DEFENSE DIVISION ~-16347.8 II 3 Dear o Seeretav: B Our recent rev%ew of the material utilization prograsn at the J Defense Logist%cs Services Center (DISC) and f%ve imentory con- ::->r:"/ trol po5xts showed that substantial imprcmments have been achieved since our last rexdew in 196Be Inventory control points are 2mprov- Brag the accuracy of Iufomation reported to DISC aud are advistig IX-SKh-on a more timely bas%s-- of material accepted, rejected, and shzipments denied. aping ftscal years 1969 - 1.971, material valued at $173 milliona was transferned withIn and betweeu serv%ees under the cen- tralized screeM.ng program. In 1969, matedah transferred was val- ued at $5l.9 mzUfon, while in 1971 ft had increased to $68.1tillion. !iW.s represents an increase of about 3l. percent. however, we belleve the program could be more effective if I&SC were to screen regtirements for the Defense Supply Agency (ISA) as it t3oes for the other military activities. We believe the fnclusiou of ESA reqltiremeuts under the centralized screening program would eliminate the meed for separate screen&ngs now petiomed by TEA centers e During OUT revdew, we noted that actions taken by the Army and .' :. Air Force have oved the amuracy of the 5nfomation they are re- ?:' portLl.ng to Jlrxsc. On the other hand, we noted that the Navy has not 4- 4 Improved the accuracy of its iuformation. We are advlsdng you of these matters so that needed management attent%on WEU be given to them to further Increase the effectfve- ness of the matertil utilfzatiou program. As a meaus of more effectively determiniplg whether material was available 5x1 oue servfce to satisfy the need of another service, 50TH ANNIVERSARY 1921- 9 DGDassigned IKSC the responsibility of establishing, operating, and mabta%8lhg a centralized screentig program, Under thk screen%ng program, each milrH$ary service kvemtory control pofnt Informs T&SC regarding material. ft needs and assets available for transfer, From that &nformation, '&SC detexm%nes whether tmsfers of material can be made and notU’fes the organization that needs mater%1 where it can obtain It. Tixms In certatn federal supply classes have been assigned for sole management to des ted EEA centers. 'Hhose ?EA centers nor- mally have the canplete bformahtiolz on defense-wide reqtirements and avaflabU.ity of stock for those Pkms without resorting to a special screening programd However, as early as 1966, EBA recognized that assets supposedly under tts sole management were being reported to the I&SC screen3ng program by m%l8tary service inventory contx?oP points. To preclude concurrent buy%ng and selling of those assets, ESA set up a system whereby assets reported for centralized screening are reviewed to determine whether they have been assigned for sole management. Assets thus identiffed are reported to the applicable DA center where they are screened to detemzine whether they are needed. This double screening has Increased the use of excess material. For example, %n 1970 the I&SC screentig process id.entWLed over $l millfan wotih of assets whtch were needed by one DSA center to meet its re- qutiements 0 The BLSC screentig paeogram is operaking effectively for the Army, Navy, ATr Force, and rine Corps and could be just as effective’ for the IEA centers 3.f they reported thefr requirements to I&SC. Inclu- sion of E3A center regtiements in the DISC screen%ng program wofid eH.d.nate the need for the double screening. B 1968, we reported that ormation suhm3tted to I&SC was not always accurate. Our current review showed that the Army and Air Force activB=3es are now report%ng more dependable data, but the Havy is not. Because of %ts Waccwkate S.nform.t%on, the Navy $n fiscal year 1969 was unable to sh%p 68 percent of the dollar value of reqtis5.tions received for assets they had repotied to I&SC as available for transfer. In fiscal year 19'7l., the &v-y was unable to sh%p 80 percent of %ts reqti&.t%ons. _-. L 3 ~-163478 The Navy's inability to fill requisitions was due in large part to inaccurate asset and requirements data reported by the Navy Aviation Supply Office (ASO). Some of the data were submitted to DLSC even though they were known to be inaccurate, Other data were considered by AS0 officials to contain such errors that they were withheld completely from DLSC. Inaccurate information results in the reporting of incorrect quantities available for redistribution and misleading data regard- ing needed material,, We believe that the Navy should place increased emphasis on submitting accurate data to DLSC, We believe that the inaccurate information submitted by AS0 re- sulted in part from its failure to maintain historical records which are necessary for adequate management. ASO's computerized supply system is designed to operate on a real-time basis, and provisions have not been made for maintaining readily available historical files. Once a decision has been made and the records updated, the basis for the decision is lost, No historical record has been provided for determining whether any action was taken, whether the action taken was appropriate, or whether the action was based on accurate data. In our opinion, historical records are essential in any supply system because an item's past activity is the principal basis for projecting future requirements, Moreover, without these data, AS0 management cannot adequately evaluate how effective they have been in carrying out their assigned mission. RECOMMiiXDATIONS .r We recommend that you require DSA centers to submit their needs '27 to DLSC for screening under the centralized screening program. To hold offer rejects and shipment denials to a minimum, we recommend that the Navy be directed to place greater emphasis on improving the accuracy of data submitted to DLSC, In addition, we recommend that AS0 incorporate in its computer system the capability to main- tain historical data. The above recommendations are subject to the provisions of Section 236 of the Legislative Reorganization Act of 19'70. We will appreciate receiving copies of the statements you furnish the specified committees in accordance with these provisions. If you desire, we will be glad to discuss these matters in greater detail with you or with your staff. -3- . - ~-163478 Copies of this letter are befng sent to the Secretaries of the Army, Navy, and A%r Force, and to the Director, Defense Suprply Agency. Sincerely yours, Director The ffonorable The Secretary of Defense BESTDOCUMENT AVAIABLE
Review of the Material Utilization Program at the Defense Logistics Services Center
Published by the Government Accountability Office on 1971-10-06.
Below is a raw (and likely hideous) rendition of the original report. (PDF)