1994 Defense Budget: Potential Reductions to Ammunition Programs (Chapter
Report, 09/20/93, GAO/NSIAD-93-296).
Most items in the military services' $1.1 billion fiscal year 1994
request for ammunition and the Army's $207 million request for
production base support are justified. In GAO's view, however, nearly
$198 million of this request is not justified and should not be funded.
Further, nearly $64 million from the services' fiscal year 1993
appropriations and about $55 million from the services' fiscal year 1992
appropriations are no longer needed for the ammunition for which the
funds were appropriated. These amounts could be rescinded or used to
cut the fiscal year 1994 budget. In addition, the Air Force might not
need the $26.5 million that it requested for fiscal year 1994 for 30-mm
training cartridges.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-93-296
TITLE: 1994 Defense Budget: Potential Reductions to Ammunition
Programs
DATE: 09/20/93
SUBJECT: Defense budgets
Defense appropriations
Defense cost control
Ammunition
Defense procurement
Reprogramming of appropriated funds
Budget updates
Budget cuts
Budget authority rescission
Budget administration
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Cover
================================================================ COVER
Report to Congressional Requesters
September 1993
1994 DEFENSE BUDGET - POTENTIAL
REDUCTIONS TO AMMUNITION PROGRAMS
GAO/NSIAD-93-296
1994 Defense Ammunition Budget
(393541)
Abbreviations
=============================================================== ABBREV
BL&P - blind, load, and plug
GAO - General Accounting Office
SADARM - Sense and Destroy Armor munition
Letter
=============================================================== LETTER
B-216058
September 20, 1993
The Honorable Daniel K. Inouye
Chairman, Subcommittee on Defense
Committee on Appropriations
United States Senate
The Honorable John P. Murtha
Chairman, Subcommittee on Defense
Committee on Appropriations
House of Representatives
As you requested, we reviewed the military services' justifications
for their fiscal year 1994 budget requests for ammunition items and
the Army's request for ammunition production base support. In
addition, we examined selected segments of prior-year ammunition
programs. In June 1993, we briefed your staffs on the results of our
review. This report includes the information provided at those
briefings and the final results of our review.
We are sending copies of this report to the Chairmen and Ranking
Minority Members of the Senate and House Committees on Armed Services
and on Appropriations; the Secretaries of Defense, the Army, the
Navy, and the Air Force; the Commandant of the Marine Corps; and
other interested parties. We will also make copies available to
others upon request.
This report was prepared under the direction of Louis J. Rodrigues,
Director, Systems Development and Production Issues, who may be
reached on (202) 512-4841 if you or your staff have any questions.
Major contributors to this report are listed in appendix I.
Frank C. Conahan
Assistant Comptroller General
EXECUTIVE SUMMARY
============================================================ Chapter 0
PURPOSE
---------------------------------------------------------- Chapter 0:1
The Chairmen of the Subcommittees on Defense, Senate and House
Committees on Appropriations, asked GAO to review the military
services' justifications for their fiscal year 1994 budget requests
for ammunition and the Army's request for ammunition production base
support to determine whether the programs should be funded in the
amounts requested. GAO also reviewed selected segments of
appropriations for prior years for some items to determine whether
unused funds could be rescinded or used to reduce the fiscal year
1994 request.
BACKGROUND
---------------------------------------------------------- Chapter 0:2
As shown in table 1, the military services requested about $1.3
billion for ammunition and ammunition production base support in
fiscal year 1994.
Table 1
Military Services' Fiscal Year 1994
Budget Requests for Ammunition and for
Ammunition Production Base Support
(Dollars in millions)
Service Amount
---------------------------------------------------------- ----------
Army
----------------------------------------------------------------------
Ammunition $527.2
Production base support 207.2
Navy 277.1
Air Force 239.3
Marine Corps 85.1
======================================================================
Total $1,335.9
----------------------------------------------------------------------
The services justified their ammunition requests by stating that the
ammunition was needed for training and a war reserve stockpile. The
Army justified its request for production base support by stating
that the funds were needed to modernize and expand the ammunition
production base, to lay away production facilities no longer required
for active production and maintain inactive facilities being retained
for possible future production, to provide components for use in
demonstrating production capacities, and to destroy excess and
obsolete conventional ammunition.
RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3
GAO concluded that most items in the services' $1.129 billion fiscal
year 1994 request for ammunition and the Army's $207.2 million
request for production base support are justified. However, as shown
in table 2, GAO believes $197.9 million, or 14.8 percent, of the
fiscal year 1994 request is not justified and should not be funded.
Further, $63.9 million from the services' fiscal year 1993
appropriations and $55.2 million from the services' fiscal year 1992
appropriations are no longer needed for the ammunition items for
which the funds were appropriated. These prior-year funds could be
rescinded or used to reduce the fiscal year 1994 budget. Table 2
identifies the potential reductions and rescissions to the military
services' ammunition programs for fiscal year 1994 and prior years.
Table 2
Potential Reductions and Rescissions to
the Services' Ammunition Programs
(Dollars in millions)
Service 1994 1993 1992 Total
------------------------------ -------- -------- -------- ========
Army
----------------------------------------------------------------------
Ammunition $114.7 $50.6 $30.2 $195.5
Production base support 3.5 0 0 3.5
Navy 57.9 0 0 57.9
Air Force 21.5 6.8 14.7 43.0
Marine Corps 0.3 6.5 10.3 17.1
======================================================================
Total $197.9 $63.9 $55.2 $317.0
----------------------------------------------------------------------
In addition, the Air Force might not need the $26.5 million it
requested for fiscal year 1994 for 30-mm training cartridges.
Although GAO did not identify any specific budget reduction for this
item, GAO has included information on the item because the Committees
on Appropriations should be aware of the issue when considering the
Air Force's budget request.
PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4
ARMY AMMUNITION AND
AMMUNITION PRODUCTION BASE
SUPPORT PROGRAMS
-------------------------------------------------------- Chapter 0:4.1
The Army's $527.2 million fiscal year 1994 request for ammunition and
$207.2 million fiscal year 1994 request for production base support
could be reduced by $118.2 million for the following reasons:
-- $77.7 million is requested for 155-mm Sense and Destroy Armor
projectiles that will not be approved for production and troop
use in fiscal year 1994,
-- $37 million is requested for seven ammunition items for which
program quantities are greater than needed in fiscal year 1994,
and
-- $3.5 million is requested for three production base support
layaway projects for which funding will not be needed in fiscal
year 1994.
In addition, $50.6 million of the Army's fiscal year 1993
appropriation for ammunition for three items and $30.2 million of the
Army's fiscal year 1992 appropriation for two items are not needed
because the Army has an adequate inventory of the items for which the
funds were provided.
NAVY AMMUNITION PROGRAM
-------------------------------------------------------- Chapter 0:4.2
The Navy's $277.1 million fiscal year 1994 request for ammunition
could be reduced by $57.9 million for 11 items for which program
quantities are greater than needed.
AIR FORCE AMMUNITION PROGRAM
-------------------------------------------------------- Chapter 0:4.3
The Air Force's $239.3 million fiscal year 1994 request for
ammunition could be reduced by $21.5 million for three items for
which program quantities are greater than needed. The Air Force
reduced the buying levels for many items due to decreased
requirements brought about by a diminished worldwide threat and the
resulting decrease in force structure.
In addition, the Air Force might not need the $26.5 million it
requested for about 3.4 million 30-mm training cartridges in fiscal
year 1994. Although the Air Force has more than an adequate
inventory of 30-mm training cartridges to meet its fiscal year 1994
training needs, about 9 million rounds in its inventory produced in
prior years cannot be released for use until they have been tested to
determine whether they meet the Air Force's specifications.
Therefore, the Air Force's need for fiscal year 1994 funding for this
item is contingent upon the results of the tests.
Further, $6.764 million of the Air Force's fiscal year 1993
appropriation for ammunition for three items and $14.72 million of
the Air Force's fiscal year 1992 appropriation for four items could
be rescinded or used to reduce the fiscal year 1994 request because
the Air Force did not indicate a specific need for these funds for
the items for which the funds were provided.
MARINE CORPS AMMUNITION
PROGRAM
-------------------------------------------------------- Chapter 0:4.4
The Marine Corps' $85.1 million fiscal year 1994 request for
ammunition could be reduced by $0.3 million because program
quantities for two items are greater than needed in fiscal year 1994.
In addition, $6.5 million of the Marine Corps' fiscal year 1993
appropriation for ammunition for four items and $10.3 million of the
Marine Corps' fiscal year 1992 appropriation for ammunition for three
items are not needed. The Marine Corps does not need to procure the
items for which the funds were provided because the Marine Corps has
an adequate inventory of the items.
RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5
GAO recommends that the Senate and House Committees on Appropriations
reduce the Department of Defense's fiscal year 1994 ammunition budget
by the following amounts:
-- $114.7 million for 8 items in the Army's ammunition request,
-- $3.5 million in the Army's production base support request,
-- $57.9 million for 11 items in the Navy's request,
-- $21.5 million for 3 items in the Air Force's request, and
-- $0.3 million for 2 items in the Marine Corps' request.
In addition, GAO recommends that the following amounts that were
included in the Department of Defense's fiscal years' 1993 and 1992
ammunition appropriations be rescinded or used to reduce the
Department of Defense's fiscal year 1994 request:
-- $50.6 million from the Army's fiscal year 1993 appropriation for
three items,
-- $30.2 million from the Army's fiscal year 1992 appropriation for
two items,
-- $6.8 million from the Air Force's fiscal year 1993 appropriation
for three items,
-- $14.7 million from the Air Force's fiscal year 1992
appropriation for four items,
-- $6.5 million from the Marine Corps' fiscal year 1993
appropriation for four items, and
-- $10.3 million from the Marine Corps' fiscal year 1992
appropriation for three items.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6
As requested, GAO did not obtain fully coordinated Department of
Defense comments on this report. However, GAO discussed the results
of its work with officials from the Office of the Secretary of
Defense, the Army Materiel Command's Office of the Deputy Chief of
Staff for Ammunition, the Office of the Deputy Chief of Naval
Operations for Logistics, the Air Force's Office of the Deputy Chief
of Staff for Logistics, and the Marine Corps' Office of Program
Manager for Ammunition. They agreed with some, but not all, of GAO's
recommended reductions and GAO has included their views in the report
where appropriate. In addition, Army and Navy officials identified
items for which they believed additional funding was needed in fiscal
year 1994 but for which funds had not been requested. GAO included
in its report, but did not evaluate, the potential funding increases
identified by these officials.
INTRODUCTION
============================================================ Chapter 1
As shown in table 1.1, the military services requested about $1.3
billion for ammunition and ammunition production base support in
fiscal year 1994.
Table 1.1
Military Services' Fiscal Year 1994
Budget Requests for Ammunition and for
Ammunition Production Base Support
(Dollars in millions)
Military service Amount
------------------------------------------------------------ --------
Army $734.4
Navy 277.1
Air Force 239.3
Marine Corps 85.1
======================================================================
Total $1,335.9
----------------------------------------------------------------------
The services indicated that the requested funds for ammunition would
be used to meet training needs and build a war reserve stockpile.
The Army stated that the requested funds for ammunition production
base support would be used to modernize and expand the ammunition
production base, to lay away production facilities no longer required
for active production and maintain inactive facilities being retained
for possible future production, to provide components for use in
demonstrating production capacities, and to destroy excess and
obsolete conventional ammunition.
OBJECTIVES, SCOPE, AND
METHODOLOGY
---------------------------------------------------------- Chapter 1:1
The Chairmen of the Subcommittees on Defense, Senate and House
Committees on Appropriations, asked us to review the military
services' justifications for their fiscal year 1994 budget requests
for ammunition and the Army's request for ammunition production base
support to determine whether the programs should be funded in the
amounts requested. We also reviewed the services' use of prior
years' appropriations for the procurement of ammunition to determine
whether unused funds could be rescinded or used to reduce the fiscal
year 1994 request.
