services and commands to assess the effectiveness of the
corrective actions and (2) represent a coordinated and uniform DOD- wide
approach to correcting the long- standing lack of visibility over inventory
being shipped. Require that, for those corrective actions that involve more
than one
service or command, the implementation plans include appropriate
coordination procedures, specifically addressing the role of each service or
command as it relates to implementing each corrective action. Prepare a DOD-
wide implementation plan to identify how the Office of
the Secretary of Defense will (1) verify consistent implementation of the
corrective actions throughout the Department and (2) oversee the
implementation of the individual actions proposed by the services, the
Defense Logistics Agency, and the U. S. Transportation Command.
Agency Comments and We received written comments from the Department of
Defense, which are
Our Evaluation reprinted in appendix II. The Department agreed with the
underlying
message of our report that visibility over items being shipped must be
improved. The Department further stated in its comments that it will ensure
that the actions in the plans are completed and that DOD components are
working together toward a common goal of visibility over
these assets. DOD agreed with our recommendation that the implementation
plans should include appropriate coordination procedures for actions
involving more than one service or command. However, DOD did not fully agree
with our remaining three recommendations related to the Office of the
Secretary of Defense's role in finalizing the plans and monitoring their
implementation. Our specific comments regarding DOD's response to these
three recommendations are discussed below.
DOD agreed with our recommendation that the Department review the six draft
implementation plans, but did not agree that the Department should be
responsible for finalizing these plans. DOD believes that this
responsibility should rest with the appropriate services and commands. We
agree that it would be more appropriate for the services and commands to
finalize these plans, and have modified our recommendation accordingly.
DOD agreed with our recommendation that the implementation plans should
contain detailed performance measures to ensure successful completion, but
did not agree that the Office of the Secretary of Defense should assess the
effectiveness of the corrective actions in relation to these measures. DOD
stated that the Department will measure the effectiveness of the six
implementation plans through the metrics outlined in DOD's Logistics
Strategic Plan, but that the development and monitoring of more detailed
performance measures in the individual implementation plans should be the
responsibility of the appropriate services and commands. We agree that each
service and command should be responsible for measuring the effectiveness of
the corrective actions in their individual plans and have modified our
recommendation accordingly.
DOD agreed with our recommendation that the Department oversee the
implementation of the individual corrective actions to ensure consistency,
but stated that it is not feasible to prepare a DOD- wide plan to identify
how they will monitor the successful implementation of the individual plans.
The intent of our recommendation was that DOD develop a more formalized
management framework to specifically define how the Department will oversee
the completion of the individual plans and monitor their implementation.
Therefore, we believe that such a DOD- wide plan is feasible and necessary.
This plan should include a formal approach outlining the specific steps,
milestones, and measurements DOD will use to ensure that the goal of
visibility over items being shipped is achieved and that the services and
commands are working together toward this goal.
Scope and Our analysis of DOD's implementation of its September 1999 plan to
Methodology improve the visibility over items being shipped was based on the
requirements of section 349 of the Strom Thurmond National Defense
Authorization Act for Fiscal Year 1999 (P. L. 105- 261), information
contained in the implementation plans, discussions with DOD officials, and
our prior work regarding DOD's control over its inventory shipments.
Specifically, to ascertain the extent to which the implementation plans
address the requirements in the statute and the recommendations in our
February 2000 report, we compared the plans to each of the key requirements
set forth in the statute and to the findings and recommendations in our
report.
To determine whether the plans contain an appropriate management framework
for implementation, we used the requirements of the Government Performance
and Results Act, commonly referred to as the Results Act. This act offers a
model for developing an effective management framework to improve the
likelihood of successfully implementing initiatives and assessing results.
Although section 349 did not require that DOD's plan conform to the Results
Act, congressional reports and administrative guidance regarding the Results
Act indicate that activities such as inventory management should be subject
to these results- oriented principles.
To determine the status of the 18 actions DOD identified in its September
1999 plan, we reviewed the six draft implementation plans prepared by the
services, the Defense Logistics Agency, and the U. S. Transportation
Command. From these draft plans, we identified the dates that the services
and commands expect to complete each of the 18 actions.
We conducted our review from May 2000 through October 2000 in accordance
with generally accepted government auditing standards.
