Excess Personal Property: DOD Should Further Reassess the Priorities of Its Disposal Process
Published: 2016-01-29T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Each year the military services identify thousands of items of personal property—including military equipment and materiel—that they need to dispose of because it is obsolete, not repairable, or excess to their requirements. For fiscal year 2014, DOD reported that excess and surplus property with a total original acquisition value of approximately $3.18 billion in nominal dollars was reutilized, transferred, or donated. DOD reported total revenues of almost $128 million from items sold in fiscal year 2014.
Congress included provisions in reports accompanying legislation for GAO to review DOD's current process for disposing of excess personal property. This report (1) describes the process for disposing of DOD's excess personal property in the U.S.; (2) assesses how DOD's priorities in its disposal process affect the distribution of excess property; and (3) assesses the extent to which DOD has encountered challenges in its capacity to manage excess personal property to be processed. GAO reviewed guidance; obtained the most recently available calendar year (2013-2014) data on property obtained by law enforcement agencies, wait times, and backlogs; and interviewed cognizant officials.
section_title: What GAO Found
paragraphs: Disposing of Department of Defense (DOD) property that is excess to a military service's needs is a multi-stage process, executed by the Defense Logistics Agency (DLA). The process includes a 42-day period during which potential recipients may screen, request, and obtain excess property at the stages in which they are eligible to do so (see figure). First, usable property may be reutilized within DOD or provided to special programs (such as the program that provides excess DOD property to federal, state, and local law enforcement agencies) identified in statutes or by DOD. If not reutilized, this property may be transferred to federal civilian agencies, after which it becomes surplus and may be donated to other parties, such as state governments. Remaining property may be sold to the general public, if appropriate and safe, or rendered useless for its original military purpose (demilitarized) and sold as scrap or destroyed.
Overview of DOD's Disposal Process
The priorities outlined in DOD's disposal process guidance place special program recipients in the first stage of the process (reutilization) versus the later stages (transfer or donation), giving some non-federal entities priority for excess property over some federal civilian agencies that may have similar needs. For instance, in calendar years 2013-2014, the special program for law enforcement agencies mentioned above provided 150 of those agencies with 285 pieces of earth-moving and excavating equipment, while at least 9 federal agencies also purchased equipment in this category for their mission needs. GAO could not definitively conclude that any specific item provided to state or local law enforcement agencies would have filled the need any federal agencies met using appropriated funds for new procurement, but the possibility exists. In October 2015, DOD revised its process so that DOD components will obtain its excess property before special programs. Still, special programs could obtain such property before most federal civilian agencies and non-federal entities. DOD is not planning to further assess its priorities to see if additional changes may be needed in the priorities of property recipients. Thus, the risk remains that federal agencies could spend federal funds to procure property that they might have been able to obtain through the DOD disposal process.
DLA Disposition Services faces challenges processing excess property that has been turned in for disposal. DLA has established goals for processing times and modified some of its practices for processing this property, but some military customers still face long waits to turn in property and thus may incur costs for moving, storing, and maintaining property they no longer need. DLA officials said they plan to study this issue to identify and make needed improvements.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOD further reassess its disposal process to determine whether additional changes are needed in the priorities of recipients within the process and revise its guidance reflecting those priorities, accordingly, to better fulfill the disposal program's objectives. DOD concurred with the recommendation.

section_title: Letter
paragraphs: Each year the military services identify thousands of items of personal  property—including military equipment and materiel—that they need to  dispose of because the property is obsolete, not repairable, or excess to  their requirements. Because this property was originally purchased with  federal funds, the government seeks to promote its reuse by federal  agencies to minimize new procurement costs. Personal property that is  not reutilized by another Department of Defense (DOD) organization or a  special program becomes excess to DOD and may be transferred to  other federal agencies. Remaining excess personal property becomes  surplus when it is no longer required by federal agencies and may be  donated to other parties, such as state and local governments; sold  through a commercial vendor, if it is appropriate and safe to be sold to the  general public; or demilitarized (i.e., rendered useless for its originally  intended military purpose) and sold as scrap or destroyed. For fiscal year  2014, DOD reported that excess and surplus property with a total original  acquisition value of approximately $3.18 billion in nominal dollars was  reutilized, transferred, or donated. DOD reported total revenues of  almost $128 million from items sold in fiscal year 2014. In our body of  work on federal debt and long-term fiscal challenges, we have reported  that the federal government is facing serious long-term fiscal challenges,  and DOD and other federal agencies will likely encounter considerable  budget pressures over the coming years. This makes it potentially  attractive for DOD and other federal agencies to obtain usable personal  property that is already in the federal inventory, rather than procuring  similar new items. State and local governments face similar fiscal  pressures, and obtaining federal surplus property assists those non- federal recipients in offsetting budgetary shortfalls.
The Joint Explanatory Statement accompanying the National Defense  Authorization Act for Fiscal Year 2014, Pub. L. No. 113-66, included a  provision for us to study DOD’s process for disposing of excess personal  property. The House Armed Services Committee Report (House Report  113-446) accompanying H.R. 4435, the National Defense Authorization  Act for Fiscal Year 2015, also included a provision for us to review  aspects of DOD’s and the Defense Logistics Agency’s (DLA) excess and  surplus personal property programs. This report (1) describes the process  for disposing of DOD’s excess personal property in the United States; (2)  assesses how DOD’s priorities in its disposal process affect the  distribution of excess property; and (3) assesses the extent to which DOD  has encountered challenges in its capacity to manage excess personal  property to be processed.
To describe DOD’s process for the disposal of excess personal property  in the United States, we reviewed key documentation, such as the  Defense Materiel Disposition Manual, to identify the guidance DOD  provides to DLA Disposition Services and DOD components on the  disposal of excess personal property. We met with officials from the  Office of the Assistant Secretary of Defense (Logistics & Materiel  Readiness), DLA Headquarters, DLA Disposition Services Headquarters,  and 5 of the 80 disposition sites in the United States to identify the  specific priorities, systems, processes, and controls DOD uses to dispose  of excess personal property. We selected the disposition sites based on  the types of excess property they process, support provided to each of  the four military services, and locations in two of the three Disposition  Services Directorates that oversee the disposition sites in the continental  United States. The information we obtained from these five disposition  sites offers insight into the manner in which the process was implemented  at those specific locations, although it is not projectable to DOD’s entire  disposal process. We also met with supply and logistics representatives  from each of the military services and reviewed key service-specific  guidance documents to determine how the services implement DOD  guidance and the processes they establish to turn in their excess property  in the United States. In addition, we met with officials from the General  Services Administration (GSA) to gain an understanding of the overall  federal system for disposing of excess property, including government- wide policies in general and DOD’s disposal process in particular. We  looked in more detail at two of the special programs through which certain  qualified organizations are authorized to receive excess DOD property— the foreign security assistance program and the program that provides  excess DOD property to federal, state, and local law enforcement  agencies (called the “1033 program,” for the section of the law that  authorizes it)—to illustrate how these programs fit into and reflect the  priorities in DOD’s disposal process. We selected the foreign security  assistance program because DLA Disposition Services has different  processes to manage excess property for this special program, and we  selected the 1033 program because, among the special programs, it  receives the largest proportion of DOD excess personal property in terms  of original acquisition value.