In conducting our review, we evaluated the ammunition and production
base support requests involving large dollar amounts, ammunition
items being bought for the first time, and ammunition items that were
having production and/or performance problems. In reviewing the
budget requests, we considered such factors as ammunition
requirements, inventory levels, item quality, testing and
development, funded program status, unit costs, and field
malfunctions to identify items with potential problems. We also
analyzed production schedules, production capacities, past
production, procurement lead times, and component deliveries to
determine whether the services can execute the ammunition programs
efficiently and economically. We compared projected inventory levels
to training usage to ensure that inventories would not greatly exceed
objectives. We also determined whether there will be sufficient
quantities of components to produce end items. We did not verify the
accuracy of data the services provided, such as inventory levels and
training usage, but compared such information with data provided in
prior years to evaluate its reasonableness.
To evaluate projects for production base support, we determined
whether their designs had been completed prior to budget submission
and whether the projects were still needed.
In conducting our evaluation, we interviewed ammunition production
managers, procurement officials, and quality assurance and
engineering staff. We also reviewed various documents, such as
information papers, test data analyses, training consumption reports,
and budget support data, which we obtained from the following:
-- Army, Navy, Air Force, and Marine Corps headquarters,
Washington, D.C.;
-- U.S. Army Materiel Command, Alexandria, Virginia;
-- U.S. Army Armament, Munitions and Chemical Command, Rock
Island, Illinois;
-- U.S. Army Armament Research, Development and Engineering
Center, Dover, New Jersey;
-- U.S. Army Production Base Modernization Activity, Dover, New
Jersey;
-- Project Manager's Office for Sense and Destroy Armor, Dover, New
Jersey;
-- Project Manager's Office for Mortar Systems, Dover, New Jersey;
-- Project Manager's Office for Mines, Dover, New Jersey;
-- Marine Corps Systems Command, Washington, D.C.;
-- Naval Air Systems Command, Arlington, Virginia; and
-- Ogden Air Logistics Center, Ogden, Utah.
We conducted our review from November 1992 to September 1993 in
accordance with generally accepted government auditing standards. We
discussed a draft of this report with officials from the Office of
the Secretary of Defense, the Army Materiel Command's Office of the
Deputy Chief of Staff for Ammunition, the Navy's Office of the Deputy
Chief of Naval Operations for Logistics, the Air Force's Office of
the Deputy Chief of Staff for Logistics, and the Marine Corps' Office
of Program Manager for Ammunition. We have incorporated their
comments in the report, where appropriate. As requested, we did not
obtain fully coordinated Department of Defense comments on this
report.
ARMY AMMUNITION PROGRAM
============================================================ Chapter 2
The Army requested $527.218 million for ammunition and $207.209
million for ammunition production base support in its fiscal year
1994 ammunition budget request.
Our review indicates that the Army does not need $118.188 million in
its fiscal year 1994 ammunition and ammunition production base
support requests--$114.664 million for eight ammunition items and
$3.524 million for ammunition production base support. The items for
which we identified potential reductions and a summary of our basis
for the reductions are identified in table 2.1.
Table 2.1
Potential Reductions to the Army's
Fiscal Year 1994 Ammunition Budget
Request
(Dollars in millions)
Amount Potential
Description of item requested reduction Basis for reduction
------------------------ -------------- -------------- ----------------------
155-mm XM898 SADARM $77.661 $77.661 Not ready for
artillery projectile production.
7.62-mm M82 cartridge 11.309 7.156 Inventory will exceed
needs.
7.62-mm 4-ball/1-tracer 1.460 1.460 Inventory will exceed
cartridge needs.
7.62-mm M118 cartridge 1.028 1.028 Inventory will exceed
needs.
.45 caliber M1911 0.325 0.325 Inventory will exceed
cartridge needs.
.50 caliber 4-ball/1- 19.055 1.717 Inventory will exceed
tracer cartridge needs.
25-mm M910 cartridge 27.451 25.000 Inventory will exceed
needs.
.22 caliber match 0.317 0.317 Inventory will exceed
cartridge for rifle needs.
================================================================================
Subtotal 138.606 114.664
Layaway of industrial 51.532 3.524 Production lines will
facilities operate through
fiscal year 1994.
================================================================================
Total $190.138 $118.188
--------------------------------------------------------------------------------
In addition, $50.593 million of the Army's fiscal year 1993
appropriation for ammunition for three items and $30.181 million of
the Army's fiscal year 1992 appropriation for two items are not
needed because the Army has an adequate inventory of the items for
which the funds were provided.
ONE ITEM NOT READY FOR
PRODUCTION
---------------------------------------------------------- Chapter 2:1
The Army requested $77.661 million for low-rate initial production of
1,213 155-mm Sense and Destroy Armor (SADARM) projectiles in fiscal
year 1994. However, performance and reliability problems have
prevented the Army from obtaining approval for production. Because
of this delay, it is premature to provide the $77.661 million the
Army is requesting in fiscal year 1994.
In July 1993, the Army suspended performance flight testing of SADARM
because of concerns about the system's performance and reliability.
The Army has developed a plan to extend the engineering and
manufacturing development phase for approximately 2 years to address
the projectile's performance problem. Therefore, the Army does not
need the $77.661 million it requested for SADARM production in fiscal
year 1994.
Army officials agreed that the $77.661 million fiscal year 1994
request for low-rate initial production of the SADARM projectile is
not needed because the projectile is not ready for production.
However, Army officials stated that $98.6 million in research,
development, test, and evaluation funds will be needed in fiscal year
1994 because of the extension of the research and development phase
for SADARM. Because this decision was made after we completed our
fieldwork, we did not evaluate the Army's revised plan.
INVENTORY WILL EXCEED NEEDS
---------------------------------------------------------- Chapter 2:2
Ammunition program quantities for which funds are being requested
should be needed and delivered within the fiscal year's funded
delivery period. The funded delivery period for an ammunition item
begins the first day of the last month of the procurement lead time
and ends 12 months later.\1 For example, if the procurement lead time
for an ammunition item in the fiscal year 1994 budget is 15 months,
the funded delivery period would start on December 1, 1994, and end
on November 30, 1995. Since ammunition programs are funded each
year, funding should not be provided for ammunition items that are
not needed or will not be delivered until after the fiscal year 1994
funded delivery period.
