oversight

Military Clothing and Textiles Required for War Reserves Can Be Reduced

Published by the Government Accountability Office on 1977-01-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          DOC]UMENT RESUE
00089 - [A0751050]
Military Clothing and Textiles Required for iar Reserves Can Be
Reduced. LCD-77-411- B-146858. January 24, 1977. Released
Febr iary 2, 1977. 2 pp. + appendix (9 pp.).
Report to Sen. John L. McClellan, Chairman, Senate committee on
Appropriations; by Elmer B. Staats, Comptrollei General.
Issue Area: Military Preparedness Plans: military Porces
    Readiness (805).
Contact: Logistics and Communications Div.
Budget Function: National Defense: Department of Defense -
    Military (except procurement 6 contracts) (051).
Organization Concerned: Department of Defense; Defense Supply
    Agency; Defens S3upply .;ency; nefense Personnel Support
    Center, Ph.:ladelphia, PA.
Congressional kelevance: Senate Comrittee on Appropriations.
          Department of Defense 'ar reserve requirements for
clothing and textile items were surveyed for fiscal year 1977,
following the submission of lists by the Defense Supply Agency
for all iteas to be procured if the 1977 appropriations were
provided. The Senate Committee on Appropriations subsequently
deleted all of the DSA's clothing and textile requirements.
Findings/Ccnclusiop.: The Defense Personnel Suppcrt Center is
trying to reduce stocks of items for which .here are comaercial
substitutes, but their efforts bave aot completely eliminated
s,--n items from existing stocks or preventeJ the entry of
additional ones into reserve -cocXk.  The Ceter underestimated
the prcduction capability of indus.try to meet moLilization
reeds. Duriuq fia.al year 1976, the Center authorized the
military seL.vicez to return, with full rrimnuresents, $28
million of excess iemss. Tb,, Center has only received $6 million
of these items, aad has not received feedback as to why items
were nct ret.rne.d. Recossendations: Tbi Secretary of Defense
should require -oecificatiou-preparing activi 'ez to identify
cJssercial alte:uatives at thb ti&e of specification
develorsent, and make certain the ULiSC ures the planned
production capabiiity if industries as vwrified ty DSA's
industrial specialists. (RBR)
          REPORT TO THE
          SENATE COMMITTEE ON
°:1       APPROPRLATIONS
  "1'*~, BY THE COMPTROLLER GENERAL
  \.*'   OF THE UNITED STATES

        5.v~~rst%   -     r-ot -f0s .97e rcl?·;r:me   d   0:nf   ?e0      .
                                                                       'Twv   eG;"

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           Military Clothing And
           Textiles Required For War
           Reserves Can Be Reduced
           Defense Logistics Agency
           Department of Defense

           The Deprtnent of Defnse war resere pro-
           gram for clothing and textiles needs improe-
           ment. The reserves of these goods may be
           reduced by better use of the Department's
           industrial preparedness planning program.




           LCD-77411                                                     JAN. 24. 1977
9     /                      WASHIkSiTON. D.C.   20



    B-146858



    The Bjnorable John L. mcClellan
    Chairman, Committee on Appropriations
    United States Senate

    Dear Mr. Chairman:

         In reponse to your requests of Arril 14 and August 16,
    1976, we are reporting on the Department of Defense fiscal
    year 1977 war reserve requirements for clothing and textile
    items.

         On May 24, 1976, we briefed your office on our initial
    findings and provided the Committee with information concern-
    ing the fiscal year 1977 clothing and textile request. We
    pointed out that the Defense Supply Agency's clothing and
    textile request was not supported by a detailed listing of
    individual items which would be purchased if the requested
    funds were appropriated.   (In January 1977, the Defense Sup-
    ply Agency was redesignated as the Defense Logistics Agency.)
    The Committee subsequently requested the Departmert of De-
    fense to provide lists for all the items, inicluding clothing
    and textiles, to be procured if the 1977 appropriations were
    provided. Subsequently, the Committee deleted all of the
    Defense Supply Agency's clothing and textile requirements
    of $95.6 million for fiscal year 1977.

         The results of our work on other matters requested by
    you are summarized below. Additional detail has been pro-
    vided in appendix I.

          -- While the Defense Personnel Support Center is trying
             to reduce war reserve stocks of items for which there
             are commercial substitutes, their efforts have not
             completely eliminated such items from existing stocks
             or prevented entry of additional ones into reserve
             stock.