We are sending copies of this report to the appropriate congressional
committees; the Honorable William Cohen, Secretary of Defense; the Honorable
Louis Caldera, Secretary of the Army; the Honorable Richard Danzig,
Secretary of the Navy; the Honorable F. Whitten Peters, Secretary of the Air
Force; General James L. Jones, Commandant of the Marine Corps; Lieutenant
General Henry T. Glisson, Director, Defense Logistics Agency; General
Charles T. Robertson, Jr., Commander in Chief, U. S. Transportation Command;
and the Honorable Jacob Lew, Director, Office of Management and Budget.
If you or your staff have any questions regarding this report, please
contact me at (202) 512- 8412. GAO contacts and key contributors to this
report were listed in appendix III.
David R. Warren, Director Defense Capabilities and Management
List of Congressional Committees
The Honorable John Warner Chairman The Honorable Carl Levin Ranking Minority
Member Committee on Armed Services United States Senate
The Honorable Floyd Spence Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives
The Honorable Ted Stevens Chairman The Honorable Daniel Inouye Ranking
Minority Member Subcommittee on Defense Committee on Appropriations United
States Senate
The Honorable Jerry Lewis Chairman The Honorable John Murtha Ranking
Minority Member Subcommittee on Defense Committee on Appropriations House of
Representatives
Appendi xes Status of DOD's Actions Regarding Secondary
Appendi xI
Items This appendix provides the status of 7 of DOD's 18 proposed actions to
address the lack of control over secondary items being shipped (e. g., spare
parts, clothing, and medical supplies). These seven actions were scheduled
for completion by June 2000.
DOD's actions for secondary items are detailed in its plan by the following
problem areas specified in the statute:
the loss of oversight of secondary items, including any loss of oversight
when items are being transported by commercial carriers; the loss of
accountability for secondary items due to either a delay of
delivery of the items or a lack of notification of a delivery of the items;
and the vulnerability of secondary items to loss through fraud, waste, and
abuse. The action item numbers and page references in brackets correspond to
DOD's September 1999 plan where the seven actions and objectives are
discussed. Table 2 of this report provides a detailed listing of DOD's 18
proposed actions.
Loss of Oversight for Action 1: Provide timely and accurate delivery
information by the following
Secondary Items times:
Near term: obtain carrier electronic data interchange messages. [page 3- 2]
Objectives: For the near- term action, the goal is for 28 air, motor, and
rail carriers
and 7 ocean carriers to submit electronic data interchange status messages
(estimated completion date- fourth quarter of fiscal year 1999). [page 3- 2]
GAO Analysis: The U. S. Transportation Command is incorporating commercial
electronic data interchange information into the Global Transportation
Network System to provide the status of DOD material. In return, the
system's operator is entering into data exchange agreements with commercial
carriers transporting DOD material. Significant progress has been made to
obtain positive receipt confirmation for the 35 carriers scheduled to use
Electronic Data Interchange information. Of these, 27 carriers are using
Electronic Data Interchange status messages for integration with the Global
Transportation Network. The U. S. Transportation Command plans to have four
more carriers integrated with the Global Transportation Network by September
2000.
The Army has encountered delays in the development of the Transportation
Coordinator Automated Information for Movement System II (TC- AIMS II). This
system is intended to provide automation support to warfighters during
deployment, sustainment, and redeployment operations, and to provide source
data to strategic command and control systems to increase the visibility of
in- transit personnel and items during those operations. Authority to begin
initial fielding of the unit movement portion of the TC- AIMS II system is
scheduled for October 2000. Fielding of the TC- AIMS II system is now
expected to be completed by September 2007. A critical $22.7 million
unfunded software requirement exists that could further delay the completion
of this project.
Action 2: Strengthen oversight of shipments directly from commercial
suppliers to DOD activities by
developing a vendor in- transit implementation plan that identifies
schedules and milestones for fielding in- transit techniques for vendors
that perform direct deliveries (estimated completion- fourth quarter of
fiscal year 1999) and completing the direct vendor delivery pilot with a DOD
pharmaceutical
vendor to provide the Global Transportation Network information via
electronic data interchange (estimated completion- third quarter of fiscal
year 2000). [page 3- 2]
Objective: Ensure visibility of direct shipments from commercial sources to
DOD
consignees, including items in- transit to and from contractor repair
facilities. [page 3- 3]
GAO Analysis: The U. S. Transportation Command performed an initial
assessment of size and expected growth of direct vendor delivery shipments
in fiscal year 1999. Based on the results of this assessment, vendor in-
transit
implementation plans are being developed. However, a comprehensive
implementation plan, including schedules and milestones, will not be
developed until September 2002 instead of June 2000, as originally
scheduled. This delay resulted from the fact that the original assessment
highlighted the need to expand the medical prototype efforts to subsistence
and repair parts.
