DOD's High-Risk Areas: Progress Made Implementing Supply Chain Management Recommendations, but Full Extent of Improvement Unknown
Published: 2007-01-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Military operations in Iraq and Afghanistan have focused attention on the Department of Defense's (DOD) supply chain management. The supply chain can be critical to determining outcomes on the battlefield, and the investment of resources in DOD's supply chain is substantial. In 2005, with the encouragement of the Office of Management and Budget (OMB), DOD prepared an improvement plan to address some of the systemic weaknesses in supply chain management. GAO was asked to monitor implementation of the plan and DOD's progress toward improving supply chain management. GAO reviewed (1) the integration of supply chain management with broader defense business transformation and strategic logistics planning efforts; and (2) the extent DOD is able to demonstrate progress. In addition, GAO developed a baseline of prior supply chain management recommendations. GAO surveyed supply chain-related reports issued since October 2001, identified common themes, and determined the status of the recommendations.
section_title: What GAO Found
paragraphs: DOD's success in improving supply chain management is closely linked with its defense business transformation efforts and completion of a comprehensive, integrated logistics strategy. Based on GAO's prior reviews and recommendations, GAO has concluded that progress in DOD's overall approach to business defense transformation is needed to confront problems in other high-risk areas, including supply chain management. DOD has taken several actions intended to advance business transformation, including the establishment of new governance structures and the issuance of an Enterprise Transition Plan aligned with the department's business enterprise architecture. As a separate effort, DOD has been developing a strategy--called the "To Be" logistics roadmap--to guide logistics programs and initiatives across the department. The strategy would identify the scope of logistics problems and capability gaps to be addressed and include specific performance goals, programs, milestones, and metrics. However, DOD has not identified a target date for completion of this effort. According to DOD officials, its completion is pending the results of the department's ongoing test of new concepts for managing logistic capabilities. Without a comprehensive, integrated strategy, decision makers will lack the means to effectively guide logistics efforts, including supply chain management, and the ability to determine if these efforts are achieving desired results. DOD has taken a number of actions to improve supply chain management, but the department is unable to demonstrate at this time the full extent of its progress that may have resulted from its efforts. In addition to implementing audit recommendations, DOD is implementing initiatives in its supply chain management improvement plan. However, it is unclear how much progress its actions have resulted in because the plan generally lacks outcome-focused performance metrics that track progress in the three focus areas and at the initiative level. DOD's plan includes four high-level performance measures, but these measures do not explicitly relate to the focus areas, and they may be affected by many variables, such as disruptions in the distribution process, other than DOD's supply chain initiatives. Further, the plan does not include overall cost metrics that might show efficiencies gained through the efforts. Therefore, it is unclear whether DOD is meeting its stated goal of improving the provision of supplies to the warfighter and improving readiness of equipment while reducing or avoiding costs. Over the last 5 years, audit organizations have made more than 400 recommendations that focused specifically on improving certain aspects of DOD's supply chain management. About two-thirds of the recommendations had been closed at the time GAO conducted its review, and most of these were considered implemented. Of the total recommendations, 41 percent covered the focus areas in DOD's supply chain management improvement plan: requirements forecasting, asset visibility, and materiel distribution. The recommendations addressed five common themes--management oversight, performance tracking, planning, policy, and processes.

section_title: Letter
paragraphs: Military operations in Iraq and Afghanistan have focused attention on the  performance of the Department of Defense’s (DOD) supply chain  management in support of deployed U.S. troops. The availability of spare  parts and other critical supply items affects the readiness and operational  capabilities of U.S. military forces, and the supply chain can be a critical  link in determining outcomes on the battlefield. Moreover, the investment  of resources in the supply chain is substantial, amounting to more than  $150 billion a year according to DOD. As a result of weaknesses in DOD’s  management of supply inventories and responsiveness to warfighter  requirements, supply chain management has been on our list of high-risk  federal government programs since 1990. We initially focused on inventory  management and later determined that problems extended to other parts of  the supply chain, to include requirements forecasting, asset visibility, and  materiel distribution.
In 2005, with the encouragement of the Office of Management and Budget  (OMB), DOD developed a plan to address some of the systemic weaknesses  as a first step toward removing supply chain management from our high- risk list. Since then we have reviewed and commented on DOD’s progress  toward implementing its supply chain management improvement plan, the  linkage of this plan with other DOD logistics plans, and the extent to which  DOD has incorporated performance metrics for tracking and demonstrating progress. We have stated that, overall, DOD’s plan  addressing supply chain management is a good first step toward putting  DOD on a path toward resolving long-standing supply chain management  problems, but that the department faces a number of challenges and risks  in fully implementing its proposed changes across the department and  measuring progress.
In response to your Committee’s request, we have continued to monitor  DOD’s progress toward resolving supply chain management problems.  Specifically, this report discusses (1) the integration of supply chain  management with broader defense business transformation and strategic  logistics planning efforts and (2) the extent to which DOD is able to  demonstrate progress toward improving supply chain management. In  addition, we developed a baseline of recommended improvements to  DOD’s supply chain management that have been made over the past 5  years.
Our discussion of the integration of supply chain management with broader  defense business transformation efforts is based primarily on our prior  reports and testimonies. We obtained information from officials in the  Office of the Secretary of Defense on their efforts to develop an  overarching strategy to guide departmentwide logistics programs and  initiatives. We met regularly with DOD and OMB officials to discuss the  overall status of the supply chain management improvement plan, the  implementation schedules of the plan’s individual initiatives, and the plan’s  performance measures. We visited and interviewed officials from U.S.  Transportation Command, the Defense Logistics Agency, the military  services, and the Joint Staff to gain their perspectives on improving supply  chain management. In developing a baseline of recommended supply chain  management improvements, we surveyed audit reports issued between  October 2001 and September 2006 by our office, the Department of Defense  Office of the Inspector General (DOD-IG), and the military service audit  agencies. We selected this time period because it corresponds with the  onset of recent military operations that began with Operation Enduring  Freedom. For each audit recommendation contained in these reports, we  determined its status and focus. In analyzing the status of  recommendations, we determined whether DOD or the component  organization concurred with the recommendations, whether the  recommendations were closed, and whether closed recommendations had  been implemented. We determined that the data we obtained from the  DOD-IG and the service audit agencies were sufficiently reliable for our  purposes. In analyzing the focus of recommendations, we identified those  addressing three specific areas—requirements forecasting, asset visibility,  and materiel distribution—as well those addressing other supply chain  management concerns. We selected these three focus areas as the  framework for our analysis based on our prior work in this high-risk area  and because DOD has structured its supply chain management  improvement plan around them. While we included recommendations by  non-audit organizations in our analysis, we did not determine the extent to  which DOD concurred with or implemented them because their status is  not systemically tracked. Additional information on our analysis, including  further explanation of the terms used in describing the status of  recommendations, is discussed in the scope and methodology section. We  conducted our review from January through November 2006 in accordance  with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: For 16 years, DOD’s supply chain management processes have been on our  list of high-risk areas needing urgent attention because of long-standing  systemic weaknesses that we have identified in our reports. We initiated  our high-risk program in 1990 to report on government operations that we  identified as being at high risk for fraud, waste, abuse, and  mismanagement. The program serves to identify and help resolve serious  weaknesses in areas that involve substantial resources and provide critical  services to the public.