The Army's fiscal year 1994 request could be reduced by $37.003
million for seven items because projected inventories will exceed the
Army's inventory objectives (see table 2.2).
Table 2.2
Amount of Inventory Exceeding Needs for
Seven Items in the Army's Fiscal Year
1994 Ammunition Budget
(Quantity in millions)
Beginning Inventory Quantity
inventory\ Quantity estimated Inventory exceeding
Description of item a requested usage\b objective needs
-------------------- ---------- ---------- ---------- ---------- ----------
7.62-mm M82 155.903 40.633 144.366 26.457 25.713
cartridge
7.62-mm 4-ball/1- 11.980 3.024 6.920 1.005 7.079
tracer cartridge
7.62-mm M118 8.285 2.866 3.636 0.011 7.504
cartridge
.45 caliber M1911 \c 2.284 \c \c 8.064
cartridge
.50 caliber 4-ball/ 37.372 13.970 42.528 7.555 1.259
1-tracer cartridge
25-mm M910 cartridge 7.098 2.007 6.245 1.031 1.829
.22 caliber match 10.853 3.791 8.960 0.967 4.717
cartridge for rifle
--------------------------------------------------------------------------------
\a Figures include items due in from prior-year programs.
\b Figures include estimated usage through the end of the fiscal year
1994 program period.
\c Data omitted because inventory objective is classified.
--------------------
\1 Procurement lead time is the sum of administrative and production
lead times. Administrative lead time begins at the start of the
fiscal year and represents the time needed to award contracts for
components. Production lead time begins when the component contracts
have been awarded and ends when initial delivery is made for the
assembled ammunition item.
7.62-MM M82 CARTRIDGES
-------------------------------------------------------- Chapter 2:2.1
The Army's $11.309 million request for 40,633,000 7.62-mm M82
cartridges could be reduced by $7.156 million because projected
inventories will exceed requirements by 25,713,000 cartridges. Army
officials agreed that the request could be reduced by $6.844 million.
However, we believe that a reduction of $7.156 million is more
appropriate because it is based on the Army's projected consumption
through the fiscal year 1994 program period, which reflects the
Army's current training requirement for the cartridge.
7.62-MM 4-BALL/1-TRACER
CARTRIDGES
-------------------------------------------------------- Chapter 2:2.2
The Army's $1.46 million request for 3,024,000 7.62-mm
4-ball/1-tracer cartridges for overhead fire could be denied because
projected inventories will exceed requirements without the fiscal
year 1994 program. Army officials agreed.
7.62-MM M118 CARTRIDGES
-------------------------------------------------------- Chapter 2:2.3
The Army's $1.028 million request for 2,866,000 7.62-mm M118 special
ball cartridges could be denied because projected inventories will
exceed requirements without the fiscal year 1994 program. Army
officials agreed.
.45 CALIBER M1911 CARTRIDGES
-------------------------------------------------------- Chapter 2:2.4
The Army's $0.325 million request for 2,284,000 .45 caliber M1911
cartridges could be denied because projected inventories will exceed
requirements without the fiscal year 1994 program. Army officials
agreed.
.50 CALIBER 4-BALL/1-TRACER
CARTRIDGES
-------------------------------------------------------- Chapter 2:2.5
The Army's $19.055 million request for 13,970,000 .50 caliber
4-ball/1-tracer cartridges could be reduced by $1.717 million because
projected inventories will exceed requirements by 1,259,000
cartridges. Army officials agreed.
25-MM M910 CARTRIDGES
-------------------------------------------------------- Chapter 2:2.6
The Army's $27.451 million request for 2,007,000 25-mm M910
cartridges could be reduced by $25 million because projected
inventories will exceed requirements by 1,829,000 cartridges. Army
officials agreed.
.22 CALIBER MATCH CARTRIDGES
FOR RIFLES
-------------------------------------------------------- Chapter 2:2.7
The Army's $1.11 million request for items less than $2 million
includes $0.317 million for 3,791,000 .22 caliber match cartridges
for rifles. The $0.317 million request could be denied because
projected inventories will exceed requirements without the fiscal
year 1994 program. Army officials agreed.
AMMUNITION PRODUCTION BASE
SUPPORT
---------------------------------------------------------- Chapter 2:3
The Army requested $207.209 million for ammunition production base
support in fiscal year 1994, including $51.532 million to lay away
industrial facilities. We believe that the Army's $3.524 million
request to lay away industrial facilities at three ammunition plants
is not needed because the facilities are scheduled to operate through
the fiscal year 1994 program period (see table 2.3).
Table 2.3
Potential Reductions to the Army's
Fiscal Year 1994 Ammunition Budget
Request for Layaway Projects
(Dollars in millions)
Amount
requeste
Location d Item produced
---------------------------------------- -------- ------------------
Kansas Army Ammunition Plant $2.672 Combined effects
munitions
Iowa Army Ammunition Plant 0.536 105-mm HERA
cartridges
Milan Army Ammunition Plant 0.316 M936 fuze
======================================================================
Total $3.524
----------------------------------------------------------------------
Army officials agreed that fiscal year 1994 funds are not needed for
the three layaway projects but did not agree with the reduction.
They said the funds are needed to lay away production facilities at
the Radford Army Ammunition Plant. According to Army officials, over
30 percent of the facilities at the Radford plant have been
designated as no longer required for active production and layaway of
these facilities would reduce production overhead expenses. However,
this was not the purpose for which the funding was requested. In
addition, we could not evaluate the need for fiscal year 1994 layaway
funding at the Radford plant because the Army did not provide project
cost and schedule data.
UNOBLIGATED PRIOR-YEAR
APPROPRIATIONS
---------------------------------------------------------- Chapter 2:4
We have identified $80.774 million in unobligated appropriations for
fiscal years 1993 and 1992 that could be rescinded or used to reduce
the Army's fiscal year 1994 request because the Army does not need to
procure the items for which the funds were provided.
