United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office National Security and International Affairs Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1995-08-10 monographic deposited born digital 24 p. GA 1.13:NSIAD-95-137 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-95-137 P0b002ee1803a1890 f:ns95137 DGPO 2010-08-12 2011-03-24 GAOREPORTS-NSIAD-95-137 machine generated eng fdlp REPORT GAOREPORTS-NSIAD-95-137 NSIAD-95-137 Inventory control systems Military inventories Procurement procedures Spare parts Medical supplies Defense procurement Reporting requirements Cost effectiveness analysis Defense contingency planning Logistics DOD Supply System Inventory Report Other Written Product NSIAD

GAO reviewed inventory shortages in the Department of Defense's (DOD) secondary, nonweapon inventory, focusing on: (1) the size of the shortages; (2) inventory managers' actions in response to the shortages; (3) whether funding problems caused managers not to buy needed items; and (4) the need for revising DOD inventory reporting.<p/>GAO found that: (1) the September 1991 DOD secondary inventory shortage was $16.4 billion instead of the $26 billion DOD reported because DOD included some Navy nonsecondary inventory items and standard price surcharges for transportation and inventory losses that increased DOD acquisition costs; (2) between September 1991 and September 1993, the shortage decreased to $8.1 billion due to the removal of Desert Storm requirements, military downsizing, elimination of some war reserve requirements, and reduced levels of operations; (3) reorder point shortages were a normal part of the supply system because of continuing demand, but these shortages were rarely due to a lack of funding; (4) inventory managers decided not to order almost one-half of $1.1 billion in reorder point shortages because of invalid requirements, the availability of substitute items, the transfer to other units of certain items, and items being removed from the inventory; (5) in general, these procurement decisions were valid and probably saved millions of dollars, since the items probably would not have been used; and (6) DOD inventory reporting is not based on the amount of inventory needed to be on hand, but rather on reorder points and economic order quantity which can result in excessive inventory. https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-95-137/html/GAOREPORTS-NSIAD-95-137.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-95-137/pdf/GAOREPORTS-NSIAD-95-137.pdf GAO/NSIAD-95-137 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-95-137 Other Written Product GAO/NSIAD-95-137; Defense Inventory: Shortages Are Recurring, but Not a Problem; Inventory control systems Military inventories Procurement procedures Spare parts Medical supplies Defense procurement Reporting requirements Cost effectiveness analysis Defense contingency planning Logistics DOD Supply System Inventory Report Title 31 Section 720 31 U.S.C. 720