Removal of a high-risk designation may be considered when legislative and  agency actions, including those in response to our recommendations, result  in significant and sustainable progress toward resolving a high-risk  problem. Key determinants include a demonstrated strong commitment to  and top leadership support for addressing problems, the capacity to do so,  a corrective action plan that provides for substantially completing  corrective measures in the near term, a program to monitor and  independently validate the effectiveness of corrective measures, and  demonstrated progress in implementing corrective measures.
Beginning in 2005, DOD developed a plan for improving supply chain  management that could reduce its vulnerability to fraud, waste, abuse, and  mismanagement and place it on the path toward removal from our list of  high-risk areas. This supply chain management improvement plan, initially  released in July 2005, contains 10 initiatives proposed as solutions to  address the root causes of problems we identified from our prior work in  the areas of requirements forecasting, asset visibility, and materiel  distribution.
DOD defines requirements as the need or demand for personnel,  equipment, facilities, other resources, or services in specified quantities for  specific periods of time or at a specified time. Accurately forecasted supply  requirements are a key first step in buying, storing, positioning, and  shipping items that the warfighter needs. DOD describes asset visibility as  the ability to provide timely and accurate information on the location,  quantity, condition, movement, and status of supplies and the ability to act  on that information. Distribution is the process for synchronizing all  elements of the logistics system to deliver the “right things” to the “right  place” at the “right time” to support the warfighter.
section_title: Improvements to Supply Chain Management Are Linked with Overall Defense Business Transformation and Completion of a Comprehensive, Integrated Logistics Strategy
paragraphs: DOD’s success in improving supply chain management is closely linked  with its overall defense business transformation efforts and completion of  a comprehensive, integrated logistics strategy. In previous reports and  testimonies, we have stated that progress in DOD’s overall approach to  business transformation is needed to confront problems in other high-risk  areas, including supply chain management. DOD has taken several steps  intended to advance business transformation, including establishing new  governance structures and aligning new information systems with its  business enterprise architecture. Another key step to supplement these  ongoing transformation efforts is completion of a comprehensive,  integrated logistics strategy that would identify problems and capability  gaps to be addressed, establish departmentwide investment priorities, and  guide decision making.
subsections: section_title: DOD Is Taking Steps to Advance Business Transformation
paragraphs: DOD’s success in improving supply chain management is closely linked  with overall defense business transformation. Our prior reviews and  recommendations have addressed business management problems that  adversely affect the economy, efficiency, and effectiveness of DOD’s  operations, and that have resulted in a lack of adequate accountability  across several of DOD’s major business areas. We have concluded that  progress in DOD’s overall approach to business transformation is needed to  confront other high-risk areas, including supply chain management. DOD’s  overall approach to business transformation was added to the high-risk list  in 2005 because of our concern over DOD’s lack of adequate management  accountability and the absence of a strategic and integrated action plan for  the overall business transformation effort. Specifically, the high-risk  designation for business transformation resulted because (1) DOD’s  business improvement initiatives and control over resources are  fragmented; (2) DOD lacks a clear strategic and integrated business  transformation plan and investment strategy, including a well-defined  enterprise architecture to guide and constrain implementation of such a  plan; and (3) DOD has not designated a senior management official  responsible and accountable for overall business transformation reform  and related resources.
In response, DOD has taken several actions intended to advance  transformation. For example, DOD has established governance structures  such as the Business Transformation Agency and the Defense Business  Systems Management Committee. The Business Transformation Agency  was established in October 2005 with the mission of transforming business  operations to achieve improved warfighter support and improved financial  accountability. The agency supports the Defense Business Systems  Management Committee, which is comprised of senior-level DOD officials  and is intended to serve as the primary transformation leadership and  oversight mechanism. Furthermore, in September 2006, DOD released an  updated Enterprise Transition Plan that is intended to be both a business  transformation roadmap and management tool for modernizing its business  process and underlying information technology assets. DOD describes the  Enterprise Transition Plan as an executable roadmap aligned to DOD’s  business enterprise architecture. In addition, as required by the National  Defense Authorization Act for Fiscal Year 2006, DOD is studying the  feasibility and advisability of establishing a Deputy Secretary for Defense  Management to serve as DOD’s Chief Management Officer and advise the  Secretary of Defense on matters relating to management, including defense  business activities.
Business systems modernization is a critical part of DOD’s transformation  efforts, and successful resolution of supply chain management problems  will require investment in needed information technology. DOD spends  billions of dollars to sustain key business operations intended to support  the warfighter, including systems and processes related to support  infrastructure, finances, weapon systems acquisition, the management of  contracts, and the supply chain. We have indicated at various times that  modernized business systems are essential to the department’s effort in addressing its supply chain management issues. In its supply chain  management improvement plan, DOD recognizes that achieving success in  supply chain management is dependent on developing interoperable  systems that can share critical supply data. One of the initiatives included  in the plan is business system modernization, an effort that is being led by  DOD’s Business Transformation Agency and includes achieving materiel  visibility through systems modernization as one of its six enterprisewide  priorities.
Improvements in financial management are also integrally linked to DOD’s  business transformation. Since our first report on the financial statement  audit of a major DOD component over 16 years ago, we have repeatedly  reported that weaknesses in business management systems, processes, and  internal controls not only adversely affect the reliability of reported  financial data, but also the management of DOD operations. Such  weaknesses have adversely affected the ability of DOD to control costs,  ensure basic accountability, anticipate future costs and claims on the  budget, measure performance, maintain funds control, and prevent fraud.  In December 2005, DOD issued its Financial Improvement and Audit  Readiness Plan to guide its financial management improvement efforts.  The Financial Improvement and Audit Readiness Plan is intended to  provide DOD components with a roadmap for (1) resolving problems  affecting the accuracy, reliability, and timeliness of financial information;  and (2) obtaining clean financial statement audit opinions. It uses an  incremental approach to structure its process for examining operations,  diagnosing problems, planning corrective actions, and preparing for audit.  The plan also recognizes that it will take several years before DOD is able  to implement the systems, processes, and other changes necessary to fully  address its financial management weaknesses. Furthermore, DOD has  developed an initial Standard Financial Information Structure, which is  DOD’s enterprisewide data standard for categorizing financial information.  This effort focused on standardizing general ledger and external financial  reporting requirements.