To assess how DOD’s priorities in its disposal process affect the  distribution of excess property, we reviewed key guidance, manuals, and  policies; legal authorities; and reports and other documents related to the  disposal process and met with officials from DLA’s Disposition Services  Headquarters. We met with officials from U.S. Customs and Border  Protection to get the perspectives of a federal agency on DOD’s disposal  process. We selected this federal agency because of its border security  mission and its interest in obtaining DOD excess personal property. We  also obtained detailed data on DLA Disposition Services transactions  from the 1033 program for 2013 and 2014—the most recent full calendar  years for which data were available. We analyzed these data to identify  classes of items that were obtained by state and local law enforcement  agencies; however, we did not review the justifications for individual  property requests—including how those requests were verified by DLA  Disposition Services personnel—because the purpose for which  recipients planned to use the property they obtained and the ultimate  disposal of such property were outside the scope of this review. To  identify situations in which federal agencies may have purchased property  similar to that obtained by law enforcement agencies, we reviewed  publicly available government procurement data for the same time frame;  however, we did not review signed contract language, determine whether  donated property would have been suitable for the needs of the  purchasing agency, or confirm that the purchased equipment had been  delivered. Finally, to identify processes that states follow and potential  challenges that state recipients face in obtaining excess and surplus DOD  personal property, we met with officials from four states who are  responsible for managing either the 1033 program to support law  enforcement activities, the Federal Surplus Personal Property Donation  Program, or both programs for their states. We selected these states  based on their proximity to DLA Disposition Services disposition sites,  their status in the 1033 program, whether the 1033 program coordinator  also serves as the surplus coordinator, and whether the surplus  coordinator serves as an officer or committee member of the National  Association of State Agencies for Surplus Property. Although the views  of officials from these states are not generalizable to all states, they  provided insights into the types of challenges faced by non-federal  organizations involved in the disposal process.
To assess the extent to which DOD has encountered challenges in its  capacity to manage excess personal property to be processed, we  obtained from DLA Disposition Services available data and management  briefings on the amount of time it took for military service customers to  schedule an appointment to turn in their excess property and for DLA  Disposition Services staff to process the property at disposition sites in  the United States. We requested this information for calendar years 2013  and 2014, to obtain data for the two most recent calendar years, and  analyzed it to gain an understanding of customer wait times and any  backlogs at each of those sites. We also met with DLA officials at the  selected disposition sites to discuss challenges they face in disposing of  excess personal property, actions they have taken to address those  challenges, and what resources are available to enable them to perform  their property disposal functions. Additionally, we toured the sites and  observed their disposal operations to understand the challenges  associated with multiple types of operational structures and the effect that  an increase in the amount of property to be processed could have on the  sites’ operations. Finally, we met with officials from each of the services to  identify challenges their units encounter in turning in or managing their  excess personal property for disposal.
We conducted this performance audit from April 2014 to January 2016 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. Appendix I contains additional  information about our scope and methodology.
subsections: section_title: Background
subsections: section_title: DOD’s Process for Turning in Excess Personal Property
paragraphs: According to DOD’s guidance for disposing of its excess personal  property, the objectives of the defense material disposition process are to  dispose of the property in a manner that ensures maximum use to satisfy  valid needs, permits authorized donations of surplus property, obtains  optimum monetary return to the U.S. government for property sold, and,  among other things, minimizes the need for abandoning or destroying  property. In order to reutilize excess and surplus property before  initiating repair or new procurement, DOD components are to screen  available excess property for those assets which could satisfy their valid  needs. DLA’s Disposition Services executes the disposal of DOD’s  personal property. DLA Disposition Services receives, classifies,  segregates, demilitarizes, accounts for, and disposes of personal property  that has been identified as “excess” to the military services’ needs. Before  a military service determines that property it holds is excess and turns it in  to Disposition Services, it may reallocate the property within the service,  return it to a DLA distribution depot, sell it to a foreign government, or sell  it or trade it in for property of the same type through the exchange/sales  program.
section_title: Laws and DOD Guidance Defining DOD’s Disposal Process
paragraphs: The Federal Property and Administrative Services Act of 1949, as  amended, established GSA to, among other things, manage surplus  federal property. The act authorizes the administrator of GSA to  delegate surplus property management to the heads of other federal  agencies, and the administrator has delegated management of DOD’s  surplus property to the Secretary of Defense. DOD’s process for  disposing of its excess personal property has changed over time as new  laws have introduced eligible recipients in addition to DOD components  and other federal agencies. Each new law allowed DOD discretion over  the manner in which it implemented its disposal process with respect to  new recipient programs, to include giving preference to non-federal  special programs over some other federal agencies in claiming excess  personal property. As shown in figure 1, subsequent laws have provided  the Secretary with authority to reutilize, transfer, donate, or sell DOD’s  excess personal property to entities other than DOD components or  federal agencies. For example, the Department of Defense Authorization  Act of 1986 authorized the Secretary of Defense to make available  excess nonlethal supplies from DOD stocks for humanitarian relief  purposes to eligible foreign countries and international organizations.  Similarly, the National Defense Authorization Act of Fiscal Year 1997  authorized the Secretary of Defense to transfer DOD’s excess personal  property to federal and state agencies through what is now known as the  1033 program. Appendix II provides additional information on DOD’s 12  current special programs, including the foreign security assistance and  1033 programs, which enable certain federal, state, or local  organizations; nonprofit organizations; and selected foreign countries to  receive DOD excess personal property.
section_title: Demilitarization of Excess Property
paragraphs: DOD’s policy is to identify any property that has a significant military or  commercial technology application and control that property to prevent  improper use. The military services assign demilitarization codes when  property enters the DOD supply system, and DLA validates the accuracy  of these codes when the property is turned in after being identified as  excess. These codes indicate whether the property is available for reuse  without restriction or whether specific restrictions apply, such as removal  of classified components, destruction of sensitive military technology, or  trade security control. DOD has procedures for demilitarizing such  property, some of which may be screened for redistribution. The DOD  Inspector General recently reported on inaccuracies in the initial  assignment of demilitarization codes, noting that improper coding of  property can result in an increased risk that sensitive military technology  could be accidentally released to unauthorized individuals or in DOD  spending unnecessary funds by over-controlling items that do not require  demilitarization. DOD concurred with the recommendations that the  Assistant Secretary of Defense for Logistics & Materiel Readiness revise  demilitarization guidance, establish metrics, and require the military  services to revise their respective demilitarization guidance and establish  controls.