As of September 10, 1993, the Army had not obligated funds totaling
$50.593 million from its fiscal year 1993 ammunition appropriations
for three items and $30.181 million from its fiscal year 1992
appropriations for two items (see table 2.4).
Table 2.4
Unobligated Amounts from the Army's
Fiscal Years 1993 and 1992
Appropriations
Fiscal Fiscal
year year
Item 1993 1992 Total
---------------------------------------- -------- -------- ========
155-mm M203 red bag propelling charge $21.493 $0 $21.493
105-mm M490A1 TP-T tank cartridge 19.000 0 19.000
105-mm M724A1 DS-TP tank cartridge 10.100 0 10.100
M762 electric time artillery fuze 0 22.000 22.000
8-inch M1 green bag propelling charge 0 8.181 8.181
======================================================================
Total $50.593 $30.181 $80.774
----------------------------------------------------------------------
Army officials agreed that the Army does not need to procure the
items for which the funds were provided because the Army has an
adequate inventory of the items involved. However, they did not
agree that the unobligated funds should be rescinded. They said that
$9.999 million of the $19 million provided for 105-mm M490A1 TP-T
tank cartridges was being reprogrammed to destroy excess and obsolete
conventional ammunition and that the Army would like to reprogram the
remaining $70.775 million for other higher priority needs.
ARMY'S PROPOSED BUDGET
INCREASES
---------------------------------------------------------- Chapter 2:5
At the end of our review, Army officials provided us a list of eight
items for which they believed additional funding of $118.424 million
was needed for fiscal year 1994. Table 2.5 provides details on the
Army's proposed budget increases.
We did not review the appropriateness of funding these items because
the Army provided the list after we had completed our fieldwork and
because the Army did not provide sufficient data to support or
justify the need for more funding. The Army has proposed that $25
million be provided for 25-mm M919 cartridges for fiscal year 1994;
however, as of June 22, 1993, it had not obligated $18.3 million of
its fiscal year 1991 appropriation for this cartridge.
Table 2.5
Army's Proposed Budget Increases
(Dollars in millions)
Proposed
Description of item increase
---------------------------------------------------------- ----------
5.56-mm M200 blank cartridges $6.355
5.56-mm M855 ball cartridges linked for SAW 0.740
5.56-mm ball cartridges for M16A2 5.224
7.62-mm 4-ball/1-tracer cartridges for minigun 8.833
7.62-mm M852 cartridges 1.912
.50 caliber blank cartridges with M9 link 10.360
25-mm M919 cartridges 25.000
Volcano AT/AP M87 mine 60.000
======================================================================
Total $118.424
----------------------------------------------------------------------
CONCLUSIONS
---------------------------------------------------------- Chapter 2:6
We believe that $114.664 million of the Army's fiscal year 1994
request is not needed because one item will not be ready for
production in fiscal year 1994 and requested program quantities for
seven other items are greater than needed. We also believe that
$3.524 million of the Army's fiscal year 1994 request for production
base support is not needed because funding requests for three layaway
projects are premature.
In addition, $50.593 million of the Army's fiscal year 1993
appropriation for three items and $30.181 million of the Army's
fiscal year 1992 appropriation for two items are not needed because
the Army has an adequate inventory of the items for which the funds
were provided. These unobligated appropriations from prior years
could be rescinded or used to reduce the Army's fiscal year 1994
request.
RECOMMENDATIONS
---------------------------------------------------------- Chapter 2:7
We recommend that the Senate and House Committees on Appropriations
reduce the Army's fiscal year 1994 budget request by $114.664 million
for eight ammunition items and by $3.524 million for production base
support. We also recommend that $50.593 million from the Army's
fiscal year 1993 appropriation and $30.181 million from the Army's
fiscal year 1992 appropriation be rescinded or used to reduce the
Army's fiscal year 1994 request.
NAVY AMMUNITION PROGRAM
============================================================ Chapter 3
The Navy requested $277.1 million for ammunition items in its fiscal
year 1994 budget. Our review indicates that the Navy does not need
$57.881 million in fiscal year 1994 because the Navy overestimated
its training needs for 11 ammunition items (see table 3.1).
Table 3.1
Potential Reductions to the Navy's
Fiscal Year 1994 Ammunition Budget
Request
(Dollars in millions)
Amount Potential
Description of item requested reduction
------------------------------------------ ------------ ------------
5-inch/54 gun ammunition
----------------------------------------------------------------------
Full propelling charge $23.879 $23.879
VTNF 5.858 5.858
BL&P 5.135 5.135
Practice bombs
----------------------------------------------------------------------
BDU-45 NTP 6.026 6.026
BDU-48/B 0.490 0.490
76-mm gun ammunition
----------------------------------------------------------------------
VTNF 4.257 4.257
BL&P 1.526 1.526
Air expendable countermeasures
----------------------------------------------------------------------
MJU-8A/B flare 4.113 4.113
Machine gun ammunition
----------------------------------------------------------------------
20-mm PGU-27 TP 2.790 2.790
20-mm PGU-27 w/14 link 1.712 1.712
Small arms and landing party ammunition
----------------------------------------------------------------------
9-mm M882 ball 3.407 2.095
======================================================================
Total $59.193 $57.881
----------------------------------------------------------------------
OVERESTIMATED TRAINING NEEDS
---------------------------------------------------------- Chapter 3:1
The Navy's $59.193 million fiscal year 1994 request for 11 ammunition
items could be reduced by $57.881 million because the Navy has
overestimated its training needs. Table 3.2 shows actual training
consumptions as a percent of the Navy's projections for fiscal years
1990 through 1992. (We are presenting the data as percentages
because quantities are classified.)
Table 3.2
Actual Training Consumptions as a
Percentage of Projections for Fiscal
Years 1990 Through 1992
Actual historical
usage as a
percentage of
Item projected usage
-------------------------------------------------- ------------------
5-inch/54 full propelling charge 39
5-inch/54 VTNF 33
5-inch/54 BL&P 50
BDU-45 NTP 57
BDU-48/B 32
76-mm VTNF 4
76-mm BL&P 52
MJU-8A/B flare 12
20-mm PGU-27 TP 42
20-mm PGU-27 w/14 link 75
9-mm M882 ball 13
----------------------------------------------------------------------
Source: GAO analysis of Navy data.