While these steps are positive, defense business transformation is much  broader and encompasses planning, management, organizational  structures, and processes related to all key business areas. As we have  previously observed, business transformation requires long-term cultural  change, business process reengineering, and a commitment from both the  executive and legislative branches of government. Although sound  strategic planning is the foundation on which to build, DOD needs clear,  capable, sustained, and professional leadership to maintain continuity  necessary for success. Such leadership would provide the attention  essential for addressing key stewardship responsibilities—such as strategic  planning, performance management, business information management,  and financial management—in an integrated manner, while helping to  facilitate the overall business transformation effort within DOD. As DOD  continues to evolve its transformation efforts, critical to successful reform  are sustained leadership, organizational structures, and a clear strategic  and integrated plan that encompasses all major business areas, including  supply chain management.
section_title: Completion of a Comprehensive, Integrated Logistics Strategy Could Supplement Business Transformation Efforts
paragraphs: Another key step to supplement ongoing defense business transformation  efforts is completion of a comprehensive, integrated logistics strategy that  would identify problems and capability gaps to be addressed, establish  departmentwide investment priorities, and guide decision making. Over the  years, we have recommended that DOD adopt such a strategy, and DOD  has undertaken various efforts to identify, and plan for, future logistics  needs. However, DOD currently lacks an overarching logistics strategy. In  December 2005, DOD issued its “As Is” Focused Logistics Roadmap, which  assembled various logistics programs and initiatives associated with the  fiscal year 2006 President’s Budget and linked them to seven key joint  future logistics capability areas. The roadmap identified more than $60  billion of planned investments in these programs and initiatives, yet it also  indicated that key focused logistics capabilities would not be achieved by  2015. Therefore, the Under Secretary of Defense for Acquisition,  Technology, and Logistics directed the department to prepare a rigorous  “To Be” roadmap that would present credible options to achieve focused  logistics capabilities.
According to officials with the Office of the Secretary of Defense, the “To  Be” logistics roadmap will portray where the department is headed in the  logistics area and how it will get there, and will allow the department to  monitor progress toward achieving its objectives, as well as institutionalize  a continuous assessment process that links ongoing capability  development, program reviews, and budgeting. It would identify the scope  of logistics problems and capability gaps to be addressed and include  specific performance goals, programs, milestones, resources, and metrics  to guide improvements in supply chain management and other areas of  DOD logistics. Officials anticipate that the initiatives in the supply chain  management improvement plan will be incorporated into the “To Be”  logistics roadmap.
DOD has not established a target date for completing the “To Be” roadmap.  According to DOD officials, its completion is pending the results of the  department’s ongoing test of new concepts for managing logistics  capabilities. The Deputy Secretary of Defense initiated this joint capability  portfolio management test in September 2006 to explore new approaches  for managing certain capabilities across the department, facilitating  strategic choices, and improving the department’s ability to make  capability trade-offs. The intent of joint capability portfolio management is  to improve interoperability, minimize redundancies and gaps, and  maximize effectiveness. Joint logistics is one of the four capability areas  selected as test cases for experimentation. The joint logistics test case  portfolio will include all capabilities required to project and sustain joint  force operations, including supply chain operations. According to DOD  officials, initial results of the joint logistics capability portfolio  management test are expected to be available in late spring 2007, and the  results of the test will then be used to complete the “To Be” logistics  roadmap. The results of the test are also expected to provide additional  focus on improving performance in requirements determination, asset  visibility, and materiel distribution, officials said.
We have also noted previously that while DOD and its component  organizations have had multiple plans for improving aspects of logistics,  the linkages among these plans have not been clearly shown. In addition to  the supply chain management improvement plan, current DOD plans that  address aspects of supply chain management include the Enterprise  Transition Plan and component-level plans developed by the military  services and the Defense Logistics Agency. Although we are encouraged by  DOD’s planning efforts, the department lacks a comprehensive, integrated  strategy to guide logistics programs and initiatives across the department.
Without such a strategy, decision makers will lack the means to effectively  guide program efforts and the ability to determine if these efforts are  achieving the desired results.
section_title: DOD Is Unable to Demonstrate the Full Extent of Its Progress Toward Improving Supply Chain Management
paragraphs: Although DOD is making progress implementing supply chain management  initiatives, it is unable to demonstrate at this time the full extent to which it  is improving supply chain management. DOD has established some high- level performance measures but they do not explicitly address the focus  areas, and an improvement in those measures cannot be directly attributed  to the initiatives. Further, the metrics in DOD’s supply chain management  improvement plan generally do not measure performance outcomes and  costs.
subsections: section_title: DOD Is Making Progress Implementing Supply Chain Management Initiatives
paragraphs: In addition to implementing audit recommendations, as discussed in the  next section of this report, DOD is making progress improving supply chain  management by implementing initiatives in its supply chain management  improvement plan. For example, DOD has met key milestones in its Joint  Regional Inventory Materiel Management, Radio Frequency Identification,  and Item Unique Identification initiatives.
Through its Joint Regional Inventory Materiel Management initiative,  DOD began to streamline the storage and distribution of defense  inventory items on a regional basis, in order to eliminate duplicate  materiel handling and inventory layers. Last year, DOD completed a  pilot for this initiative in the San Diego region and, in January 2006,  began a similar transition for inventory items in Oahu, Hawaii, which  was considered operational in August 2006.
In May 2006, DOD published an interim Defense Federal Acquisition  Regulation clause governing the application of tags to different classes  of assets being shipped to distribution depots and aerial ports for the  Radio Frequency Identification initiative.
The Item Unique Identification initiative, which provides for marking of  personal property items with a set of globally unique data items to help  DOD value and track items throughout their life cycle, received approval  by the International Organization for Standardization/International  Electrotechnical Commission in September 2006 for an interoperable  solution for automatic identification and data capture based on widely  used international standards.