section_title: Prior GAO Reviews of DOD’s Disposal Process
paragraphs: We have previously reported significant issues with DOD’s program for  the reutilization of its excess personal property. In 2005, we made 13  recommendations to improve the overall economy and efficiency of  DOD’s reutilization program, including recommendations for better  coordination between the predecessor to DLA Disposition Services (the  Defense Reutilization and Marketing Service), DLA, and the military  services with regard to data reliability and strengthened management  oversight, accountability, and physical inventory control. Since that  review, DOD has implemented all 13 recommendations and made some  improvements to its disposal process, including developing written  guidance and formal training to assist Disposition Services personnel and  the military services in the proper assignment of condition codes for  excess property being turned in. Additionally, in June 2014, in a review of  DLA’s inventory management, we found that, in fiscal year 2013, DLA  disposed of $855 million in items that its economic analyses determined  should have been kept because there was risk that DLA would need to  buy the same items again in the future. To ensure that DLA does not  dispose of inventory that it would be more economical to keep, we  recommended that it reassess and, if appropriate, revise its inventory- reduction goals and schedule in a way that minimizes the risks and costs  of having to buy items again. As a result of our recommendation, in July  2014 DLA conducted and documented a re-examination of its on-hand  inventory reduction goal for fiscal year 2014 and revised its on-hand  inventory goal for fiscal year 2014. DLA’s adjustment to its goals resulted  in less inventory needing to be disposed of to meet the goals, which  reduced the risk that DLA might have to buy the same inventory again in  the future.
section_title: The Process for Disposing of DOD’s Excess Personal Property Involves Several Stages and Provides Multiple Opportunities for Recipients to Obtain Property
subsections: section_title: The Process for Disposing of Excess Personal Property in the United States Involves Several Stages
paragraphs: There are several stages in the process for disposing of DOD’s excess  property in the United States. When a DOD component has identified  property that it no longer needs, and there is no valid requirement for the  property elsewhere within that component, it turns the property over to  DLA Disposition Services. The redistribution of such property to other  DOD components, special programs, federal agencies, and states helps  to conserve the budgetary resources of those recipients. As DLA  Disposition Services receives excess personal property, it holds the  property for processing (i.e., screening, verifying, demilitarizing, and  downgrading) and enters information about the property into its inventory  management system—the Distribution Standard System—and its  website, from which DOD components are able to screen property that  could satisfy their requirements. Once excess property has been turned in  by a service or other DOD component and processed by DLA Disposition  Services, DOD’s disposal process redistributes it in one of three ways— by reutilizing the property within DOD or, in certain other organizations,  through special programs; transferring the property to other federal  agencies; or donating the property to state and local agencies or other  organizations—before ultimately selling or destroying it if it is not claimed  by a qualified organization. Figure 2 illustrates this process.
Once usable property is identified as excess, turned in by a service or  other DOD component, and received by DLA Disposition Services, it is  disposed of through DOD’s “Reutilization, Transfer, Donation, and/or  Sale” process. DLA officials explained that, in accordance with DLA  guidance and policy, the disposal process is a four-stage process that  includes 42 days (known as the “screening cycle”) during which potential  recipients may screen, request, and obtain excess property at the stages  in which they are eligible to do so, after which any remaining property  may be sold. The property may spend a specific number of days in each  stage, as identified in figure 3. If the property is not disposed of during  one stage of the cycle, it moves on to the next stage. We discuss the  disposal process in more detail in the sections that follow.
section_title: The Disposal Process Allows Multiple Opportunities for Potential Recipients to Obtain Property
paragraphs: DLA Disposition Services reallocates excess defense property during the  42-day disposal screening cycle that begins when Disposition Services  receives the property and records the property in its accountable records.  Potential recipients can obtain excess or surplus property at different and,  in some cases, multiple stages of the cycle. DLA Disposition Services  restricts the number of days during which specific organizations are  allowed to screen property they may wish to obtain, either onsite or  electronically on its website. According to DLA Disposition Services, a 7- day accumulation period precedes the 42-day disposal screening cycle.  DLA Disposition Services officials stated that DOD components and  special programs, including law enforcement agencies participating in the  1033 program, were allowed to screen and request property during the  accumulation period. Each stage of the disposal process—reutilization,  transfer, donation, and sales—is described in more detail below.
Reutilization (first stage–days 1-14). After a service or other DOD  component has turned in excess personal property, DLA Disposition  Services posts information about that property on its website, called RTD  Web, where DOD components can screen and determine whether to  request it. Although it is not required by law or regulation, DOD allows  special programs to screen and request this property at the same time.  Officials from DLA Disposition Services told us that property requests  made through its website are processed nightly; however, while any  special program may screen and request excess property from the first  through the fourteenth day of the disposal screening cycle, there is no  guarantee that the program will receive the property. DOD components  and other organizations can specify their excess property needs on a  “want list,” and DLA Disposition Services’ website will automatically send  notices when such property becomes available. Those components and  other organizations may then screen the property on DLA Disposition  Services’ website and place a request for it through the system.  Measured in terms of original acquisition value, DOD disposes of most of  its excess personal property in this stage. Of the $3.18 billion (in nominal  dollars) in excess and surplus property that DOD disposed of in fiscal  year 2014, approximately $2.83 billion, or 89 percent, was reutilized by  DOD components or provided to the special programs.
Transfer (second stage–days 15-35). Once DOD components and  special programs have screened the excess property during the  reutilization stage (the first stage) and have determined it is not required  for the needs and the discharge of the responsibilities of any DOD  activity, excess property that is still available at this point is considered  excess to DOD and may be transferred to other federal agencies.  During the transfer stage, both federal and non-federal agencies may  view the property on the GSA website, GSAXcess, for 21 days. Federal  agencies—including DOD components—may also request property  during this stage. DLA Disposition Services officials told us that, like a  DOD component or a special program, a federal agency may obtain  property only if there is no higher priority request that has been received  before the federal agency’s request has been processed.
Donation (third stage–days 36-40). If excess property is still available  after the reutilization and transfer stages, it is declared by GSA to be  surplus and may be donated to state and municipal governments and  other qualified organizations (eligible recipients) through the Federal  Surplus Personal Property Donation Program. These eligible recipients  include public agencies, nonprofit educational and public health activities,  veterans’ organizations, and certain businesses that have been approved  by the Small Business Administration. While potential recipients may  screen and request excess DOD personal property simultaneously with  federal agencies from days 15 through 35 of the cycle, they may not  actually obtain the property until it has been declared surplus and GSA  has made its allocation decisions—during days 36 through 40 of the  cycle. Officials from DLA Disposition Services told us that if higher priority  requests have been received before a potential recipient’s request is  processed, the property may no longer be available.
After day 40 of the cycle, DOD provides two additional days during which  all eligible recipients may screen and request surplus property that is still  unclaimed before it is sold or destroyed. During this final screening  period, federal and state agencies have another opportunity to obtain the  property through GSAXcess.
Sales (fourth stage–days 43+). Usable property that is not redistributed  during the reutilization, transfer, and donation stages of the cycle, and is  determined to be viable for sale, is sold through one of two commercial  venture contracts. Some property is also sold through other negotiated  sales contracts, downgraded to scrap, or disposed of through other  mechanisms if sales are impracticable. According to officials from DLA  Disposition Services, until 2014, DLA Distribution Services administered a  term commercial sales contract with a single contractor. Under this  contract, DLA would turn over its remaining usable DOD surplus property  to the contractor to sell. In return, DOD would receive no more than 2  percent of the property’s original acquisition value. DOD received  proceeds of approximately $153 million in nominal dollars from  commercial venture sales of usable surplus personal property in fiscal  years 2010 through 2014.