Additionally, in October 1998, the U. S. Transportation Command initiated a
direct vendor delivery prototype with a pharmaceutical vendor to provide the
Global Transportation Network with Electronic Data Interchange information.
The operational testing phase of this program was completed in June 2000.
The Defense Logistics Agency partnered with the Transportation Command to
expand the pharmaceutical pilot to a medical and subsistence prototype and a
repair parts prototype. The medical and subsistence prototype is expected to
be complete in June 2001, and the repair parts prototype in December 2001.
Action 3: Examine the adequacy of policy, procedures, and training related
to shipment documentation, movement, and delivery and revise as necessary
(estimated completion date- third quarter of fiscal year 2000). [page 3- 3]
Objectives: Ensure that shippers, carriers, and consignees are in full
compliance
with policy and procedures related to shipment documentation, movement, and
delivery. [page 3- 3] Ensure timely and accurate information from shippers,
carriers, and
consignees. [page 3- 3] GAO Analysis: The U. S. Transportation Command
submitted changes addressing roles and responsibilities for 5 of 15
identified joint publications regarding adequacy of policies and procedures,
as of March 2000. Also, the U. S. Transportation Command has initiated an
action to merge the Military Standard Transportation and Movement Procedures
into the Defense Transportation Regulation. They expect to complete this
action by September 2000.
The Defense Logistics Agency states that no further action is required
because its Defense Distribution Center conducts on- going site visits at
the depots, carriers' terminals, and customer sites to ensure policies,
regulations and automated technologies are adequate, as well as to review
summary level Supply Discrepancy Report analyses.
The Army has initiated actions to improve compliance with existing policies.
In addition, a major review of logistics policy to ensure that logistic
policy supports the logistics system modernization efforts is scheduled to
be completed by November 2001. In the interim, the Army created a task force
in July 2000 to review the Army Material Returns process and policy. In
addition, action is under way to provide the Recovery Improvement Program
Reporting System as a web- based product to improve compliance with policy
by December 2000.
The Air Force Audit Agency plans to complete a series of management advisory
services by March 2001 to assess transportation policies and procedures for
receiving material, reporting transportation discrepancies, and complying
with shipment delivery acknowledgment procedures. The Air Force also plans
to evaluate existing training and documentation by March 2001.
In a joint effort, the Navy and the Defense Logistics Agency conducted a
baseline process review in February 1999 and identified numerous problem
areas and weaknesses in the current system. Instances where policy and
procedures were not being followed or clearly understood were documented,
and 30- plus action items were assigned. As a result, an In- Transit Process
Team was established in October 1999 to reengineer business processes. Also
an agreement was made between Navy and the Defense Logistics Agency to meet
regularly and monitor progress. This includes efforts to cross train Navy
and Defense Logistics Agency personnel on unique processes and procedures.
The Marine Corps believes its current procedures are adequate. However, it
plans to deploy the Product Data Reporting and Evaluation Program
information system to automate manual procedures by September 2000.
Loss of Accountability for Action 5: Examine the adequacy of policy,
procedures, and training for
Secondary Items receipt notification processing and revise as necessary
(estimated
completion date- third quarter of fiscal year 2000). [page 3- 5]
Objectives: Ensure that consignees are in full compliance with receipt
acknowledgment policies and procedures. [page 3- 5] Reconcile system and
system interface problems that deter receipt
acknowledgment. [page 3- 5] Ensure proper financial accountability of
receipts. [page 3- 5]
GAO Analysis: The U. S. Transportation Command has no direct role in the
supply receipt notification process. However, by September 2000 it plans to
review the quality of the various Global Transportation Network source data
systems, including electronic data interchange, that report transportation
delivery information.
The Defense Logistics Agency is currently working through the Defense
Logistics Management System Supply Process Review Committee to ensure actual
quantity received is reported and that the military service integrated
material manager generates a material receipt acknowledgement upon receipt
notification. This action was originally estimated to be completed by June
2000. However, according to the latest estimate in the Defense Logistics
Agency's plan, this action will not be complete until September 2000.