DOD has sought to demonstrate significant improvement in supply chain  management within 2 years of the plan’s inception in July 2005; however,  the department may have difficulty meeting its July 2007 goal. Some of the  initiatives are still being developed or piloted and have not yet reached the  implementation stage, others are in the early stages of implementation, and  some are not scheduled for completion until 2008 or later. For example,  according to DOD’s plan, the Readiness Based Sparing initiative, an  inventory requirements methodology that the department expects will  enable higher levels of readiness at equivalent or reduced inventory costs  using commercial off-the-shelf software, is not expected to begin  implementation until January 2008. The Item Unique Identification  initiative, which involves marking personal property items with a set of  globally unique data elements to help DOD track items during their life  cycles, will not be completed until December 2010 under the current  schedule.
While DOD has generally stayed on track, it has reported some slippage in  meeting scheduled milestones for certain initiatives. For example, a  slippage of 9 months occurred in the Commodity Management initiative  because additional time was required to develop a departmentwide  approach. This initiative addresses the process of developing a systematic  procurement approach to the department’s needs for a group of items.  Additionally, according to DOD’s plan, the Defense Transportation  Coordination initiative experienced a slippage in holding the presolicitation  conference because defining requirements took longer than anticipated.  Given the long-standing nature of the problems being addressed, the  complexities of the initiatives, and the involvement of multiple  organizations within DOD, we would expect to see further milestone  slippage in the future.
section_title: DOD’s Supply Chain Management Plan Does Not Track Performance Outcomes and Costs Metrics Associated with Focus Areas and Initiatives
paragraphs: The supply chain management improvement plan generally lacks outcome- focused performance metrics that track progress in the three focus areas  and at the initiative level. Performance metrics are critical for  demonstrating progress toward achieving results, providing information on  which to base organizational and management decisions, and are important  management tools for all levels of an agency, including the program or  project level. Moreover, outcome-focused performance metrics show  results or outcomes related to an initiative or program in terms of its  effectiveness, efficiency, impact, or all of these. To track progress toward  goals, effective performance metrics should have a clearly apparent or  commonly accepted relationship to the intended performance, or should be  reasonable predictors of desired outcomes; are not unduly influenced by  factors outside a program’s control; measure multiple priorities, such as  quality, timeliness, outcomes, and cost; sufficiently cover key aspects of  performance; and adequately capture important distinctions between  programs. Performance metrics enable the agency to assess  accomplishments, strike a balance among competing interests, make  decisions to improve program performance, realign processes, and assign  accountability. While it may take years before the results of programs  become apparent, intermediate metrics can be used to provide information  on interim results and show progress towards intended results. In addition,  when program results could be influenced by external factors, intermediate  metrics can be used to identify the program’s discrete contribution to the  specific result.
DOD’s plan does include four high-level performance measures that are  being tracked across the department, and while they are not required to do  so, these measures do not explicitly relate to the focus areas. The four  measures are as follows:  Backorders—number of orders held in an unfilled status pending  receipt of additional parts or equipment through procurement or repair.
Customer wait time—number of days between the issuance of a  customer order and satisfaction of that order.
On-time orders—percentage of orders that are on time according to  DOD’s established delivery standards.
Logistics response time—number of days to fulfill an order placed on  the wholesale level of supply from the date a requisition is generated  until the materiel is received by the retail supply activity.
Additionally, these measures may be affected by many variables; hence,  improvements in the high-level performance measures cannot be directly  attributed to the initiatives in the plan. For example, implementing RFID at  a few sites at a time has only a very small impact on customer wait time.  However, variables such as natural disasters, wartime surges in  requirements, or disruption in the distribution process could affect that  measure. DOD’s supply chain materiel management regulation requires  that functional supply chain metrics support at least one enterprise-level  metric.
DOD’s plan also lacks outcome-focused performance metrics for 6 of the 10  specific improvement initiatives contained in the plan. For example, while  DOD intended to have RFID implemented at 100 percent of its U.S. and  overseas distribution centers by September 2007—a measure indicating  when scheduled milestones are met—it had not yet identified outcome- focused performance metrics that could be used to show the impact of  implementation on expected outcomes, such as receiving and shipping  timeliness, asset visibility, or supply consumption data. Two other  examples of improvement initiatives that lack outcome-focused  performance metrics are War Reserve Materiel, which aims to more  accurately forecast war reserve requirements by using capability-based  planning and incorporating lessons learned in Operation Iraqi Freedom,  and Joint Theater Logistics, which is an effort to improve the ability of a  joint force commander to execute logistics authorities and processes  within a theater of operations.
One of the challenges in developing departmentwide supply chain  performance measures, according to a DOD official, is obtaining  standardized, reliable data from noninteroperable systems. For example,  the Army currently does not have an integrated method to determine  receipt processing for Supply Support Activities, which could affect asset  visibility and distribution concerns. Some of the necessary data reside in  the Global Transportation Network while other data reside in the Standard  Army Retail Supply System. These two databases must be manually  reviewed and merged in order to obtain the information for accurate  receipt processing performance measures. Nevertheless, we believe that  intermediate measures, such as outcome-focused measures for each of the  initiatives or for the focus areas, could show near-term progress.
According to a DOD official, in September 2006, DOD awarded a year-long  supply chain benchmarking contract to assess commercial supply chain  metrics. The official indicated that six outcome measures were chosen for  the initial effort: on-time delivery, order fulfillment cycle time, perfect order  fulfillment, supply chain management costs, inventory days of supply, and  forecast accuracy. Furthermore, the specific supply chains to be reviewed  will be recommended by the various DOD components and approved by an  executive committee. According to the same DOD official, the contractor  will be looking at the specific supply chains approved and the industry  equivalent; and a set of performance scorecards mapping the target supply  segment to average and best-in-class performance from the comparison  population will be developed for each supply chain and provided to the  component. This assessment is a good step but it is too early to determine  the effectiveness of this effort in helping DOD to demonstrate progress  toward improving its supply chain management.
Further, we noted that DOD has not provided cost metrics that might show  efficiencies gained through supply chain improvement efforts. In addition  to improving the provision of supplies to the warfighter and improving  readiness of equipment, DOD’s stated goal in its supply chain management  improvement plan is to reduce or avoid costs. However, 9 of the 10  initiatives in the plan lack cost metrics. Without outcome-focused  performance and cost metrics for each of the improvement initiatives that  are linked to the focus areas, such as requirements forecasting, asset  visibility, and materiel distribution, it is unclear whether DOD is  progressing toward meeting its stated goal.
section_title: DOD Has Implemented Recommendations for Improving Aspects of Supply Chain Management
paragraphs: Over the last 5 years, audit organizations have made more than 400  recommendations that focused specifically on improving certain aspects of  DOD’s supply chain management. DOD or the component organization  concurred with almost 90 percent of these recommendations, and most of  the recommendations that were closed as of the time of our review were  considered implemented. We determined that the three focus areas of  requirements forecasting, asset visibility, and materiel distribution  accounted for 41 percent of the total recommendations made, while other  inventory management and supply chain issues accounted for the  remaining recommendations. We also grouped the recommendations into  five common themes—management oversight, performance tracking,  policy, planning, and processes. Several studies conducted by non-audit  organizations have made recommendations that address supply chain  management as part of a broader review of DOD logistics.
