Online bidding site helps rid military of surplus
November 4, 2012
YOKOTA AIR BASE, Japan — Need a nuclear-powered guided-missile cruiser? How about 1,758 pairs of knee and elbow pads, a Coast Guard cutter or a mule?
Ten thousand items that once might have gone on the block at live auctions on military bases all over the world now are being listed each week at an online bidding site — govliquidation.com — that has done for military surplus gear what eBay did for stuff that people hoarded in their closets.
In the decade since military surplus sales went online, a publicly traded company that runs the auctions, Liquidity Services, has generated more than a half-billion dollars for the U.S. Treasury, including $180 million in the last year alone.
Ken MacNevin, a spokesman for the Defense Logistics Agency, said it makes sense for the government to sell surplus through a contractor, who is responsible for storing and sorting — and disposing of things that don’t sell.
Items become surplus when military units shrink or are inactivated, when their missions change or when equipment becomes obsolete. In fiscal year 2011, units turned in property to the DLA that originally cost the government $28 billion, MacNevin said.
Surplus can be turned in by units at most locations where U.S. troops train or deploy. Some is sold to foreign militaries. Scrap containing precious metals is recycled. Many items are sent to other parts of the government.
“We are first and foremost involved in reutilization,” MacNevin said.
Military units, federal, state and local governments and some nonprofit organizations can requisition military surplus, which is listed on an electronic database, before it goes to auction. For example, a fire engine turned in a few years ago by the Navy at Sasebo, Japan, was shipped to the Army’s Fort Gordon, Ga., for $18,000, a fraction of the cost for a new vehicle, MacNevin said.
Military surplus can include everything from vehicles to exercise equipment, restaurant supplies, boats, trains, tents, spare parts, scrap metal and musical instruments. Some stuff is used, but other items are still in their wrappers.
In October, people could bid online as low as $50 on lots such as 49 Gerber shovels that cost the government $1,740.97; two StarTrac stationary bikes that originally cost $2,000 each, and a Piper PA-28R Arrow aircraft that the government bought for $50,000.
Tom Burton, president of Liquidity Services’ Capital Assets Group, started out running physical auctions of property confiscated by the U.S. Customs Service from drug dealers in the 1980s. The Ferraris, golf courses and mansions on the block reflected the obscene wealth flowing from the drug trade.
He can still rattle off his auctioneer’s spiel, but there are fewer opportunities today since computers, which never blink or miss a bid, now handle most auctions.
The online auctioneers post 1 million photographs and 12,000 videos of military surplus items on their website each year to provide the most accurate information possible. People can go to warehouses — some as big as 400,000 square feet — to inspect the items, but most just look online, Burton said.
Items can be shipped all over the U.S. or be picked up at various locations. Aircraft parts normally are stored near big Air Force bases, while tents and boots are plentiful near Army and Marine Corps facilities.
It may seem counter-intuitive, but Hawaii has a lot of cold weather gear because troops based there train in Alaska, Burton said.
The most expensive items listed on the website are piles of scrap metal such as copper and nickel that sell for more than $1 million, Burton said.
There are plenty of bargains.
In 2006, a lucky bidder got 442,294 pounds of mixed metals including steel, tank track and wheels with rubber from 29 Palms for $55. Several 86-foot-long, 238,000-pound gun barrels from the USS Missouri were recently auctioned off for scrap, although one was saved for a memorial, Burton said.
Liquidity Services recently sold the USS Long Beach — the world’s first nuclear-powered guided-missile cruiser — which will be cut up for scrap. Its reactors were removed first.
Some items, like ammunition and explosives, aren’t for sale. Others, such as armored vehicles, tanks and helicopters, must be altered, which usually means cut up for scrap, so they don’t retain their military characteristics. After all, no one wants a functional armored vehicle to fall into a drug cartel’s hands.
A hovercraft was sold recently. Even live horses and mules can end up as military surplus. Liquidity Services checks to ensure the animals won’t be mistreated; with that in mind, it films each horse being handed to its new owner.
Rail cars built in 1949 were recently on the block. Surprisingly, some of the other older items, such as trucks from the 1980s, are in great condition with only a few hundred miles on the odometers.
“They’ve been in storage the whole time,” Burton said.
Some former servicemembers look for things they worked with while on active duty, Burton said. One buys blank dog tags that he sells after stamping names on them inside a military surplus trailer he bought online.
Sensitive items, such as large trucks, require buyers to fill out “End Use Certificates” with the planned use. Some countries, such as Iran and North Korea, can’t buy military surplus online, Burton said.
People who want specific items can register for email alerts when they come up for sale.
Henry Williams, a coffee farmer from Hawaii, is an avid online buyer of military surplus items and checks the Web daily for bargains.
In the 1950s, as a boy, he used to go to live auctions with his father, who bought Army Jeeps. Now he has his own fleet of several Jeeps and a Humvee that he bought before the military stopped selling them to civilians a few years ago.
Williams bought a low-mileage 5-ton truck online for $2,600 that he guesses would have cost $30,000 new. He got a massive riding mower that he uses to cut grass on his coffee plantation for $1,200. A collection of ex-military pumps irrigate his land, and surplus generators run equipment.
One of his more unusual purchases was a device used to delouse prisoners of war in Vietnam.
“I’ve got no idea what to do with it,” he said. “I was going to use the engine for something else.”
Doug West recently bought a Coast Guard Cutter, the Blackberry, for $36,500 online. The 65-foot vessel’s large deck and shallow draft makes it the perfect platform for oyster seeding in Chesapeake Bay, even though it was built in 1946, West said.
“They really kept it up well and replaced a lot of steel over the years, so it’s no rust bucket,” he said. “If it’s maintained well, it will last indefinitely.”
Military equipment is particularly popular with hunters and campers, Burton said.
“The Department of Defense is like the largest camping association in the world,” he said, adding that military surplus stores are also regular bidders.
The auctioneers say future sales look strong with plans to withdraw forces from Afghanistan next year and cut the Army and Marine Corps by more than 100,000 troops.