The Defense Distribution Center conducted an in- depth review of the Defense
Logistics Agency receiving process in fiscal year 1999 and found
distribution depots are performing proper actions associated with material
receipt.
The Army has taken steps toward implementing this action, but did not meet
the June 2000 deadline. The Army created a task force in July 2000 to review
the Army material returns process and policy. In addition, the Army plans to
(1) prepare a system Engineering Change Proposal to implement the DOD
standard pseudo receipt process in the Army Retail Systems by September 2000
and (2) provide a web- based Army Recovery Improvement Program Reporting
System by December 2000.
The Air Force will not meet DOD's original estimated completion date of June
2000, and it has provided revised milestone dates based on the work being
done by the Air Force Audit Agency. The Air Force Audit Agency has been
tasked to perform a series of management advisory services to assess
the adequacy of transportation and supply policies and procedures for
acknowledging material receipts and the adequacy of existing training and
documentation by March 2001. Also, the Air Force is in the process of
implementing recommendations resulting from the review of wholesale receipt
processing at Defense Logistics Agency distribution depots collocated with
Air Logistics Centers. The estimated completion date is to be determined.
The Navy has examined its policies and procedures, but training for the
reengineered receipt notification process was not completed by June 2000.
The Navy conducted a 1- month joint baseline process review with the Defense
Logistics Agency during February and March 1999. Numerous problem areas and
weaknesses were identified in the current system. Policy and procedural
weaknesses were also identified. Instances where policy and procedures were
not being followed or clearly understood were documented and 30- plus action
items assigned. As a result, an In- Transit Process Team was formed in
August 1999 and detailed business rules were established. In January 2000, a
reengineered system design team was formed to develop software to implement
the reengineered process. Training and implementation of the reengineered
process is scheduled for October 2000.
There is no evidence that the Marine Corps has examined the adequacy of its
policy, procedures, and training for receipt notification. The Marine Corps
states that its existing policy is to trace lost shipments of material and
to take every necessary action to trace a lost shipment. However, the other
stated actions in the Marine Corps' plan are not directly related to
examining the adequacy of its policy, procedures, and training for receipt
notification processing. For example, the Marine Corps is working jointly
with Air Force and Navy program managers to analyze the compliance
requirements in the Chief Financial Officers Act to be able to show full
accountability of logistics actions (receipt, issue, inventory, and
disposal) for material. However, bringing management information systems
into compliance with the Chief Financial Officers Act is a separate long-
term action in the DOD plan. The Marine Corps plan also states it is working
on fielding the Commercial Asset Visibility II system; however, this system
is meant to track assets moving to and from commercial repair facilities and
does not properly address this action.
Action 6: Provide for policy and procedures that fully account for
unserviceable items that have been received at a commercial repair site
(estimated completion date- third quarter of fiscal year 2000). [page 3- 5]
Objective: Maintain proper accountability of unserviceable assets shipped to
commercial facilities for repair. [page 3- 5] GAO Analysis: The actions the
Army is taking to address this item will not be completed by the scheduled
June 2000 date. The Army plans to deploy the Commercial Asset Visibility
System II to account for and track shipments of material by September 2000.
In its plan, the Army states that the deployment of this system will provide
improvements for receipt, issue, induction into the repair process, and
inventory control for reparable items being processed. This system will also
eliminate a weakness that occurs when commercial repair activities are not
required to report receipts or are unable to report in a timely manner.
However, it is still unclear how the Army plans to provide policy and
procedures to ensure accountability.
The Air Force is currently evaluating approved regulation changes that
govern accountability during movement of material to repair activities. The
Air Force is working with a Joint Group on Material Management to resolve
the visibility and reporting of material repaired under depot maintenance
inter- service agreements. Further, the Air Force reported that their
commercial repair tracking process is undergoing modernization, which should
be completed by December 2001. The modernized system will include subsidiary
ledger and system interfaces to appropriately account for in- transit assets
repaired at commercial activities and is expected to be compliant with the
Chief Financial Officers Act.
The Navy expects to complete its ongoing actions in December 2000. This is 6
months past the scheduled DOD due date. According to the Navy's plan, a
program was implemented in October 1999 to enhance shipped material
visibility and tracking from commercial activities. Also, an In- transit
Process Team has been established to reengineer the inventory management
process to improve control of shipped items.