Appendixes I through V summarize the audit recommendations we  included in our baseline. Appendix VI summarizes recommendations made  by non-audit organizations.
subsections: section_title: DOD or the Component Organization Concurred with Most of the Recommendations
paragraphs: In developing a baseline of supply chain management recommendations,  we identified 478 supply chain management recommendations made by  audit organizations between October 2001 and September 2006. DOD or the  component organization concurred with 411 (86 percent) of the  recommendations; partially concurred with 44 recommendations (9  percent); and nonconcurred with 23 recommendations (5 percent).
These recommendations cover a diverse range of objectives and issues  concerning supply chain management. For example, one recommendation  with which DOD concurred was contained in our 2006 report on  production and installation of Marine Corps truck armor. To better  coordinate decisions about what materiel solutions are developed and  procured to address common urgent wartime requirements, we  recommended—and DOD concurred—that DOD should clarify the point at  which the Joint Urgent Operational Needs process should be utilized when  materiel solutions require research and development.
In another case, DOD partially concurred with a recommendation in our  2006 report on Radio Frequency Identification (RFID), which consists of  electronic tags that are attached to equipment and supplies being shipped  from one location to another, enabling shipment tracking. To better track  and monitor the use of RFID tags, we recommended—and DOD partially  concurred—that the secretaries of each military service and the  administrators of other components should determine requirements for the  number of tags needed, compile an accurate inventory of the number of  tags currently owned, and establish procedures to monitor and track tags, including purchases, reuse, losses, and repairs. In its response to our  report, DOD agreed to direct the military services and the U.S.  Transportation Command to develop procedures to address the reuse of  the tags as well as procedures for the return of tags no longer required.  However, the department did not agree to establish procedures to account  for the procurement, inventory, repair, or losses of existing tags in the  system.
On the other hand, an example of a recommendation that DOD did not  concur with was contained in our 2005 report on supply distribution  operations. To improve the overall efficiency and interoperability of  distribution-related activities, we recommended—but DOD did not  concur—that the Secretary of Defense should clarify the scope of  responsibilities, accountability, and authority between U.S. Transportation  Command’s role as DOD’s Distribution Process Owner and other DOD  components. In its response to our report, DOD stated that the  responsibilities, accountability, and authority of this role were already  clear.
section_title: Most Closed Recommendations Were Considered Implemented
paragraphs: The audit organizations had closed 315 (66 percent) of the 478  recommendations at the time we conducted our review. Of the closed  recommendations, 275 (87 percent) were implemented and 40 (13 percent)  were not implemented as reported by the audit agencies. For example, one  closed recommendation that DOD implemented was in our 2005 report on  oversight of prepositioning programs. To address the risks and  management challenges facing the department’s prepositioning programs  and to improve oversight, we recommended that the Secretary of Defense  direct the Chairman, Joint Chiefs of Staff assess the near-term operational  risks associated with current inventory shortfalls and equipment in poor condition should a conflict arise. In response to our recommendation, the  Joint Staff conducted a mission analysis on several operational plans based  on the readiness of prepositioned assets. On the other hand, an example of  a closed recommendation that DOD did not implement was in our 2003  report on Navy spare parts shortages. To provide a basis for management to  assess the extent to which ongoing and planned initiatives will contribute  to the mitigation of critical spare parts shortages, we recommended that  the Secretary of Defense direct the Secretary of the Navy to develop a  framework that includes long-term goals; measurable, outcome-related  objectives; implementation goals; and performance measures as a part of  either the Navy Sea Enterprise strategy or the Naval Supply Systems  Command Strategic Plan. DOD agreed with the intent of the  recommendation, but not the prescribed action. The recommendation was  closed but not implemented because the Navy did not plan to modify the  Naval Supply Systems Command Strategic Plan or higher-level Sea  Enterprise Strategy to include a specific focus on mitigating spare parts  shortages.
section_title: Recommendations to Improve Supply Chain Management Address Five Common Themes
paragraphs: Audit recommendations addressing the three focus areas in DOD’s supply  chain management improvement plan—requirements forecasting, asset  visibility, and materiel distribution—accounted for 196 (41 percent) of the  total recommendations. The fewest recommendations were made in the  focus area of distribution, accounting for just 6 percent of the total. Other  inventory management issues accounted for most of the other  recommendations. In addition, a small number of recommendations, less  than 1 percent of the total, addressed supply chain management issues that  could not be grouped under any of these other categories. In further  analyzing the recommendations, we found that they addressed five  common themes—management oversight, performance tracking, policy,  planning, and processes. Table 1 shows the number of audit  recommendations made by focus area and theme.
Most of the recommendations addressed processes (38 percent),  management oversight (30 percent), or policy (22 percent), with  comparatively fewer addressing planning (7 percent) and performance  tracking (4 percent). The management oversight theme includes any  recommendations involving compliance, conducting reviews, or providing  information to others. For example, the Naval Audit Service recommended  that the Office of the Commander, U.S. Fleet Forces Command should  enforce existing requirements that ships prepare and submit Ship  Hazardous Material List Feedback Reports and Allowance Change  Requests, whenever required. The performance tracking theme includes  recommendations with performance measures, goals, objectives, and  milestones. For example, the Army Audit Agency recommended that  funding for increasing inventory safety levels be withheld until the Army  Materiel Command develops test procedures and identifies key  performance indicators to measure and assess its cost-effectiveness and  impact on operational readiness. The policy theme contains  recommendations on issuing guidance, revising or establishing policy, and  establishing guidelines. For example, the DOD-IG recommended that the  Defense Logistics Agency revise its supply operating procedures to meet  specific requirements. The planning theme contains recommendations  related to plan, doctrine, or capability development or implementation, as  well as any recommendations related to training. For example, the Army  Audit Agency recommended the Defense Supply Center in Philadelphia  implement a Quality Assurance Surveillance Plan that encompasses all  requirements of the prime vendor contract. The largest theme, processes,  consists of recommendations that processes and procedures should be  established or documented, and recommendations be implemented. For  example, we recommended that the Secretary of Defense direct the service  secretaries to establish a process to share information between the Marine  Corps and Army on developed or developing materiel solutions.