          -- The Center underestimated the production capability of
             industry to meet mobilization needs.

          -- In fiscal year 1976, the Center authorized the military
             services to return, with full reimbursement, $28 mil-
             lion o£ eycess items. The Center received, however,
             only $6 millic- of these items. The Center has not
             received any i 2dback as to why items were not re-
             turned.
B-146858

     During our review, the military services and the Defense
Supply Agency began to examine their war reserve programs as
highlighted in your August 16, 1976, letter; as a result, we
did not fully analyze the extent to which (1) sets of such
related items as shirts and trousers had similar or dissimilar
quantities (2) established clothing and textile war reserve
stockage levels include appropriate saifety allowances. We
discussed these points with your office end agreed that since
the Department of Defense was examining these matters, further
analyses on our part was unnecessary.
     In agreement with your office, we did not determine if
items scheduled for disposal by the services could have been
better used to satisfy war reserve deficiencie~. because the
Defense Supply Agency was unable to provide the necessary
information at the time we needed it.
     This report contains recommendations to the Secretary of
Defense on page 9. As you knows section 236 of the Legisla-
tive Reorganization Act of 1970 requires the head of a Federal
agency to submit a written statemert on actions taken on our
recommendations to the House and Senate Committees on Govern-
ment Operations not later than 60 days after the date of the
report and to the Souse and Senate Committees on Appropriations
with the agencyJ:   first request for appropriations made more
than 60 days  after  the date of che report. We shall be in
contaet with your office in the near future to arrange for the
release of the report so that t-he requirements of section 236
can be sut in motio.,.
     As instructed by your office, we did not obtain written
comments on our findings and recommendations. we did, how-
ever, discuss our findings with Defense Supply Agency offi-
cials and included their comments where appropriate
                              Sil    ly yours,




                             Comptroller General
                             of the United States
APPENDIX I                                           APPEND'X I

              REVIEW OF THE DEPARTMENT 07 DEFENSE

             FISCAL YEAR 1977 CLOTHING MAD TEXTILE

                     WAR RESERVE REQUEST

     our review of the military services' fiscal year 1977 war
reserve requirements for clothing and textile items was made
in accordance with requests of April 14 and August 16, 1976;
from the Chairman of the Senate Appropriations Committee.
     The Chairman asked us to determine wbether
     -- consideration is given to commercially available sub-
        stitute items and to production capability during the
      .initial mobilization period,

     -- excesses of current needs and items scheduled for dis-
        posal are used to satisfy war reserve requirement,
     -- on-hand items are in proportion to, or balanced with,
        quantities of related items, and
     -- established stock levels include appropriate safety
        allowances.
     We made our review at the Defense Personnel Support Center
(DPSC) in Philadelphia and the Office of the Assistant Secre-
tary of Defense (Installations and Logistics) Washington, D.C.
DPSC is the inventory control point for clothing and textile
items, medical supplies, and food products. As wholesale non-
ager for these commodities, DPSC determines requirements
and procures, stores, and issues the items to the military.
CONSIDERATION OF SUBSTITUTE COMMERCIAL
ITEMS A PRODUCTION CAPABLITY OF IDUSTRY
      The purpose of the commercial alternate item program is
to identify those items which can replace military specifica-
tion items held in war reserve inventories. The ability to
substitute commercial items reduces the quantities of speci-
fication items that DPSC is required to hold to meet. war re-
serve requirements. Currently, the program is emphasizing
the elimination of commercial alternates from existing war
reserve stocks. Also, DPSC has recommended a procedure to
prevent the initial stocking of items having commercial sub-
stitutes as war reserves. 'However, the procedure has not
-been implemented because the specification-preparing activi-
ties are concerned that separate programs would have to be
created which would reqaure additional funds.
APPENDIX I                                        APPENDIX I


Present status of program
     Implementing this program requires the coordination
of DPSC, the Defense Supply Agency Beadquarters, and the mili-
tary services. A committee comprised of officials from these
agencies and from the activities which prepare specifications
(e.g., the U.S. Navy Clothing and Textile Research Facility
and the U.S. Army Natick Research and Development Command)
propose, evaluate, and approve items to be studied to deter-
mine whether they have commercial alternates.
     After a commerial alternate has been accepted and its -'o-
ducers have agreed to supply the qLantities needed to support
initial mobilization, the use of war reserve stocks to satisfy
peacetime requirements is authorized. Withdrawals from these
stocks will be made to the point where the recommended war
reserve stockage levels can be met by the guaranteed commer-
cial alternates and the specification quantities on hand, A.
hypotheticai example of how the commercial availability pro-
gram could be used to satisfy peacetime needs follows.
Recommended mobi-   Producer guaranteed         Required war
lization stockage   commercial quantity       reserve stockage
     600,000                400,000               200,000