In July 2014, DLA Disposition Services awarded a contract to a new  contractor for the sale of surplus rolling stock and a separate contract to  its existing contractor for all other surplus property. DLA Disposition  Services officials told us that under the new rolling stock contract, the  contractor pays DLA Disposition Services 0.25 percent of the property’s  original acquisition value when it receives the property. After selling the  property, the contractor gives DLA Disposition Services 75.29 percent of  the resale proceeds. DOD officials told us that the government realized a  revenue increase of over 300 percent as a result of separating the  disposal of rolling stock from the disposal of other property, restructuring  the rolling stock contract so that the buyer paid DLA a percentage of the  gross resale proceeds rather than of the original acquisition value, and  using a live auction to determine the high bidder for the contract. DOD  officials said that, from November 2014 through June 2015, the rolling  stock contractor sold 7,255 pieces of rolling stock with a total original  acquisition value of about $432.8 million, from which DLA received resale  proceeds of approximately $34 million. According to those officials, rolling  stock revenue under the previous commercial sales contract would have  been less than $7.8 million. Similarly, DLA Disposition Services officials  told us that, under the new contract for non-rolling stock, DLA Disposition  Services will receive 4.35 percent of the original acquisition value of the  property. DOD officials characterized this as a significantly greater  percentage than it had received under the previous single sales contract.  DLA Disposition Services also administers contracts for scrap property,  hazardous materials, and precious metals recovery, among other kinds of  contract.
section_title: DOD’s Implementation of the Disposal Process Has Given Some Non- Federal Entities Priority over Some Federal Agencies for Obtaining Property
subsections: section_title: DOD’s Program for Law Enforcement Agencies Allows Some State and Local Agencies to Take Priority over Some Federal Agencies
paragraphs: DOD’s disposal process has evolved over time as new laws have  authorized non-federal program recipients to obtain property from DOD  that DOD no longer needs. As new laws have added special programs to  the list of eligible recipients for DOD’s excess property, DOD has  exercised its statutory authority to implement these special programs by  allowing certain non-federal recipients (such as state and local law  enforcement agencies) to screen and request property in the first stage of  the disposal process—reutilization—before federal civilian agencies and  state and local governments, which obtain property in later stages— transfer or donation. Officials from DLA Disposition Services told us that  if they received a higher priority request—for example, if an item was  critical to the mission of a DOD component—and the special program’s  request for the property had not yet been processed, the DOD component  would receive the property. However, if the special program’s request had  already been processed, the special program would receive the property  even should DLA Disposition Services later receive a higher priority  request. As a result, the relative order of priority for other federal  agencies and for state and local governments to request this excess and  surplus property comes after the special programs, including those  special programs that provide property to non-federal entities. Figure 4  shows a breakdown of the approximately $2.83 billion in excess personal  property obtained by recipients in the reutilization stage during fiscal year  2014 and identifies the percentage of the dollar value of the property  obtained by each recipient, as measured by its original acquisition value  (original cost to DOD). For that year, the military services combined,  including the Coast Guard, obtained the greatest proportion of reutilized  property, in terms of original acquisition value, followed by law  enforcement agencies. For example, the law enforcement agencies  obtained 32.6 percent of property disposed of at the reutilization stage, or  about $922 million in original acquisition value (in nominal dollars), which  was approximately 29.0 percent of all of the property that DOD reutilized,  transferred, or donated in fiscal year 2014.
As previously discussed, DOD’s implementation of its disposal process  gives special programs, including the 1033 program—which provides  excess property to federal, state, and local law enforcement agencies  during the reutilization stage—priority over some federal civilian agencies  in obtaining such property.
Under the 1033 program, the Secretary of Defense may provide excess  DOD property to federal, state, and local law enforcement agencies,  giving preference among these agencies to those law enforcement  agencies that indicate the property obtained from DOD will be used in  their counterdrug or counterterrorism activities. The Law Enforcement  Support Office (LESO), within DLA Disposition Services, manages the  1033 program, which is unique to DOD. Governor-appointed state  coordinators approve (or disapprove) applications from local law  enforcement agencies in their states to participate in the program. Before  they forward the requests and justifications to LESO for approval, state  coordinators ensure, among other things, that law enforcement agencies  requesting excess DOD personal property have submitted proper  justification for requesting the property.
The statutory language authorizing the 1033 program is silent on the  issue of whether state and local law enforcement agencies are to be  prioritized over federal law enforcement agencies for the receipt of DOD  excess property. As noted earlier, DOD has discretion in the manner in  which it implements its disposal process, and both DOD and DLA officials  acknowledged that DOD has the authority to revise the 1033 program,  provided that such revisions do not violate the language of the statute.  LESO officials explained that property is generally allocated on a first  come, first served basis to law enforcement agencies at all levels, and  such requests are to have a sufficient and valid justification that clearly  defines how the agency will utilize the requested property for law  enforcement. Thus, if LESO receives a request from a state or local law  enforcement agency and later receives one from a federal law  enforcement agency, such as Customs and Border Protection, the state  or local agency will typically receive the property. LESO officials told us  that allocations may be restricted based on information about the property  a law enforcement agency has previously received from LESO or about  limits to the quantities of a specific type of property that a law  enforcement agency may receive, based on the number of law  enforcement officers it has. In accordance with its guidance, DLA  Disposition Services’ LESO generally allocates no more than one of any  item per officer through the 1033 program. For example, LESO is to  allocate no more weapons to a law enforcement agency than that  agency’s total number of officers.
In late 2014, DOD proposed an update to the priority that special  programs have for obtaining excess property during the reutilization stage  of the disposal process. Citing the large drawdown of forces from the  wars in Iraq and Afghanistan, which resulted in significant quantities of  unneeded property—including hazardous property—for which the proper  disposition must be determined, DOD submitted an interim final rule to  the Federal Register on December 29, 2014, prescribing updated  procedures for the disposition of DOD personal property. The interim final  rule was incorporated into the new disposition manual released October  22, 2015. In the new manual, DOD explicitly allows special programs to  screen and request excess DOD personal property during the reutilization  stage (days 1-14). However, during this time, only DOD components are  able to obtain property; property will not be issued to special programs  until the reutilization stage has ended. This change now explicitly gives  priority for obtaining DOD excess property to DOD components over the  special programs. This, in turn, lessens the potential for a special  program to obtain excess property generated by one DOD component  before other DOD components are able to request it. It does not,  however, affect the possibility for a special program to obtain property  before federal civilian agencies, which will continue to screen, request,  and obtain property during the transfer stage (days 15-35). Likewise,  special programs will still be able to obtain property before potential  recipients in the donation stage (days 36-40). As of November, DOD  officials told us they were not planning further revisions to the priorities in  the disposal process at that time, as discussed later in this report.
section_title: Some Excess Property Obtained by State and Local Law Enforcement Agencies May Meet the Needs of Other Federal Agencies and Non-federal Entities
paragraphs: In analyzing 1033 program information from the Federal Excess Property  Management Information System, we found that law enforcement  agencies at all levels have used the program to obtain property—such as  excavating equipment, fencing, and musical instruments—that could also  be used by other agencies at the federal, state, and local levels. While  some of this property went to federal law enforcement agencies, the vast  majority was obtained by state and local law enforcement agencies. If  such property were available as excess to federal civilian agencies that  do not have law enforcement missions, those agencies could potentially  save appropriated funds by obtaining it from DOD through the disposition  process rather than by initiating new procurements. The Executive  Office of the President has reported that approximately 96 percent of the  property issued to law enforcement agencies through the 1033 program  from September 2013 through August 2014 was non-controlled property,  or property without military attributes—such as furniture and forklifts.