section_title: Non-audit Organizations’ Recommendations Address Supply Chain Management as Part of a Broader Review of DOD Logistics
paragraphs: Studies conducted by non-audit organizations contain recommendations  that address supply chain management as part of a broader review of DOD  logistics. For example, the Center for Strategic and International Studies  and the Defense Science Board suggested the creation of a departmentwide  logistics command responsible for end-to-end supply chain operations. In  July 2005, the Center for Strategic and International Studies issued a report,  “Beyond Goldwater-Nichols: U.S. Government and Defense Reform for a  New Strategic Era,” which addressed the entire U.S. national security  structure, including the organization of logistics support. In this report, the  study team acknowledged that recent steps, such as strengthening joint  theater logistics and the existence of stronger coordinating authorities  have significantly increased the unity of effort in logistical support to  ongoing operations. However, according to the study, much of this reflects  the combination of exemplary leadership and the intense operational pull  of Operation Iraqi Freedom, and has not been formalized and  institutionalized by charter, doctrine, or organizational realignment. It  further noted that the fact that a single Distribution Process Owner was  needed to overcome the fragmented structure of DOD’s logistical system  underscores the need for fundamental reform. The study team  recommended the integration of the management of transportation and  supply warehousing functions under a single organization such as an  integrated logistics command. The report noted that the Commission on  Roles and Missions also had recommended the formation of a logistics  command back in 1995.
In 2005, the Summer Study Task Force on Transformation, under the  direction of the Under Secretary of Defense for Acquisition, Technology,  and Logistics, convened to assess DOD’s transformation progress,  including the transformation of logistics capabilities. In this assessment,  issued in February 2006, the Defense Science Board suggested that each  segment in the supply chain is optimized for that specific function. For  example, in the depot shipping segment of the supply chain, packages are  consolidated into truck-size loads in order to fill the trucks for efficiency.  Yet, optimizing each segment inevitably suboptimizes the major objective  of end-to-end movement from source to user. The Defense Science Board  report further indicated that although the assignment of the U.S.  Transportation Command as the Distribution Process Owner was an  important step towards addressing an end-to-end supply change, it did not  go far enough to meet the objective of an effective supply chain. The  necessary step is to assign a joint logistics command the authority and  accountability for providing this essential support to global operations.
Unlike recommendations made by audit agencies, DOD does not  systematically track the status of recommendations made by non-audit  organizations. Hence, in our analysis, we did not determine the extent to  which DOD concurred with or implemented recommendations from these  organizations.
section_title: Conclusions
paragraphs: Overcoming systemic, long-standing problems requires comprehensive  approaches. Improving DOD’s supply chain management will require  continued progress in defense business transformation, including  completion of a comprehensive, integrated strategy to guide the  department’s logistics programs and initiatives. In addition, while DOD has  made a commitment to improving supply chain management, as  demonstrated by the development and implementation of the supply chain  management improvement plan, the plan generally lacks outcome-focused  performance metrics that would enable DOD to track and demonstrate the  extent to which its individual efforts improve supply chain management or  the extent of improvement in the three focus areas of requirements  forecasting, asset visibility, and materiel distribution. Furthermore, without  cost metrics, it will be difficult to show efficiencies gained through supply  chain improvement initiatives.
section_title: Recommendations for Executive Action
paragraphs: To improve DOD’s ability to guide logistics programs and initiatives across  the department and to demonstrate the effectiveness, efficiency, and  impact of its efforts to resolve supply chain management problems, we  recommend that the Secretary of Defense direct the Under Secretary of  Defense for Acquisition, Technology, and Logistics to take the following  two actions: Complete the development of a comprehensive, integrated logistics  strategy that is aligned with other defense business transformation efforts,  including the Enterprise Transition Plan. To facilitate completion of the  strategy, DOD should establish a specific target date for its completion.  Further, DOD should take steps as appropriate to ensure the supply chain  management improvement plan and component-level logistics plans are  synchronized with the department’s overall logistics strategy.
Develop, implement, and monitor outcome-focused performance and cost  metrics for all the individual initiatives in the supply chain management  improvement plan as well as for the plan’s focus areas of requirements  forecasting, asset visibility, and materiel distribution.
section_title: Agency Comments and Our Evaluation
paragraphs: In its written comments on a draft of this report, DOD concurred with our  recommendations. The department’s response are reprinted in appendix  VII.
In response to our recommendation to complete the development of a  comprehensive, integrated logistics strategy, DOD stated that the strategy  is under development and is aligned with other defense business  transformation efforts. DOD estimated that the logistics strategy would be  completed 6 months after it completes the logistics portfolio test case in  the spring of 2007. DOD did not address whether it would take steps to  ensure the supply chain management improvement plan and component- level logistics plans are synchronized with the department’s overall  logistics strategy. We continue to believe that these plans must be  synchronized with the overall logistics strategy to effectively guide  program efforts across the department and to provide the means to  determine if these efforts are achieving the desired results.
In response to our recommendation to develop, implement, and monitor  outcome-focused performance and cost metrics, the department indicated  it has developed and implemented outcome-focused performance and cost  metrics for logistics across the department. However, DOD acknowledged  that more work needs to be accomplished in linking the outcome metrics to  the initiatives in the supply chain management improvement plan as well as  for the focus areas of requirements forecasting, asset visibility, and  materiel distribution. DOD stated that these linkages will be completed as  part of full implementation of each initiative. We are pleased that the  department recognized the need for linking outcome-focused metrics with  the individual initiatives and the three focus areas in its supply chain  management improvement plan. However, it is unclear from DOD’s  response how and under what timeframes the department plans to  implement this goal.  As we noted in the report, DOD lacks outcome- focused performance metrics for supply chain management, in part  because one of the challenges is obtaining standardized, reliable data from  noninteroperable systems.  In addition, initiatives in the supply chain  management plan are many years away from full implementation.  If DOD  waits until full implementation to incorporate outcome-based metrics, it  will miss opportunities to assess progress on an interim basis.  We also  continue to believe that cost metrics are critical for DOD to assess progress  toward meeting its stated goal of improving the provision of supplies to the  warfighter and improving readiness of equipment while reducing or  avoiding costs through its supply chain initiatives.
section_title: Scope and Methodology
paragraphs: Our discussion of the integration of supply chain management with broader  defense transformation efforts is based primarily on our prior reports and  testimonies. We obtained information on DOD’s “To Be” logistics roadmap  and the joint logistics capabilities portfolio management test from senior  officials in the Office of the Deputy Under Secretary of Defense for  Logistics, Materiel, and Readiness. We met regularly with DOD and OMB  officials to discuss the overall status of the supply chain management  improvement plan, the implementation schedules of the plan’s individual  initiatives, and the plan’s performance measures. We visited and  interviewed officials from U.S. Transportation Command, the Defense  Logistics Agency, the military services, and the Joint Staff to gain their  perspectives on improving supply chain management.