Accordingly, any stocks DPSC has in excess of 200,000 can be
used to setisfy peacetime needs.
     As of May 1976, 123 clothing and textile items with a
reduction potential of $92.6 million had been recommended as
candidates for this program by either individual services or
the Defense Supply Agency. A total of 31 items, with a re-
duction potential valued at $8.4 million, had been approved
as of May 1976. Twenty-two items were disapproved as not
meeting the requirements of this program. Tne remaining 70
items were awaiting review by the specification-preparing
activities.
     Examples of, and reasons for, items being disapproved
follow.




                                 -2
 APPENDIX I                                           APPENDIX I

          Item                               Reason
 Cotton polyester white shirt      Ursuitable for summer usage
 Leather work gloves               Unsafe moisture buildup
 Natural cloth mitten              Unacceptable style, lining
                                   is not appropriate
 Mattress cover                    Length and width are less
                                   than specifications, ex-
                                   cessive shrinkage and po-
                                   tential flammability
      The time from proposal to approval of the 31 items ranged
 from 342 to 853 calendar days. According to DPSC personnel,
 the delays were due to problems connected with the procurement
 of sample items and a lack of adequate funds at the
 specification-preparing activities. These activities told
 the study committee that other programs had to be interrupted
 to obtain the necessary manpower and funds. In addation, the
 spe,:ification-preparing activities indicated that after re-
 ceiving the samples, 6 months would be required to evaluate
 the items.
     Recently, the Department of Defense (DOD) has taken steps
emphasizing the program's importance to the services. Thesed
include:
     1. Preparation of a DOD directive formalizing the commer-
        cial alternate concept and providing procedural ouid-
        ance. The directi7e is in the final coordination
        phase.
     2. Extension of the commercial alternate concept to com-
        modities other than clothing and textiles.
Proposed new concept
      In May 1976, the committee of agencies involved with the
 program considered when a commercial alternate should be
 evaluated for a specification item. DPSC suggested that a
 commercial alternate should be considered at the time the
 specification iLw_ is introduced into the supply system. The
 committee, however, voted that the current program be con-
ltinued, whereby DPSC identifies selected items already in war
 reserve inventories to be studied for commercial alternates.
 A Natick Laboratory representative told us. bhwever, that to do
 what DPSC recommended would go beyond Natick's current re-
 search and development role and would be too costly.
APPENDIX I                                         APPENDIX I

     Under DPSC's proposal, items with commercial alternates
would not be stocked to meet war reserve requirements.
     DPSC's proposal also would enable the Defense Supply
Agency to comply with DOD Directive 3005.5 which explicitly
prohibits the selection and subsequent stockage of items as
war reserves that are 'normally available from commercial
sources in sufficient quantities and in the time required
to meet wartime military needs." Also, it would permit DOD
to establish procedures to implement, if necessary, an Of-
fice of Management and Budget memorandau dated May 24, 1976,
which stated:
     "The procuremert and supply processes of the execu-
     tive branch must be thoroughly examined and appro-
     priate revisions made with the objective of imple-
     menting ,:he folloving policy: The Government will
     purchase commercial, off-the-shelf products when
     such products will adequately serve the Government's
     requirements, market acceptability, and the Govern-
     ment will utilize commercial distribution channels
     in supplying commercial products to its users.'"
     DPSC's recommendation had not been implemented as of
December 1976. The Defense Supply Agency has. however, agreed
to resubmit the proposal to the study committee for further
discussion in January 1977.
PRODUCTION CAPABILITY
     To fully support the military service:s needs during an
emergency, the total stocks available on mobilization-day
(M-day) must be adequate to meet the demand until sufficient
deliveries are received from production. DOD has an Indus-
trial Preparedness Planning Program which evaluates the
private sector's production potential to meet military re-
quirements during wartime. The more quickly deliveries can
be made from production in the post M-day period, the lower
the stockage needed on M-day. Mcbilization requirements
that cannot be supported by industry, less on-hand stocks,
represent DPSC's mobilization-acquisition objective and its
mobilization-funding deficit.
      DPSC, until the fiscal year 1978 computation, had been
 using only the quantities the contractor had agreed to furnish
 to reduce clothing and textile mobilization requirements.
 Defense Supply Agency Headquarters on October 6, 1975, di-
-rected DPSC to use the quantities contractors had estimated
 they could produce with existing facilities, to offset mobi-
lization reauirements to a greater degree.