Because DOD has implemented the 1033 program to give state and local  law enforcement agencies priority over federal non-law enforcement  (civilian) agencies for obtaining excess property, property originally  purchased with federal dollars may go to state and local agencies before  other federal agencies have the opportunity to request it. As a result, in  some cases, federal agencies that may also have a need for such  property for their missions may not be able to obtain it through the  disposal process, because the excess property that was available has  already been claimed by or provided to state or local law enforcement  agencies. As noted previously, most of DOD’s excess property is  reutilized by DOD components or provided to specific organizations  through special programs in the first stage of the disposal process. In  fiscal year 2014, law enforcement agencies obtained approximately 29.0  percent of that property, in terms of original acquisition value. This could  result in those federal agencies then using appropriated funds to acquire  property similar to the property that has been provided at little to no cost  to the non-federal agencies. Non-controlled excess property that law  enforcement agencies receive under this program could also potentially  be used by state and local governments, non-law enforcement public  agencies, and other eligible recipients, if it is not needed by other federal  agencies and becomes surplus property available for donation, as  illustrated in the example discussed below.
During calendar years 2013 and 2014, 150 law enforcement agencies  obtained 285 pieces of earth-moving and excavating equipment through  the 1033 program, with original acquisition values totaling just over $25  million. We found that at least 9 federal agencies purchased earth-moving  equipment to meet their mission requirements during the same period.  We could not determine whether any specific item that DLA Disposition  Services provided to state and local law enforcement agencies would  have filled the need that one of those federal agencies met by using  appropriated funds for a new procurement. Nonetheless, DLA’s  implementation of the disposal process risks such an occurrence. While  the property that was available might not have been suitable to meet  federal agency requirements—for example, because of matters such as  quantity, timing, condition, and transportation costs—it is possible that  equipment that was suitable could have allowed the federal government  to postpone or even avoid some of these purchases. See appendix III for  more information about this example, which illustrates that DOD also  transferred, donated, and sold property in this category during the same  time frame. Table 1 provides examples of some of the other categories of  items we analyzed. Such property could potentially be transferred to  federal civilian agencies to meet their needs or donated to states,  municipalities, schools, or nonprofit organizations. Appendixes IV through  VI provide additional examples of non-controlled property we identified  that was provided to law enforcement agencies at around the same time  that some federal agencies were purchasing similar equipment.
As implemented, the 1033 program enables federal, state, and local law  enforcement agencies to request excess DOD personal property during  the first stage of the disposal process (reutilization), rather than the  transfer stage, which occurs later and during which federal agencies that  are not law enforcement agencies can request and obtain the property.
DLA Disposition Services’ guidelines for the 1033 program allow a law  enforcement agency to obtain DOD property even if it does not appear to  be exclusively related to law enforcement activities so long as the law  enforcement agency provides the required justification for obtaining the  property, and the state coordinator and then LESO approve the request.  The Executive Office of the President has reported that, over the last 25  years, DLA has provided excess property estimated to be worth $5.1  billion in original acquisition value to law enforcement agencies through  the 1033 program; $2.7 billion worth of that property has been provided  within the last 5 years.
A key internal control for federal agencies is management’s ability to  assess and manage risks associated with achieving agency objectives,  including consideration of an assessment of significant interaction  between the organization and other parties and development of  mechanisms to respond to changes in governmental and operating  conditions, among other special risks. DOD has revised its policies and  procedures for disposing of excess personal property, but has not altered  the program’s screening and issuance priorities because, according to  DOD officials, there is no demand from federal agencies, other than  Customs and Border Protection, to change these priorities. DOD officials  acknowledged that they have the authority to give preference to federal  law enforcement agencies over state and local law enforcement agencies  and to limit the quantity of non-controlled property provided to law  enforcement agencies under the 1033 program. DOD’s disposal process  gives preference to special programs over potential federal civilian  agency recipients for obtaining excess property. Consequently, in some  cases, federal agencies may be disadvantaged in favor of non-federal  agencies in their ability to obtain property that was originally purchased  with federal funds. In such cases, federal agencies are at risk of spending  appropriated funds to acquire property that could potentially be obtained  through DOD’s disposal process at lower cost. While DOD has modified  the disposal process so that excess property is provided only to DOD  components during the first 14 days of the disposal cycle, this  modification does not change the preference given to special programs to  request and obtain excess property before federal civilian agencies and  other non-federal entities. It is reasonable that, in certain circumstances,  agencies under the special programs may need property before federal  civilian agencies—for example, in order to provide humanitarian  assistance or for other U.S. government priorities. However, DOD has not  identified any additional changes that need to be made to the priorities  within its disposal process or to the categories and quantities of excess  property that special programs may obtain. Unless DOD further  reassesses its disposal process to determine if it needs to make  additional changes to its guidance governing the priorities of the disposal  process—specifically for property obtained by special programs such as  the 1033 program—and revises its guidance reflecting those priorities, the  risk remains that federal civilian agencies may spend additional  appropriated federal funds to procure equipment, rather than pursue  obtaining equal or similar items at little or no additional cost to the federal  government through DOD’s disposal process.
section_title: DOD Has Encountered Challenges in Its Capacity to Manage Excess Property in Need of Disposal
subsections: section_title: Some Disposition Services Sites Have Extended Waits for Turn-In Appointments and Backlogs of Unprocessed Property
paragraphs: DLA Disposition Services faces challenges in processing the current  levels of excess property that the military services are turning in for  disposal, and these challenges may affect DOD’s ability to handle any  increases in the amount of property for disposal in an efficient manner.  Once a military service determines that property is excess to its needs, its  military units (customers) that have excess property to dispose of typically  bring or send that property to a Disposition Services disposition site. DOD  guidance states that the customers should schedule all turn-ins in  advance, before delivering the property to a disposition site. DLA  Disposition Services personnel are to coordinate closely with their DOD  customers to ensure that the scheduling of property turn-ins takes into  consideration each site’s receiving capacity and the volume of property to  be turned in. Disposition Services has established a goal for customers to  be able to turn in their excess property within 14 days of requesting an  appointment. Once Disposition Services has physically received property  from the customer, its goal is to record the receipt of the property in its  accountable system of record within 5 days. When this process takes  more than 5 days, Disposition Services experiences backlogs of  unprocessed property and future customers may sometimes have to wait  to turn in property.
