DEFENSE INVENTORY: Approach for Deciding Whether to Retain or Dispose of Items Needs Improvement
GENERAL ACCOUNTING OFFICE WASHINGTON DC
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As of September 30, 1999, the Department of Defense reported 1 that it owned about 64 billion of secondary inventory 2 and that, of that amount, components have determined that about 9.4 billion is more economical to retain than to dispose of and possibly need to repurchase. We previously reported that 39.4 billion about 60 percent of the Department s 65.8 billion secondary inventory as of September 30, 1997, exceeded operating requirements and that the Department s cost of operations could be reduced by disposing of inventories if it was economical to do so. 3 Through disposal, the Department eliminates some storage costs and the government recoups a small fraction of an item s purchase price. However, if stock is disposed of before it is economical to do so, inadequate supplies of the item could reduce readiness and costly repurchases might be necessary.
- Logistics, Military Facilities and Supplies