Given the Navy's past consumption patterns, we believe that the
Navy's fiscal year 1994 projected usage for the 11 items is
overstated. On the basis of the highest or average annual usage
during fiscal years 1990 through 1992, we believe that the Navy's
$59.193 million request for the 11 items could be reduced by $57.881
million.
Navy officials agreed with reductions of $16.442 million requested
for five items: $7.8 million of $23.879 million requested for
5-inch/54 gun full propelling charges, the $6.026 million requested
for BDU-45 NTP practice bombs, the $0.49 million for BDU-48/B
practice bombs, the $1.526 million requested for 76-mm blind, load
and plug (BL&P) gun ammunition, and $0.6 million of $3.407 million
requested for 9-mm M882 ball cartridges. However, they said that
they disagreed with the other reductions for the following reasons:
-- The Navy placed a moratorium on the use of 5-inch/54 gun
ammunition for training because of inventory shortages. Fiscal
year 1994 funds are needed to bring inventories to acceptable
levels.
-- Low usage of the 76-mm VTNF ammunition was due to low inventory
levels and the fleet's unfamiliarity with the cartridge. Usage
is expected to increase in the future.
-- We should consider projections of expenditures for the improved
MJU-8B flare in our calculations.
-- Training expenditures for machine gun ammunition were
constrained by the unavailability of assets in prior years and
will increase in the future.
-- The Navy projects high expenditure rates for the 9-mm ball
cartridge because it replaces the .45 caliber cartridge. Also,
the fleet must train to qualify for the 9-mm weapon.
We believe that the data the Navy provided to us does not support the
Navy's position. Our analysis of assets and expenditures for fiscal
years 1990 through 1992 shows that actual expenditures for most of
the 11 items noted in table 3.2 were less than 15 percent of
available assets. The Navy's projected and actual usage of 76-mm
BL&P cartridges during fiscal years 1987 through 1992 illustrates the
point. As shown in figure 3.1, the Navy projected that it would use
substantially more of its inventory of 76-mm BL&P rounds than it
actually used. For example, it projected that it would use 34
percent of available assets of the 76-mm BL&P cartridges in fiscal
year 1992, whereas it actually used only 16 percent that year.
Figure 3.1: Projected and
Actual Consumption for the
76-mm BL&P Cartridge, Fiscal
Years 1987 to 1992
(See figure in printed
edition.)
NAVY'S PROPOSED BUDGET
INCREASES
---------------------------------------------------------- Chapter 3:2
Navy officials provided us a list of items for which they believed
additional funding is needed in fiscal year 1994 but for which funds
had not been requested (see table 3.3). We did not review the
appropriateness of funding these items because the Navy did not
provide sufficient data to support or justify the need for more
funding. However, the list includes two items (76-mm BL&P cartridge
and PGU-27 TP cartridge) for which we have recommended reductions in
the fiscal year 1994 program.
Table 3.3
Navy's Proposed Budget Increases
(Dollars in millions)
Proposed Increased
Item quantity amount
---------------------------------------------- ---------- ----------
GBU-24 166 $13.136
2.75-inch rocket illuminating warhead 45,543 39.437
25-mm PGU-25/32 HEI cartridge 74,887 0.142
RR-144 ABN chaff 140,300 0.498
20-mm PGU-27 TP cartridge 493,700 1.940
RR-184 BOL chaff 1,048 2.902
5-inch/54 HE CVT projectile 18,300 11.845
GEN X decoy 7,300 40.851
SM875 200,000 1.920
76-mm HE-IR cartridge 11,800 11.733
76-mm BL&P cartridge 4,100 1.227
CCU-41/B chaff 148,000 0.230
MJU-7 flare 4,366 0.114
.50 caliber MK211 cartridge 1,016,400 1.616
25-mm PGU-32 HEI-T cartridge 137,200 2.241
RR-188 chaff 5,527 0.003
JATO MK6 422 2.583
BBU-36 flare 6,400 0.008
======================================================================
Total $132.426
----------------------------------------------------------------------
CONCLUSION
---------------------------------------------------------- Chapter 3:3
We believe that $57.881 million of the Navy's fiscal year 1994
request is not needed because requested program quantities for 11
ammunition items are greater than needed.
RECOMMENDATION
---------------------------------------------------------- Chapter 3:4
We recommend that the Senate and House Committees on Appropriations
reduce the Navy's fiscal year 1994 ammunition budget request by
$57.881 million.
AIR FORCE AMMUNITION PROGRAM
============================================================ Chapter 4
The Air Force requested $239.3 million for ammunition items in its
fiscal year 1994 budget. Our review indicates that the Air Force
does not need $21.462 million in fiscal year 1994 for three items.
Table 4.1 shows the items for which we have identified potential
reductions and a summary of our basis for the reductions.
Table 4.1
Potential Reductions to the Air Force's
Fiscal Year 1994 Ammunition Budget
Request
(Dollars in millions)
Potenti
Amount al
Description of request reducti
item ed on Basis for reduction
---------------- ------- ------- ----------------------------------
MK-82 inert/ $6.318 $6.318 Overstated training consumption
BDU-50 bomb
25 pound 7.405 1.821 Overstated training consumption
practice bomb
M-206 cartridge 13.323 13.323 Inventory will exceed needs
flare
======================================================================
Total $27.046 $21.462
----------------------------------------------------------------------
In addition, the Air Force might not need the $26.464 million it
requested for about 3.4 million 30-mm training cartridges in fiscal
year 1994 because the Air Force might have an adequate supply of
30-mm training cartridges in its inventory without a fiscal year 1994
buy. Although we did not identify any specific budget reductions for
this item, we have included information on it because the Committees
on Appropriations should be aware of the issue when considering the
Air Force's budget request.
Further, we believe that $6.764 million of the Air Force's fiscal
year 1993 appropriation for ammunition for three items and $14.72
million of the Air Force's fiscal year 1992 appropriation for four
items could be rescinded or used to reduce the fiscal year 1994
request because the Air Force did not indicate a specific need for
these funds for the items for which the funds were provided.