Customers wanting to turn in property use DLA Disposition Services’  online appointment system to schedule a time to drop off the property.  This system identifies the next available appointment date and time for  property turn-in. Military service officials told us that, in some cases, the  next appointment may be several weeks out, and some units have  experienced wait times of a month or more. These officials told us that  customer wait times longer than 14 days prevent them from turning in  their property in a timely manner and that the extra wait may result in  additional costs to the services. For example, Navy officials told us that,  while waiting for their scheduled turn-in appointment date at some  disposition sites, they place excess property into temporary storage  ashore. These officials said that, in addition to costs for storage, this  leads to redundant work by fleet supply personnel who have to prepare  the materiel for storage and later, for transfer to the disposition site. They  also cited the additional work Navy personnel must perform to maintain  visibility, access, accountability, and, in some cases, maintenance of  property that has been set aside to turn in later.
DLA Disposition Services officials told us that, at some of the 80  disposition sites in the United States, it takes several weeks to process  the property being turned in, leading to backlogs of unprocessed  property. According to these officials, the reasons for backlogs and  extended customer wait times vary by site. They include shortages of  staff, a lack of covered storage at the site, and limitations on space for  receiving trucks and processing the property. DLA Disposition Services  tracks customer wait times and backlogs at its sites, and officials told us  that those tracking data are monitored daily, briefed to management  monthly, and reported to all locations. Although we found that these data  have certain limitations because they are not consistently collected and  reported over time, are estimates, are captured for only points in time, or  do not address the underlying causes of the wait times or backlogs,  officials from DLA Disposition Services told us that the data do provide  indications to management of potential issues at the sites and that they  are supplemented by other information sources.
For customer wait times, DLA Disposition Services looks at the  automated appointment calendar for each site once a month to  identify the next available appointment date. Because the next  available appointment date changes from day to day as customers  make, change, and cancel their turn-in appointments, this method  provides data only for a specific point in time, and the information  cannot be replicated. However, officials at DLA Disposition Services  told us that collecting these data for each site on an on-going basis  enables them to compare the wait times across several months. This  practice helps them identify those sites that might consistently have  long waits over time. Other sources of information on customer wait  times that supplement these monthly data are comments on DLA  Disposition Services’ website and direct contacts from military service  customers.
Similarly, DLA Disposition Services tracks the backlogs at its sites  based on estimates of the amount of property that is queued for  processing, but the actual amounts of property to be processed can  vary greatly from these estimates once the disposition site personnel  determine the number of items in each line of the turn-in document.  However, officials at DLA Disposition Services told us that collecting  these data for each site on an ongoing basis enables them to monitor  the backlogs at each site over time. This practice helps them assess  where there might be problems at the disposition sites and therefore  where they can focus their efforts to reduce backlogs. DLA Disposition  Services supplements these data with other tools for identifying  backlogs, such as its performance reviews and inspections of the  sites.
section_title: Disposition Services Has Taken Some Actions to Address Customer Wait Times and Backlogs
paragraphs: As shown in table 2, DLA Disposition Services has recently taken some  actions to address customer wait times and backlogs at its sites.
Despite these actions, at the time of our review, DLA Disposition Services  officials acknowledged that customer wait times and backlogs were still a  problem at some of the larger DLA Disposition Services disposition sites,  such as Norfolk (Virginia) and Hill (Utah). Further, some of these actions,  such as deploying Tiger Teams or diverting property, may temporarily  reduce backlogs at a location but do not guarantee that the underlying  problems that led to the backlogs have been addressed.
section_title: Existing Challenges May Limit DOD’s Ability to Manage a Large Increase in the Amount of Personal Property for Disposal
paragraphs: The challenges that DLA Disposition Services is currently facing with its  turn-in process will likely have a negative effect on its ability to handle an  increase in the amount of property to be processed, particularly with the  ongoing backlogs it continues to experience at several of its larger sites  and the extended wait times many customers are facing at certain  disposition sites. Specifically,  Inconsistent tracking. As noted earlier, although DLA Disposition  Services has established a method for monitoring and tracking  backlogs at its sites, this tracking has not been consistent over the  past few years. The data collected through this tracking provide an  indicator to management about potential backlogs at the sites, but  they do not provide context for the various factors that might be  driving the development of a backlog at a particular site.
Lack of formal plans. While we were told that site management must  submit a formal plan for addressing backlogs if those backlogs exceed  5 days, we found that such plans had not been prepared for two of the  five sites we visited—Bragg (North Carolina), which had overcome its  backlogs with assigned personnel and overtime, and Norfolk  (Virginia), which has experienced backlogs and extensive customer  wait times for the past several years.
Lack of backlog reduction process. Backlogs have been addressed  by deploying temporary duty personnel to specific sites and by  starting to standardize some procedures, but no agency-wide process  exists for reducing backlogs and maintaining those reductions. DOD  officials told us that standardized receiving is the agency-wide  process used for reducing backlogs, increasing production efficiency,  and maintaining sustainable controls over backlogs. In addition, the  recent Tiger Teams have managed to reduce the backlogs at most  disposition sites. However, according to DLA Disposition Services  officials, backlogs persist at a few of the larger sites that have a large  number of customers. Additionally, because DLA Disposition Services  has not yet reassessed the capacity at its sites, it is not certain  whether some of the sites may have developed backlogs as a result  of shortages of storage or processing space rather than insufficient  personnel or inadequate procedures. If this is the case, adding more  personnel or standardizing procedures would not solve the underlying  problems at those sites.
Diversions create other costs. Diverting property to another  disposition site may be a short-term solution that does not address the  underlying problem, and, if the excess property has to be transported  across greater distances than is normally the case, could involve  additional transportation costs and coordination with customers.
Drawbacks to expedited processing. Given a large amount of  property to be processed, DLA Disposition Services could expedite  the disposal process under certain circumstances. However,  expediting the processing of excess and surplus property may carry  the risk of DOD’s excess property moving too quickly to sales or  destruction, possibly giving potential recipients insufficient opportunity  to screen and request it. State surplus property officials, in particular,  expressed concern about the potential effect of expedited processing  on their ability to obtain surplus property for their states.
We asked DLA and military service officials the extent to which they  coordinate the turn-in of excess personal property and how they prepare  for any large increase in the amount of property identified for disposal,  such as during force drawdowns or base realignment and closure actions.  DLA officials told us that they believed the effect of such an increase on  DLA Disposition Services’ overall disposal process would not be  significant. These officials cited the example of the drawdown in the  Army’s brigade combat teams, which they asserted had not had a  significant effect at any disposition site. To support this drawdown, DLA  Disposition Services officials told us they had successfully implemented  mobile disposal capabilities at several Army sites to expedite disposal,  adding turn-in appointments and increasing operating hours and even  manpower in cases where the current capabilities were not sufficient.  They also said that any significant increase in the amount of excess  property would become apparent as an increase in the receiving backlog  at the affected sites, which is monitored on a monthly basis. DLA officials  also said that, if a site’s backlog grows beyond the 5-day threshold, site  management must submit a plan for reducing it, using local resources  such as overtime or split shifts. If this plan is not effective, DLA  Disposition Services Headquarters can add more personnel resources to  that site or divert some of the property to be turned in to other disposition  sites. These officials also said that DLA Disposition Services coordinates  with the services in advance of large amounts of property being turned in,  so that the sites can plan for increased workloads. However, as noted  previously, even with these assurances, backlogs continued at 17 sites as  of the end of April 2015.