To develop a baseline of recommended supply chain management  improvements, we surveyed audit reports covering the time period of  October 2001 to September 2006. We selected this time period because it  corresponds with recent military operations that began with the onset of  Operation Enduring Freedom and, later, Operation Iraqi Freedom. We  surveyed audit reports issued by our office, the DOD-IG, the Army Audit  Agency, the Naval Audit Service, and the Air Force Audit Agency.
For each audit recommendation contained in these reports, we determined  its status and focus. To determine the status of GAO recommendations, we  obtained data from our recommendation tracking system. We noted  whether DOD concurred with, partially concurred with, or did not concur  with each recommendation. In evaluating agency comments on our reports,  we have noted instances where DOD agreed with the intent of a  recommendation but did not commit to taking any specific actions to  address it. For the purposes of this report, we counted these as concurred  recommendations. We also noted whether the recommendation was open,  closed and implemented, or closed and not implemented. In a similar  manner, we worked with DOD-IG and the service audit agencies to  determine the status of their recommendations. We verified with each of  the audit organizations that they agreed with our definition that a  recommendation is considered “concurred with” when the audit  organization determines that DOD or the component organization fully  agreed with the recommendation in it entirety and its prescribed actions,  and “partially concurred with” is when the audit organization determines  that DOD or the component organization agreed to parts of the  recommendation or parts of its prescribed actions. Furthermore, we  verified that a recommendation is officially “closed” when the audit  organization determines that DOD or the component organization has  implemented its provisions or otherwise met the intent of the  recommendation; when circumstances have changed, and the  recommendation is no longer valid; or when, after a certain amount of time,  the audit organization determines that implementation cannot reasonably  be expected. We also verified that an “open” recommendation is one that  has not been closed for one of the preceding reasons. We assessed the  reliability of the data we obtained from DOD-IG and the service audit  agencies by obtaining information on how they track and follow up on  recommendations and determined that their data were sufficiently reliable  for our purposes.
In analyzing the focus of recommendations, we identified those addressing  three specific areas—requirements forecasting, asset visibility, and  materiel distribution—as well those addressing other supply chain  management concerns. We selected these three focus areas as the  framework for our analysis based on our prior work in this high-risk area  and because DOD has structured its supply chain management  improvement plan around them. We then analyzed the recommendations  and further divided them into one of five common themes: management  oversight, performance tracking, planning, process, and policy. To identify  the focus area and theme for each report and recommendation, three  analysts independently labeled each report with a focus area and identified  a theme for each recommendation within the report. The team of analysts  then reviewed the results, discussed any discrepancies, and reached  agreement on the appropriate theme for each recommendation. In the  event of a discrepancy which could not be immediately resolved, we  referred to the original report to clarify what the intent of the report had  been in order to decide on the appropriate focus area and theme. For the  purpose of our analysis, if a recommendation consisted of multiple actions,  we counted and classified each action separately. We excluded from our  analysis recommendations that addressed only a specific piece of  equipment or system. We also excluded recommendations that addressed  other DOD high-risk areas, such as business systems modernization and  financial management. While we included recommendations by non-audit  organizations in our analysis, we did not determine the extent to which  DOD concurred with or implemented them because their status is not  systemically tracked.
We conducted our review from January through November 2006 in  accordance with generally accepted government auditing standards.
We are sending copies of this report to the Director, Office of Management  and Budget; the Secretary of Defense; the Deputy Secretary of Defense; the  Under Secretary of Defense for Acquisition, Technology, and Logistics; and  other interested parties. This report will also be available at no charge on  our Web site at http://www.gao.gov.
Should you or your staff have any questions concerning this report, please  contact me at (202) 512-8365 or solisw@gao.gov. Key contributors to this  report are listed in appendix VIII.
section_title: Supply Chain Management: Summary of GAO Report Recommendations
paragraphs: To ensure that the services  make informed and  coordinated decisions about  what materiel solutions are  developed and procured to  address common urgent  wartime requirements, GAO  recommended that the  Secretary of Defense take  the following two actions: (1) Direct the service secretaries to establish a process to  share information between the Marine Corps and the Army  on developed or developing materiel solutions, and (2) Clarify the point at which the Joint Urgent Operational  Needs process should be utilized when materiel solutions  require research and development.
GAO recommended that the Secretary of Defense direct the  Under Secretary of Defense, Acquisition, Technology and  Logistics to ensure that the Director of the Defense Logistics  Agency provide continual management oversight of the  corrective actions to address pricing problems in the prime  vendor program.
GAO recommended that the  Secretary of Defense take  the following seven actions:  To ensure DOD inventory  management centers  properly assign codes to  categorize the reasons to  retain items in contingency  retention inventory, direct  the Under Secretary of  Defense for Acquisition,  Technology, and Logistics to: (1) Direct the Secretary of the Army to instruct the Army  Materiel Command to modify the Commodity Command  Standard System so it will properly categorize the reasons  for holding items in contingency retention inventory. (2) Direct the Secretary of the Air Force to instruct the Air  Force Materiel Command to correct the Application  Programs, Indenture system’s deficiency to ensure it  properly categorizes the reasons for holding items in  contingency retention inventory.
To ensure that the DOD  inventory management  centers retain contingency  retention inventory that will  meet current and future  operational requirements,  direct the Under Secretary  of Defense for Acquisition,  Technology, and Logistics to: (3) Direct the Secretary of the Army to instruct the Army  Materiel Command to require the Aviation and Missile  Command to identify items that no longer support  operational needs and determine whether the items need to  be removed from the inventory. The Army Materiel  Command should also determine whether its other two  inventory commands, the Communications-Electronics  Command and Tank-automotive and Armaments Command,  are also holding obsolete items, and if so, direct those  commands to determine whether the disposal of those items  is warranted.