OVERESTIMATED TRAINING NEEDS
---------------------------------------------------------- Chapter 4:1
The Air Force's $13.723 million request for two items could be
reduced by $8.139 million because the Air Force overestimated its
training needs for these items.
MK-82 INERT/BDU-50 BOMB
-------------------------------------------------------- Chapter 4:1.1
The Air Force's $6.318 million request for 24,936 MK-82 inert/BDU-50
bombs could be denied because the Air Force overestimated its
training needs. The Air Force used a 32-month procurement lead time
that it could not justify. The Army procures this item for the Air
Force and, according to Army records, the correct procurement lead
time is 24 months. Thus, in projecting its inventory position at the
end of the fiscal year 1994 program period, the Air Force included in
its calculations 8 months of additional training expenditures
totaling 29,331 bombs. Air Force officials said that the Army
reduced the procurement lead time to 24 months after the Air Force
had submitted its budget request and agreed with the $6.318 million
reduction.
25 POUND BDU-33 BOMB
-------------------------------------------------------- Chapter 4:1.2
The Air Force's $7.405 million request for 715,704 25 pound practice
bombs could be reduced by $1.821 million for 176,087 bombs because
the Air Force overestimated its training expenditures. The Air Force
projected average annual usage of about 1.06 million rounds through
the end of the fiscal year 1994 funded delivery period; whereas,
actual usage for fiscal years 1990-92 averaged 969,991 annually.
Based on actual usage, we estimate that the Air Force overestimated
its training requirements for fiscal year 1994 by 176,087 rounds, or
$1.821 million. Air Force officials initially agreed but
subsequently disagreed that their training requirements were
overestimated. We believe, however, that based on past consumption
patterns, the Air Force overestimated its training needs and that the
Air Force's fiscal year 1994 request could be reduced by $1.821
million.
INVENTORY WILL EXCEED NEEDS
---------------------------------------------------------- Chapter 4:2
The Air Force's $13.323 million request for 659,370 M-206 cartridge
flares could be denied because projected inventories will exceed the
Air Force's inventory objectives without the fiscal year 1994
program.
Air Force officials disagreed, stating that this item has a 7-year
shelf life, which has expired for all but 666,844 of the 4,628,138
million M-206 flares in inventory as of March 30, 1993. They said
that the remaining inventory of 3,961,294 M-206 flares with an
expired shelf life can be used only for training. Air Force
officials also said that requirements for these flares are expected
to increase significantly in the foreseeable future due to operations
in Bosnia.
We continue to believe, however, that the request could be denied for
several reasons: (1) according to Air Force records, the 3,961,294
flares in its inventory are serviceable; (2) the Air Force has not
provided supporting documents to show the age of the inventory; and
(3) according to an Air Force official, the Air Force has conducted
tests of M-206 flares, which showed that the shelf life could be
extended by 2 years.
ONE ITEM MIGHT NOT BE NEEDED
---------------------------------------------------------- Chapter 4:3
The $26.464 million the Air Force is requesting for 3,373,413 30-mm
training cartridges might not be needed. The Air Force's need for
fiscal year 1994 funding for this item is contingent upon the results
of ongoing and planned future tests. Although the Air Force has more
than an adequate inventory of 30-mm training cartridges to meet its
fiscal year 1994 training needs, about 9 million rounds in its
inventory produced in prior years cannot be released for use until
they have been tested to determine whether they meet the Air Force's
specifications and are usable. According to an Air Force official,
these tests are expected to continue into July 1994. If the tests
should disclose that the rounds meet specifications and are usable,
the Air Force will have an excess supply of 30-mm training cartridges
in its inventory and will not need to procure additional cartridges
in fiscal year 1994. However, if the test results should disclose
that they do not meet specifications and are not usable, the Air
Force will need to procure additional 30-mm cartridges in fiscal year
1994 to meet its projected training needs.
UNOBLIGATED PRIOR-YEAR
APPROPRIATIONS
---------------------------------------------------------- Chapter 4:4
We have identified $21.484 million in unobligated appropriations from
fiscal years 1993 and 1992 that could be rescinded or used to reduce
the Air Force's fiscal year 1994 request because the Air Force did
not identify a need to use the funds for the purposes for which the
funds were provided.
As of September 10, 1993, the Air Force had not obligated funds
totaling $6.764 million from its fiscal year 1993 ammunition
appropriations for three items and $14.72 million from its fiscal
year 1992 appropriations for four items (see table 4.2).
Table 4.2
Unobligated Amounts from the Air Force's
Fiscal Years 1993 and 1992
Appropriations
(Dollars in millions)
Fiscal Fiscal
Item year 1993 year 1992 Total
------------------------------------ ---------- ---------- ========
Items less than $2 million (other) $2.894 $5.152 $8.046
Spares and repair parts 2.800 3.900 6.700
Items less than $2 million 0 3.768 3.768
(cartridges)
FMU-139 fuze 0 1.900 1.900
Items less than $2 million (bombs) 1.070 0 1.070
======================================================================
Total $6.764 $14.720 $21.484
----------------------------------------------------------------------
Air Force officials agreed that the $21.484 million is unobligated.
Except for the $1.9 million for the FMU-139 fuze, Air Force officials
neither agreed nor disagreed that the funds could be rescinded or
used to reduce the Air Force's fiscal year 1994 request. They said
that they would like to reprogram the $1.9 million in unobligated
fiscal year 1992 appropriations for FMU-139 fuzes for the Sensor
Fuzed Weapon. However, this was not the purpose for which the funds
were provided. In addition, we requested but the Air Force did not
provide justifications for these unobligated amounts.
CONCLUSIONS
---------------------------------------------------------- Chapter 4:5
We believe that $21.462 million of the Air Force's fiscal year 1994
request for three ammunition items is not needed because requested
program quantities are greater than needed. In addition, the Air
Force might not need to procure 30-mm training cartridges in fiscal
year 1994. Further, $6.764 million of the Air Force's fiscal year
1993 appropriation for ammunition for three items and $14.72 million
of the Air Force's fiscal year 1992 appropriation for four items
could be rescinded or used to reduce the fiscal year 1994 request
because the Air Force did not indicate a need for these funds for the
purposes for which the funds were provided.