A key internal control of successful federal organizations is their  management’s ability to identify, analyze, and respond to risks that could  inhibit the organization in reaching its defined objectives. DLA  Disposition Services has established an operational goal for customers to  be able get an appointment to turn in their excess property within 14 days  of requesting one. After Disposition Services has received property from a  customer, it has 5 days to process the property, that is, record the receipt  of the property in its accountable system of record. When it takes more  than 5 days for DLA to process property that has been turned in, backlogs  of unprocessed property occur. DOD components turn in huge amounts  of excess property, particularly at the larger disposition sites. Although  DLA Disposition Services has modified some of its practices for  processing this property, backlogs in processing property that has been  turned in continued to occur at 17 locations as of the end of April 2015.  As noted in table 2, officials from DLA Disposition Services told us that  the study they have initiated to review the throughput at the disposition  sites will enable them to look at the workload and resources at each site  to determine where improvements could be made.
section_title: Conclusions
paragraphs: For fiscal year 2014, DOD reported that it had reutilized, transferred, or  donated excess and surplus property with a total original acquisition value  of approximately $3.18 billion in nominal dollars. Property amounting to a  little over a quarter of this value was obtained by law enforcement  agencies—through special programs—during the reutilization stage of the  disposal process, rather than moving forward through the other stages  where it might be transferred to federal civilian agencies, donated to non- federal organizations, or sold or destroyed. DOD’s implementation of the  disposal process has placed special program recipients in the first stage  of the process (reutilization) rather than the later stages (transfer or  donation), where some of these organizations would otherwise obtain the  property. As a result, in some cases the disposal process gives  preference for obtaining excess property to special programs— particularly to state and local law enforcement agencies—over potential  federal recipients outside of DOD. When preference is given to eligible  recipients under special programs over federal civilian agencies, there is  a risk that federal agencies could spend appropriated funds to acquire  property through new procurement that they could potentially have  obtained at lower cost (such as the costs to cover transportation from the  disposition site) through the DOD disposal process. While DOD has taken  some steps to update its procedures to better ensure that DOD  components can obtain its excess property before the special programs,  those special programs could still obtain such property prior to most  federal civilian agencies and non-federal entities. It is reasonable that  agencies under the special programs may obtain specific property ahead  of federal civilian agencies in certain circumstances, such as for  humanitarian assistance or to meet other U.S. government priorities.  However, DOD has not determined whether additional changes are  needed in the priorities of its disposal process and the categories and  quantities of excess property that special programs may obtain through  the process, and it does not currently have plans to do so. Thus, the risk  remains that federal agencies may spend federal funds to procure  property rather than obtaining that or similar property through the DOD  disposal process.
section_title: Recommendation for Executive Action
paragraphs: Recognizing that DOD has recently revised its disposition guidance, we  recommend that the Secretary of Defense direct the Director, DLA, to  further reassess DOD’s disposal process to determine whether additional  changes are needed in the priority given to recipients within the process,  including potential changes to the categories and quantities of property  that special programs may obtain, and revise its guidance reflecting those  priorities accordingly to better enable DOD to fulfill the disposal program’s  objectives.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this product to the Department of Defense, the  General Services Administration, and the Department of Homeland  Security for comment. In its written comments, DOD concurred with our  recommendation and stated that it would continue to assess all aspects of  the disposal process as part of its standard operating procedures. As we  discuss in this report, we believe that DOD should separately assess the  priorities in its disposal process, to include preferences provided to the  special programs. Absent such an assessment, risk remains that federal  agencies may spend additional appropriated federal funds to procure  equipment, rather than pursue obtaining equal or similar items at little or  no additional cost to the federal government through DOD’s disposal  process. While we understand that DOD already assesses its disposal  process as part of its normal operations, we continue to believe that the  potential chance to make more efficient use of federal funds warrants  further efforts in this area, even though this could require some effort by  DOD entities for the primary benefit of federal civilian agencies. DOD’s  comments are reprinted in their entirety in appendix VII. We also received  technical comments from the General Services Administration and the  Department of Homeland Security, which we incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, the Administrator of the General  Services Administration, the Secretary of Homeland Security, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  Brian J. Lepore at (202) 512-4523 or leporeb@gao.gov or Seto J.  Bagdoyan at (202) 512-6722 or bagdoyans@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. GAO staff who made key contributions to  this report are listed in appendix VIII.
section_title: Appendix I: Scope and Methodology
paragraphs: To describe the process for disposing of Department of Defense (DOD)  excess personal property in the United States, we reviewed key  documentation of guidance DOD provides to Defense Logistics Agency  (DLA) Disposition Services and DOD components on the disposition of  excess personal property, such as the Defense Materiel Disposition  Manual and the DOD Demilitarization Manual. We met with officials  from the Office of the Secretary of Defense to discuss the overall disposal  process, property accountability policies for DOD property, and the costs  and revenues associated with the process. We also met with officials from  DLA Headquarters and DLA Disposition Services Headquarters to  discuss the overall disposal process and their roles and responsibilities in  that process. In addition, we met with staff at 5 of the 80 DLA Disposition  Services disposition sites in the United States that support different  military services and specific disposition processes, in order to view  DOD’s disposal process and identify the specific systems, processes, and  controls DOD uses to dispose of excess personal property. Criteria we  used to select those sites include, among others, the capacity to process  controlled property, property requiring demilitarization, or hazardous  property. The sites also represent two of the three Disposition Services  Directorates that oversee the disposition sites in the continental United  States—Eastern United States and Middle America. The information  obtained from these five disposition sites offers insight into the manner in  which the process was implemented at those select locations, although it  is not projectable to DOD’s entire disposal process. Additionally, we  reviewed key service-specific guidance documents to determine how the  services implement DOD guidance and the processes they establish for  turning in their excess property in the United States, and we met with  supply and logistics representatives from each of the military services.
We also contacted officials from the DOD Office of the Inspector General  for information on their recently completed, ongoing, or planned audits of  DOD’s disposal process, including the 1033 program. Finally, we met with  officials from the General Services Administration (GSA) to gain an  understanding of the overall federal system for disposing of excess  property, including government-wide policies in general and DOD’s  disposal process in particular, and obtained access to GSAXcess to view  how GSA makes property available to potential customers to view and  obtain.
We looked in more detail at two of the special programs through which  certain qualified organizations are authorized to receive excess DOD  property—the foreign security assistance program and the program that  provides excess DOD property to federal, state, and local law  enforcement agencies (called the “1033 program” for the section of the  law that authorizes it)—to illustrate how these programs fit into and affect  the priorities in DOD’s disposal process. We selected the foreign security  assistance program because DLA Disposition Services has different  processes to handle excess property for this special program, and we  selected the 1033 program because it is the special program that  receives the greatest proportion of DOD excess personal property each  year in terms of original acquisition value. In addition to reviewing laws  and policies related to these two programs, we discussed the programs  with officials from DLA Disposition Services Headquarters. We also  obtained reported reutilization, transfer, donation, and sales information  for fiscal years 2010 through 2014—the most recent full fiscal year data  available—from DOD and GSA to describe the disposal process.  Although we did not independently validate the accuracy of the detailed  reutilization, transfer, donation, and sales data, we believe the data are  sufficiently reliable for our purpose of illustrating the overall size and  scope of DOD’s disposal process.