The Marine Corps plan does not outline any specific revisions to its
policies and procedures for unserviceable items shipped to commercial repair
facilities. In its plan, the Marine Corps' states that it will modify its
systems for tracking shipments of unserviceable items to and from the depot.
These modifications, however, will not meet the June 2000 deadline stated in
DOD's plan. The Marine Corps uses interim programs to track shipments of
unserviceable items to and from commercial depots until a direct link to the
Global Transportation Network can be established. Once the Asset Tracking
Logistics and Supply System, Version II+, is fielded the Marine Corps
expects to have visibility of unserviceable items being shipped. The initial
deployment of this system is scheduled for September 2000.
Action 7: Implement the recommendations of the Joint Logistics Commanders'
Material Management Group task force to revise the DOD Disposal In- Transit
Control System and enhance associated procedures and training (estimated
completion- ongoing; recommendations due by second quarter of fiscal year
2000). [page 3- 5]
Objectives: Ensure visibility of items shipped to disposal. [page 3- 5]
Ensure the proper documentation of shipments of controlled items to
disposal. [page 3- 5] GAO Analysis: The Defense Logistics Agency had the
lead responsibility for implementing this action. The recommendations of the
Joint Logistics Commander's Material Management Group task force were
completed in June 2000, and are currently being implemented through DOD. The
Defense Logistics Agency developed a proposed military regulation change to
improve procedures to prevent invalid records and identify follow- up
transactions. The Defense Logistics Service Center and the Army Logistics
Management College also created a new web- site to provide training on the
key management information system for excess property moving to disposal.
This site is also expected to assist in scheduling training. These actions
were completed in June 2000. DLA is planning further actions to modify the
validation criteria and review the impact of these changes on disposal
shipment transactions.
The U. S. Transportation Command notes that this action does not apply
because this command is not directly involved in the disposal process.
The Army has no direct role for this action because it is not the office of
primary responsibility. However, it plans to review its policies for
compliance with Defense Logistics Agency programmed changes by October 2000.
The Air Force has no direct role for this action because it is not the
office of primary responsibility. The Air Force is currently evaluating the
need for further training and has concurred with a proposed DOD regulation
change. After this change is approved through the Department, the Air Force
plans to take action to determine the cost and schedule for developing and
fielding related retail software changes.
The Navy's plan states that although this action item is being initiated by
the Defense Logistics Agency, it directed its commands in March 2000 to
review the procedures for sending material disposal and conduct related
training in an effort to improve the Navy's disposal program.
The Marine Corps plan does not address any specific actions for addressing
the overall action item because the Defense Logistics Agency has primary
responsibility.
Vulnerability of Secondary Action 10: Improve current in- transit
discrepancy reporting and
Items to Loss Through investigating for shipments between DOD locations and
between
Fraud, Waste, and Abuse commercial and DOD locations. [page 3- 7]
Examine the effectiveness and efficiency of current procedures and systems
for discrepancy reporting and make necessary changes. (estimated completion
date - third quarter of fiscal year 2000). [page 3- 7]
Objective: Ensure that discrepancies in item, quantity, and location are
reported
and investigated in accordance with established policies and procedures.
[page 3- 8]
GAO Analysis: The U. S. Transportation Command established a joint service
work group in November 1998 to examine transportation discrepancy reporting
processes. This work group conducted a comprehensive review that resulted in
45 recommendations for changes to transportation discrepancy reporting
procedures. Of these, seven were completed in fiscal year 1999. An
additional 13 actions were under way as of March 2000, and other ongoing
actions have expected completion dates through fiscal year 2001. Also, an
on- line discrepancy report capability, including a training module,
was implemented in fiscal year 1999. The U. S. Transportation Command
expects to complete the enhancements to the discrepancy monitoring program
by August 2000.
The Defense Logistics Agency Defense Distribution Center has developed a
Research and Processing Guide to assist depots in researching, analyzing,
and responding to customer shipment discrepancy reports. The Defense
Logistics Agency is implementing several initiatives to improve current
discrepancy reporting and investigation.
The Army has an ongoing program with the Defense Logistics Agency to measure
all segments of the material- receiving program. Also, the Army plans to
improve its reporting by standardizing and extending its Electronic Tracking
Program. The Army expects to develop and program resources to support this
expansion by October 2000.