RECOMMENDATIONS
---------------------------------------------------------- Chapter 4:6
We recommend that the Senate and House Committees on Appropriations
reduce the Air Force's fiscal year 1994 ammunition budget request by
$21.462 million. We also recommend that $6.764 million from the Air
Force's fiscal year 1993 appropriation and $14.72 million from the
Air Force's fiscal year 1992 appropriation be rescinded or used to
reduce the Air Force's fiscal year 1994 request.
MARINE CORPS AMMUNITION PROGRAM
============================================================ Chapter 5
The Marine Corps requested $85.1 million for ammunition items in its
fiscal year 1994 budget. Our review indicates that the Marine Corps
does not need $0.344 million because the projected inventory for two
items will exceed requirements.
In addition, $6.508 million of the Marine Corps' fiscal year 1993
appropriation for ammunition for four items and $10.285 million of
the Marine Corps' fiscal year 1992 appropriation for ammunition for
three items are not needed because the Marine Corps has an adequate
inventory of the items for which the funds were provided.
INVENTORY WILL EXCEED NEEDS
---------------------------------------------------------- Chapter 5:1
The Marine Corps' $0.669 million fiscal year 1994 request for two
items could be reduced by $0.344 million because projected
inventories will exceed the Marine Corps' inventory objectives (see
table 5.1).
Table 5.1
Amount of Inventory Exceeding Needs for
Two Items in the Marine Corps' Fiscal
Year 1994 Ammunition Budget
Invento Quantit
Beginni Quantit ry Invento y
ng y estimat ry exceedi
invento request ed objecti ng
Description of item ry\a ed usage\b ve needs
------------------------- ------- ------- ------- ------- -------
M68A2 trailer mounted,
practice line charges 1,660 25 1,134 306 245
9-mm practice cartridges 2,024,1 723,545 1,080,6 1,358,4 308,573
31 96 07
----------------------------------------------------------------------
\a Figures include items due in from prior-year programs.
\b Figures include estimated usage through the end of the fiscal year
1994 program period.
M68A2 PRACTICE LINE CHARGE
-------------------------------------------------------- Chapter 5:1.1
The Marine Corps' $0.229 million request for 25 M68A2 trailer
mounted, practice line charges could be denied because projected
inventories will exceed requirements without the fiscal year 1994
program. Marine Corps officials declined to challenge our excessive
inventory projections and did not agree or disagree with the
potential reduction.
9-MM PRACTICE CARTRIDGE
-------------------------------------------------------- Chapter 5:1.2
The Marine Corps' $0.27 million request for 723,545 9-mm practice
cartridges could be reduced by $0.115 million because projected
inventories will exceed requirements by 308,753 cartridges. Marine
Corps officials agreed.
UNOBLIGATED PRIOR-YEAR
APPROPRIATIONS
---------------------------------------------------------- Chapter 5:2
We have identified $16.793 million in unobligated appropriations for
fiscal years 1993 and 1992 that could be rescinded or used to reduce
the Marine Corps' fiscal year 1994 request because the Marine Corps
has an adequate inventory of the items for which the funds were
provided.
As of September 10, 1993, the Marine Corps had not obligated $6.508
million from its fiscal year 1993 ammunition appropriations for four
items and $10.285 million from its fiscal year 1992 appropriations
for three items (see table 5.2).
Table 5.2
Unobligated Amounts from the Marine
Corps' Fiscal Years 1993 and 1992
Appropriations
(Dollars in millions)
Fiscal Fiscal
year year
Description of item 1993 1992 Total
---------------------------------------- -------- -------- ========
AT-4 light anti-armor weapon 0 $7.130 $7.130
Items less than $2 million $3.476 1.144 4.620
7.62-mm linked armor piercing cartridge 0 2.011 2.011
M58A4 trailer mounted line charge 1.231 0 1.231
M18 series green smoke hand grenade 0.910 0 0.910
M18 series yellow smoke hand grenade 0.891 0 0.891
======================================================================
Total $6.508 $10.285 $16.793
----------------------------------------------------------------------
Marine Corps officials agreed that the Marine Corps does not need the
funds for the items for which the funds were provided but did not
agree that the funds should be rescinded. They said that the Marine
Corps plans to use the $4.62 million in unobligated appropriations
for items less than $2 million for ammunition modernization and the
$12.173 million in unobligated appropriations for the five other
items for 81-mm high explosive mortar cartridges. However, this is
not the purpose for which the funds were provided.
CONCLUSIONS
---------------------------------------------------------- Chapter 5:3
We believe that $0.3 million of the Marine Corps' fiscal year 1994
request is not needed because requested program quantities for two
items are greater than needed. In addition, $6.5 million of funds
provided to the Marine Corps in fiscal year 1993 for four items and
$10.3 million provided in fiscal year 1992 for three items are not
needed because the Marine Corps has an adequate inventory of the
items for which the funds were provided.
RECOMMENDATIONS
---------------------------------------------------------- Chapter 5:4
We recommend that the Senate and House Committees on Appropriations
reduce the Marine Corps' fiscal year 1994 budget request by $0.3
million for two ammunition items. We also recommend that $6.5
million from the Marine Corps' fiscal year 1993 appropriation and
$10.3 million from its fiscal year 1992 appropriation be rescinded or
used to reduce the Marine Corps' fiscal year 1994 request.
MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix I
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
--------------------------------------------------------- Appendix I:1
Thomas J. Schulz, Associate Director
Raymond Dunham, Assistant Director
Christine D. Frye, Evaluator
CHICAGO REGIONAL OFFICE
--------------------------------------------------------- Appendix I:2
Antanas N. Sabaliauskas, Evaluator-in-Charge
Robert Wlodarek, Site Senior
Donald Kittler, Evaluator
David A. Bothe, Evaluator
Timothy L. Clouse, Evaluator
NEW YORK REGIONAL OFFICE
--------------------------------------------------------- Appendix I:3
Karlton P. Davis, Evaluator
*** End of document. ***