                              A.
APPENDIX I                                         APPENDIX I


     A Defense Supply Agency audit at the Defense "onstruc-
tion, Electronics, General, and Industrial Supply Centers,
dated December 22, 1975, concluded that the objective of the
 Industrial Preparedness Planning Program review is to iden-    -
 tify production which could supply the entire mobilization
 requirement. Any increase in the production capability up to
 the amount of the requirement reduces the acquisition objec-
 tive and the amount of funds needed for war reserve stocks.
     This report further concluded that the acquisition objec-
tives at the centers had been computed at the current fiscal
year's mobilization requirement an! production capability
data had been developed on the basis of prior fiscal years'
mobilization requirements. By this methoc, the acquisition
objective can be overstated when current requirements have
increased and production capability is still based upon prior
years' requirements.
     The Defense Supply Agency auditcrs also determined that
by using the contractor's estimate of quantities he can pro-
duce from existing facilities rather than the quantities
agreed on to meet prior years' requirements, the amount of
funds needed for reserve stocks would be reduced substanti-
ally. They recommended that the DSA's centers use maximum
production capability in computing the acquisition objectives
The Defense Supply Agency Headquarters concurred and cited
its memorandum of October 6, 1975, as a means of implementing
the recommendation.
      DPSC personnel informed us thbt the same situations
 noted at the Defense Industrial Supply Center and the Defense
 Electronics Supply Center also exist at DPSC. Fiscal year
 1977 mobilization requirements were offset by 1976's allow-
 cated production rather than 1977's maximum attainable pro-
 duction.
      To determine what effect these situations had on DPSC's
 computation of its fiscal year 1977 mobilization-funding de-
 ficit, we randomly selected for review 15 of the 261 clothing
 and textile items included in DPSC's Industrial Preparedness.
 Planning Program. Using fiecal year 1977 maximum production
 capability, we computed the 1977 mobilizat1¢n-funding deficit
 for these 15 items. Our computations showed that DPSC, by
 using allocated production rather than maximum current pro-
.duction capability, had overstated the mobilization-funding
 deficit for these 15 items by $12,465,194.
APPENDIX I                                        APPENDIX I


Fiscal year 1978
     Not only was DPSC's fiscal year 1977 mobilization-funding
deficia overstated, we found that the fiscal year 1978 deficit
was also incorrectly computed. DPSC extended the time when
the contractor's projected production would be available by
as much as 4 months, even though the production schedules were
verified by the planning officers of the Defense Contract Ad-
ministration Service and agreed to by DPSC. DPSC contended
that it could not use industry's maximum attainable produc-
tion data as shown because it did not feel the designated
quantities c-Iuld be obtained in the specified time.
     The objective of the Industrial Preparedness Planning
Program is to reduce the mobilization acquisition objective,
or mobilization-funding deficit, as much as possible. How-
ever, DPSC, by extending projected production availability
from 1 to as much as 4 months, has in effect increased the
mobilization-funding deficit for clothing and textile items.
     We brought this matter to the attention of DPSC offi-
cials, who in turn referred the matter to Defense Supply
Agency Headquarters. Headquarters instructed DPSC to contact
the applicable planning officer, resolve any differences of
opinion between the planning officer and DPSC, and take cor-
rective actions where applicable. Although the DPSC's re-
evaluation has been completed, the results were still being
validated by the Defense Supply Agency Headquarters, at the
completion of our review.
CONSIDERATION OF EXCESSES
     Under current procedures, various customers offer their
excess material (with a unit ;vlue of Ltore than $7) to DPSC
for return and possible credit. DISC on the basis of current
stock balances, acquisition objectives, and obsolescence data,
determines whether the material will be accepted for return
and, i- so, whether credit will be given.
     A Defense Supply Agency study in'fiscal year 1975 on
material returns stated that returns generally result from
"clean-up" campaigns, shipment mistakes, mission or program
changes, and allowance modifications.
     For fiscal year 1976, DPSC authorized the return, with
credit, of $28 million of clothing and textile items. How-
ever, only $6 million of this material was actually returned.