The Air Force Audit Agency recently completed a review of its policy and
procedures in reporting supply discrepancies. As a result, the Air Force
plans to modify its regulations by December 2001 to correct inconsistencies.
Also, a training package is being developed for incorporation into supply
and transportation entry- level courses for all major commands and retail
activities.
The Navy will not meet DOD's estimated June 2000 completion date. According
to the Navy's plan, this action will be completed by November 2000. To
address this action, the Navy is working jointly with the Defense Logistics
Management Support Office to develop interfaces between existing and future
supply discrepancy reporting systems. As a result, short- term fixes to
existing systems were identified in March and April 1999 to improve
automation and visibility. The Navy implemented changes to improve the
interface between their in- transit tracking and discrepancy follow- up
systems in November 1999. As part of the Navy's reengineered process to be
implemented by November 2000, the Navy is developing a web- based Supply
Discrepancy Reporting system which will provide users the on- line
capability to enter discrepancy data, pass this data to other activities,
and return resolution information to the initiator of the supply discrepancy
report. The Navy identified, however, that extracting the transportation
information has been more difficult than expected, and stated that it may
not be possible to effectively generate the percent of transportation
discrepancies resolved until further system planning is conducted.
According to the Marine Corps' plan, the Marine Corps' Product Data
Reporting and Evaluation Program was scheduled for fielding in June 2000.
This program is an automated information system designed to automate the
manual process of ordering, screening, and investigating discrepancies.
Appendi xII
Comments From the Department of Defense Note: GAO comment supplementing
those in the report text appear at the end of this appendix.
See comment 1.
The following is GAO's comment on DOD's letter dated October 11, 2000. GAO
Comment 1. During our review, Department of Defense officials insisted that
we
treat the six implementation plans as drafts and refer to them in our report
as such. Therefore, we refer to these plans as drafts throughout the report.
In its comments, the Department states that, while the plans are living
documents as opposed to drafts, it agrees that the services and commands
need to complete the plans.
Appendi xI II
GAO Contacts and Staff Acknowledgments GAO Contacts Charles I. Patton, Jr.
(202) 512- 4412 Lawson Gist, Jr. (202) 512- 4478 Acknowledgments In addition
to the above contacts, David Schmitt, Patricia Blowe, Lauren
Johnson, and Susan Woodward made key contributions to this report.
Related GAO Products Defense Inventory: Army Needs to Strengthen and Follow
Procedures to Control Shipped Items( GAO/ NSIAD- 00- 109, June 23, 2000).
Inventory Management: Better Controls Needed to Prevent Misuse of Excess DOD
Property( GAO/ OSI/ NSIAD- 00- 147, Apr. 28, 2000).
Department of the Navy: Breakdown of In- Transit Inventory Process Leaves It
Vulnerable to Fraud( GAO/ OSI/ NSIAD- 00- 61, Feb. 2, 2000).
Defense Inventory: Plan to Improve Management of Shipped Inventory Should Be
Strengthened( GAO/ NSIAD- 00- 39, Feb. 22, 2000).
Defense Inventory: Inadequate Compliance With Controls for Excess Firearms
and Other Sensitive Items( GAO/ NSIAD- 00- 27, Nov. 29, 1999).
Defense Inventory: Property Being Shipped to Disposal Is Not Properly
Controlled( GAO/ NSIAD- 99- 84, July 1, 1999).
DOD Financial Management: More Reliable Information Key to Assuring
Accountability and Managing Defense Operations More Efficiently (GAO/ T-
AIMD/ NSIAD- 99- 145, Apr. 14, 1999).
Defense Inventory: Navy Procedures for Controlling In- Transit Items Are Not
Being Followed( GAO/ NSIAD- 99- 61, Mar. 31, 1999).
Performance and Accountability Series: Major Management Challenges and
Program Risks- Department of Defense( GAO/ OCG- 99- 4, Jan. 1999).
High- Risk Series: An Update( GAO/ HR- 99- 1, Jan. 1999). Department of
Defense: Financial Audits Highlight Continuing Challenges to Correct Serious
Financial Management Problems (GAO/ T- AIMD/ NSIAD- 98- 158, Apr. 16, 1998).
Department of Defense: In- Transit Inventory( GAO/ NSIAD- 98- 80R, Feb. 27,
1998).
