The Senate wants answers from Pentagon officials on why the Defense Department spent more than $754 million last fiscal year on parts it didn’t need.
The Pentagon reduced its “on-order excess inventory” from $1.3 billion in 2009 to $609 million in 2011, but has since regressed, according to a March 11 memo signed by Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla.
“These facts are troubling reminders that the DOD still has a lot of work ahead in its efforts to avoid wasteful spending by better aligning inventory with demand,” the memo stated.
On-order excess parts are “already purchased but likely to be excess due to changes in requirements,” according to the 2013 General Accountability Office’s High Risk Report.
The same report notes that in September 2011, even as DOD was cutting the excess items it was ordering, the department still had $9.2 billion worth of excess inventory in stock.
The senators’ memo called for Alan Estevez, undersecretary of defense for acquisitions, technology and logistics, to explain by April 25 why the inventory amount increased and what steps will be taken to reduce the excess. According to the memo, the Pentagon previously stated that the increases in excess were due to the shrinking budget, which led defense planners to be “more conservative” about canceling orders.
The senators’ assertions indicated that cuts to excess orders would be particularly useful in an era of declining budgets.
“This is another example of how the Department can reduce wasteful spending by simply canceling unneeded orders, using the inventory it has, and freeing up funds for the critical needs of our military,” the memo stated.
The Defense Department’s supply chain management has been included on the GAO’s High Risk Report — a list of areas prone to fraud, waste and abuse — since they began compiling the biannual report in 1990. More than one-third of the government programs placed on the list have been removed since 1990 due to improvement, according to the GAO.
In its 2013 report, the GAO stated that “a number of challenges, including incomplete delivery data for many surface shipments to Afghanistan, have hindered the distribution of supplies and equipment to the warfighter, and will likely continue to affect operations in Afghanistan and limit DOD’s visibility and oversight of the supply chain.”