                             -6
APPENDIX I                                                APPENDIX I


                   COfered     Aeturned          Not returned
Service              ealue      value        Value      Percentage
Armsy            $17,584,317   $3,659,513   $13,924.804         79
kir Force          7,441,101   1,428,739      6,012,362         80
Marine Corps       1,033,594      309,652      723,942          70
Navy               2,103,626      970r936    1,132,690          53
        Total    $28 162,638   $6 368840    $21 793 798         77
     DSA regulations do not require the customer to justify
why returns are not made. We examined several ncnreturns but
were unable to identify specific reasons why offered materials
were not returned.
BALANCING OF CLOTHING
AND TEXTILE ITEMS
     We analyzed several sets of related clothing and textile
items, including undershirts/undershorts and trousers/shirts,
and found that the requi- ents were not the same for any of.
the sets. According to D,.SC personnel, some of the reasons
for the varying requirements are the dissimilar needs of com-
bat troops (e.g., undershirts are issued to men and women but
drawers are only issued to men) and the different wearout as-
sumptions used by the services (e.g., trousers wear out faster
than shirtr).
         Officials within the Office of the Assistant Secretary of
Defense (Installations and Logistics) are currently analyzing
each service s mobilization-computa ion requirements to deter-
mine the validity of the services' differences relating to
sets of items. Your August 16, 1976, letter stated that you
did not want us to duplicate DOD's efforts in this area. As
a result, we did s4ot determine if the different assumptions
used by the services were logical.
SAFETY ALLOWANCES
     The military services furnish DPSC their individual cloth-
ing and textile war reserve mobilization needs. DPSC computes
a DOD-wide clothing and textile mobilization requirement in-
corporating each service's needs. The computation includes z
safety level for each item, depending on its classification.
An item is classified in various wajs, such as initial issue
to troops at time of induction (referred to as a bag item),
a sized item (shoes or clothes), or a nonsized item (canteens,
etc.). The safety level in DPSC's computa:tion will vary from

                                  7
APPENDIX I                                          APPENDIX I


30 to 75 days' stockage, depending on the item's individual
classification. The inclusion of a safety level by DPSC in-
creased its fiscal year 1977 war reserve requirement for
clothing and textile items by $151 million. The rationale
for a mobilization safety level is to compensate for any
fluctuation in demands during mobilization.
     An analysis of each service's mobilization computations
would be required to determine if established clothing and
text:ile war reserve stockage levels include appropriate
safety allowances. we did not examine the use of safety
levels as it would duplicate DOD's current efforts in this
area.

CONCLUSIONS
     DPSC has recommended a procedure to prevent the initial
stocking of items having commercial substitutes as war re-
serves. The Center would no longer be required to purchase,
maintain, and store the item in war reserve invc tory since
approved commercial alternates would already be identified.
This procedure would not only reduce inventory handling costs
but would allow the DPSC to better invest its limited was re-
server funds in more essential items. Procedures can be de-
veloped whereby the specification-preparing activities would
not have to examine every new item for commercial alternates,
but would examine only those with the most potential. The
procedure would also permit 3OD to comply with an Office of
Management and Budget memorandum which stipulates that com-
mercial off-the-shelf products be purchased if they adequately
serve the Government's requirements.
     DOD Loh a program to identify industry production support
needed after mobilization-day in order to reduce the need for
large quantities of reserve stocks.     DPSC, however, has not
effectively implemented this program.     DPSC is not offsetting
mobilization requirements as instructed and is overstating
the mobilization-funding deficit for clothing and textile
items.
     Only a small amount of rmterial authorized by DPSC for
return is actually being returned by the services. Defense
Supply Agency regulations do not require the customer to jus-
tify why returns are not made, and we were unsuccessful in
Ascertaining specific reasons why materials offered are not
being returned.
APPENDIX I                                         APPENDIX I



RECOMMENDATIONS

     we recommend that the Secretary of Defense:

     -- Require specification-preparing activities to iden-
        tify commercial alternates at t,~e time of specifica-
        tion development. Study should be limited to those
        which appear to have the most ;ptential for commercial
        substitutes.
     -- Make certain DPSC uses the planned production capabil-
       ity of industries verified by the Defense Supply
       Agency's industrial specialists. If there is any dis-
       agreement, DPSC should contact the industrial special-
       ist for clarification.
     -Fully evaluate the clothing and textiles program to
       determine what improvements are needed at the military
       services to make certain that excesses are returned.