To assess how DOD’s priorities in its disposal process affect the  distribution of excess property, we reviewed key guidance, manuals, and  policies; legal authorities; and reports and other documents related to the  process. We met with officials from DLA’s Disposition Services  Headquarters and the selected sites to discuss challenges they had  identified. To get the perspectives of a federal law enforcement agency  on DOD’s disposal process for its excess personal property, we met with  officials from U.S. Customs and Border Protection. We selected this  federal agency because of its border security mission and its interest in  obtaining DOD excess personal property. To identify challenges that state  recipients face in obtaining excess and surplus DOD personal property,  we met with officials from four states who are responsible for managing  either the 1033 program to support law enforcement activities, the  Federal Surplus Personal Property Donation Program, or both programs  for their states. We selected these states based on proximity to DLA  Disposition Services disposition sites, their status in the 1033 program,  whether the 1033 program coordinator also serves as the surplus  coordinator, and whether the surplus coordinator serves as an officer or  committee member of the National Association of State Agencies for  Surplus Property. We also met with the executive director of the National  Association of State Agencies for Surplus Property and participated in  one of the conference calls that the association holds with officials from  DLA Disposition Services and GSA, in which association members bring  up issues and questions related to obtaining surplus property from DOD.  Finally, we contacted the audit agencies for each of the four states to  determine whether or not they had any recently completed, ongoing, or  planned audits of the Federal Surplus Personal Property Donation  Program or the 1033 program in their state. Although the views of officials  from these states are not generalizable to all states, they provided  insights into the types of challenges faced by non-federal organizations  involved in the disposal process and into other related audit work.
To identify types of excess property obtained by law enforcement  agencies, we obtained and analyzed data on the 1033 program from an  extract of the Federal Excess Property Management Information System  provided by the U.S. Forest Service, which manages this database on  behalf of the Law Enforcement Support Office (LESO). To assess the  reliability of these data, we interviewed knowledgeable officials at the U.S.  Forest Service and LESO, performed electronic testing of key data  elements, and met with both the 1033 program coordinator and a local  law enforcement agency in each of two states to compare the property on  hand with the records in the database. Based on these efforts, we  concluded that the data were sufficiently reliable for the purposes of this  review. We then used the data to examine property obtained by law  enforcement agencies from calendar years 2013 and 2014—the most  recent full calendar year data available—that did not appear to be  exclusive to law enforcement activities and that did not possess military  attributes. To provide some examples of types of property that could fall  into these categories, we analyzed data from six federal supply classes,  including earth-moving and excavating equipment (federal supply class  #3805); self-propelled warehouse trucks and tractors (3930); fencing,  fences, gates, and components (5660); food cooking, baking, and serving  equipment (7310); kitchen equipment and appliances (7320); and musical  instruments (7710). We selected these broad categories of property  based on testimonial evidence we had gathered during site visits to the  four states and our judgment of property that did not seem to be  exclusively related to law enforcement activities but that had recently  been obtained by law enforcement agencies. We used the national stock  numbers to calculate the number of items, number of distinct law  enforcement agencies, number of states, and range of acquisition values  for various equipment types within each federal supply class. We also  met with officials from an international police association to discuss the  potential uses by law enforcement agencies of the categories of property  we selected. Finally, to identify situations in which federal agencies may  have purchased property similar to that obtained by law enforcement  agencies, we reviewed publicly available government procurement data.  Specifically, we searched the USASpending.gov website for terms related  to the six federal supply classes and obtained additional details about  individual contracts using the Federal Procurement Data System-Next  Generation database. However, in performing this work, we did not  review signed contract language, determine whether donated property  would have been suitable for the needs of the purchasing agency, or  confirm that the purchased equipment had been delivered.
To assess the extent to which DOD has encountered challenges in its  capacity to manage excess personal property to be processed, we  obtained from DLA Disposition Services available data and management  briefings on the amount of time it took for military service customers to  schedule an appointment to turn in their excess property and for DLA  Disposition Services staff to process the property at disposition sites in  the United States. We requested this information for calendar years 2013  and 2014, to obtain data for the two most recent calendar years. To  obtain more recent backlog information, we subsequently requested data  through April 2015. We analyzed these data and briefings and discussed  them with officials at DLA Disposition Services so we could gain an  understanding of customer wait times and backlogs at each of those  sites. These data and briefings are among the tools that DLA Disposition  Services uses to identify potential problems at its sites, although we found  that they had certain limitations in providing comprehensive information  on customer wait times and backlogs at the disposition sites because  they were not consistently reported over time, were estimates, captured  data for only a point in time, or did not get at underlying causes. We also  received documentation on initiatives that DLA Disposition Services has  undertaken to reduce customer wait times and backlogs, and we  discussed these documents with officials from DLA Disposition Services.  Additionally, we met with DLA officials at the selected Disposition  Services disposition sites to discuss challenges they face in disposing of  excess personal property, actions they have taken to address those  challenges, and what resources they have available to perform their  property disposal functions. We toured the sites and observed their  disposal operations to understand the challenges associated with multiple  types of operational structures and the effect that an increase in the  amount of property to be processed could have on the sites’ operations.  Finally, we talked with officials representing each of the military services  to discuss the disposal process and to identify challenges their units  encounter in turning in or managing their excess personal property for  disposal. These officials represented the headquarters, some major  commands, and at least one installation from each of the military  services.
Table 3 identifies the organizations and agencies we contacted during our  review.
We conducted this performance audit from April 2014 to January 2016 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: DOD Special Programs
paragraphs: There are 12 special programs that may screen and request DOD excess  personal property during the reutilization stage of the disposal process.  Six of these programs are found in laws and codified in statutes as shown  in table 4.
The remaining six special programs were established by DOD, and no  separate legal authorities apply. Table 5 identifies these special  programs.
section_title: Appendix III:
section_title: Appendix IV: Excess Property Obtained by Law Enforcement Agencies
section_title: Appendix V:
section_title: Appendix VI:
section_title: Appendix VII: Comments from the Department of Defense
section_title: Appendix VIII: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the contacts named above, Maria Storts and Philip Reiff  (Assistant Directors), John Ahern, Karyn Angulo, Ronnie Bergman, Gary  Bianchi, Steve Boyles, John Bumgarner, William Cordrey, Jeanette  Espinola, Robert Graves, Samuel Harris, Joanne Landesman, Felicia  Lopez, Daniel McKenna, Anna Maria Ortiz, Carol Petersen, Terry  Richardson, Amie Steele, Sabrina Streagle, Guiovany Venegas, and  Nicholas Weeks made key contributions to this report.