Inventory Management: Vulnerability of Sensitive Defense Material to Theft
(GAO/ NSIAD- 97- 175, Sept. 19, 1997).
Defense Inventory Management: Problems, Progress, and Additional Actions
Needed( T- NSIAD- 97- 109, Mar. 20, 1997).
High- Risk Series: Defense Inventory Management( GAO/ HR- 97- 5, Feb. 1997).
High- Risk Series: Defense Financial Management( GAO/ HR- 97- 3, Feb. 1997).
(709484) Lett er
GAO United States General Accounting Office
Page 1 GAO- 01- 30 Defense Inventory
Contents
Page 2 GAO- 01- 30 Defense Inventory
Page 3 GAO- 01- 30 Defense Inventory United States General Accounting Office
Washington, D. C. 20548 Page 3 GAO- 01- 30 Defense Inventory
Page 4 GAO- 01- 30 Defense Inventory
Page 5 GAO- 01- 30 Defense Inventory
Page 6 GAO- 01- 30 Defense Inventory
Page 7 GAO- 01- 30 Defense Inventory
Page 8 GAO- 01- 30 Defense Inventory
Page 9 GAO- 01- 30 Defense Inventory
Page 10 GAO- 01- 30 Defense Inventory
Page 11 GAO- 01- 30 Defense Inventory
Page 12 GAO- 01- 30 Defense Inventory
Page 13 GAO- 01- 30 Defense Inventory
Page 14 GAO- 01- 30 Defense Inventory
Page 15 GAO- 01- 30 Defense Inventory
Page 16 GAO- 01- 30 Defense Inventory
Page 17 GAO- 01- 30 Defense Inventory
Page 18 GAO- 01- 30 Defense Inventory
Page 19 GAO- 01- 30 Defense Inventory
Page 20 GAO- 01- 30 Defense Inventory
Page 21 GAO- 01- 30 Defense Inventory
Page 22 GAO- 01- 30 Defense Inventory
Appendix I
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 23 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 24 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 25 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 26 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 27 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 28 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 29 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 30 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 31 GAO- 01- 30 Defense Inventory
Appendix I Status of DOD's Actions Regarding Secondary Items
Page 32 GAO- 01- 30 Defense Inventory
Page 33 GAO- 01- 30 Defense Inventory
Appendix II
Appendix II Comments From the Department of Defense
Page 34 GAO- 01- 30 Defense Inventory
Appendix II Comments From the Department of Defense
Page 35 GAO- 01- 30 Defense Inventory
Appendix II Comments From the Department of Defense
Page 36 GAO- 01- 30 Defense Inventory
Page 37 GAO- 01- 30 Defense Inventory
Appendix III
Page 38 GAO- 01- 30 Defense Inventory
Related GAO Products Page 39 GAO- 01- 30 Defense Inventory
Ordering Information The first copy of each GAO report is free. Additional
copies of reports are $2 each. A check or money order should be made out to
the Superintendent of Documents. VISA and MasterCard credit cards are
accepted, also.
Orders for 100 or more copies to be mailed to a single address are
discounted 25 percent.
Orders by mail: U. S. General Accounting Office P. O. Box 37050 Washington,
DC 20013
Orders by visiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW)
U. S. General Accounting Office Washington, DC
Orders by phone: (202) 512- 6000 fax: (202) 512- 6061 TDD (202) 512- 2537
Each day, GAO issues a list of newly available reports and testimony. To
receive facsimile copies of the daily list or any list from the past 30
days, please call (202) 512- 6000 using a touchtone phone. A recorded menu
will provide information on how to obtain these lists.
Orders by Internet: For information on how to access GAO reports on the
Internet, send an e- mail message with “info” in the body to:
info@ www. gao. gov or visit GAO's World Wide Web home page at: http:// www.
gao. gov
To Report Fraud, Waste, or Abuse in Federal Programs
Contact one: Web site: http:// www. gao. gov/ fraudnet/ fraudnet. htm e-
mail: fraudnet@ gao. gov 1- 800- 424- 5454 (automated answering system)
United States General Accounting Office Washington, D. C. 20548- 0001
Official Business Penalty for Private Use $300
Address Correction Requested Bulk Rate
Postage & Fees Paid GAO Permit No. GI00
*** End of document. ***