To ensure that DOD  inventory management  centers conduct annual  reviews of contingency  retention inventory as  required by DOD’s Supply  Chain Materiel Management  Regulation, direct the Under  Secretary of Defense for  Acquisition, Technology, and  Logistics to: (4) Direct the Director of the Defense Logistics Agency to  require the Defense Supply Center Richmond to conduct  annual reviews of contingency retention inventory. The  Defense Logistics Agency should also determine whether its  other two centers, the Defense Supply Center Columbus  and the Defense Supply Center Philadelphia, are conducting  annual reviews, and if not, direct them to conduct the  reviews so they can ensure the reasons for retaining the  contingency retention inventory are valid. (5) Direct the Secretary of the Navy to instruct the Naval  Inventory Control Point Mechanicsburg to conduct annual  reviews of contingency retention inventory. The Naval  Inventory Control Point should also determine if its other  organization, Naval Inventory Control Point Philadelphia, is  conducting annual reviews and if not, direct the activity to  conduct the reviews so it can ensure the reasons for  retaining the contingency retention inventory are valid. (6) Direct the Secretary of the Army to instruct the Army  Materiel Command to require the Aviation and Missile  Command to conduct annual reviews of contingency  retention inventory. The Army Materiel Command should  also determine if its other two inventory commands, the  Communications-Electronics Command and Tank- automotive and Armaments Command, are conducting  annual reviews and if not, direct the commands to conduct  the reviews so they can ensure the reasons for retaining the  contingency retention inventory are valid.
To ensure that DOD  inventory management  centers implement  departmentwide policies  and procedures for  conducting annual reviews  of contingency retention  inventories, direct the Office  of the Deputy Under  Secretary of Defense for  Logistics and Materiel  Readiness to take the  following action: (7) Revise the DOD’s Supply Chain Materiel Management  Regulation to make clear who is responsible for providing  recurring oversight to ensure the inventory management  centers conduct the annual reviews of contingency retention  inventory.
To ensure funding needs for urgent wartime requirements  are identified quickly, requests for funding are well  documented, and funding decisions are based on risk and  an assessment of the highest priority requirements, GAO  recommended the Secretary of Defense direct the Secretary  of the Army to establish a process to document and  communicate all urgent wartime funding requirements for  supplies and equipment at the time they are identified and  the disposition of funding decisions.
GAO recommended that the  Secretary of Defense direct  the Under Secretary of  Defense (Acquisition,  Technology, and Logistics)  to take the following two  actions: (1) Modify the July 30, 2004, RFID policy and other  operational guidance to require that active RFID tags be  returned for reuse or be reused by the military services and  other users. (2) Direct the secretaries of each military service and  administrators of other components to establish procedures  to track and monitor the use of active RFID tags, to include  determining requirements for the number of tags needed,  compiling an accurate inventory of the number of tags   establishing procedures to monitor and track tags,  including purchases, reuse, losses, repairs, and any other  categories that would assist management’s oversight of  these tags.
To improve accountability of  inventory shipped to Army  repair contractors, GAO  recommended that the  Secretary of Defense direct  the Secretary of the Army to  instruct the Commanding  General, Army Materiel  Command, to take the  following six actions: (1) Establish systematic procedures to obtain and document  contractors’ receipt of secondary repair item shipments in  the Army’s inventory management systems, and to follow up  on unconfirmed receipts within 45 days of shipment. (2) Institute policies, consistent with DOD regulations, for  obtaining and documenting contractors’ receipt of  government-furnished materiel shipments in the Army’s  inventory management systems. (3) Provide quarterly status reports of all shipments of Army  government-furnished materiel to Defense Contract  Management Agency, in compliance with DOD regulations. (4) Examine the feasibility of implementing DOD guidance  for providing advance notification to contractors at the time  of shipment and, if warranted, establish appropriate policies  and procedures for implementation. (5) Analyze receipt records for secondary repair items  shipped to contractors and take actions necessary to update  and adjust inventory management data prior to transfer to  the Logistics Modernization Program. These actions should  include investigating and resolving shipments that lack  matching receipts to determine their status. (6) To ensure consistent implementation of any new  procedures arising from the recommendations in this report,  provide periodic training to appropriate inventory control  point personnel and provide clarifying guidance concerning  these new procedures to the command’s repair contractors.
To enhance DOD’s ability to  take a more coordinated and  systemic approach to  improving the supply  distribution system, GAO  recommended that the  Secretary of Defense take  the following three actions: (1) Clarify the scope of responsibilities, accountability, and  authority between the Distribution Process Owner and the  Defense Logistics Executive as well as the roles and  responsibilities between the Distribution Process Owner, the  Defense Logistics Agency, and Joint Forces Command. (2) Issue a directive instituting these decisions and make  other related changes, as appropriate, in policy and doctrine. (3) Improve the Logistics Transformation Strategy by  directing the Under Secretary of Defense (Acquisition,  Technology, and Logistics) to include specific performance  goals, programs, milestones, and resources to achieve  focused logistics capabilities in the Focused Logistics  Roadmap.
To address the current underfunding of the Very Small  Aperture Terminal and the Mobile Tracking System, GAO  recommended that the Secretary of Defense direct the  Secretary of the Army to determine whether sufficient  funding priority has been be given to the acquisition of these  systems and, if not, to take appropriate corrective action.
To address the risks and  management challenges  facing the department’s  prepositioning programs and  improve oversight, GAO  recommended that the  Secretary of Defense take  the following five actions: (1) Direct the Chairman, Joint Chiefs of Staff, to assess the  near-term operational risks associated with current inventory  shortfalls and equipment in poor condition should a conflict  arise. (2) Direct the Under Secretary of Defense for Acquisition,  Technology, and Logistics to provide oversight over the  department’s prepositioning programs by fully implementing  the department’s directive on war reserve materiel and, if  necessary, revise the directive to clarify the lines of  accountability for this oversight. (3) Direct the Secretary of the Army to improve the  processes used to determine requirements and direct the  Secretary of the Army and Air Force to improve the  processes used to determine the reliability of inventory data  so that the readiness of their prepositioning programs can  be reliably assessed and proper oversight over the programs  can be accomplished. (4) Develop a coordinated departmentwide plan and joint  doctrine for the department’s prepositioning programs that  identifies the role of prepositioning in the transformed  military and ensures these programs will operate jointly,  support the needs of the war fighter, and are affordable. (5) Report to Congress, possibly as part of the mandated  October 2005 report, how the department plans to manage  the near-term operational risks created by inventory  shortfalls and management and oversight issues described  in this report.
Defense Logistics: Better Strategic  Planning Can Help Ensure DOD's  Successful Implementation of Passive  Radio Frequency Identification (GAO-05- 345, September 12, 2005)
GAO recommend that the  Secretary of Defense take  the following three actions: (1) Direct the Under Secretary of Defense (Acquisition,  Technology, and Logistics) to expand its current RFID  planning efforts to include a DOD-wide comprehensive  strategic management approach that will ensure that RFID  technology is efficiently and effectively implemented  throughout the department. This strategic management  approach should incorporate the following key management  principles:  an integrated strategy with goals, objectives, and results for  fully implementing RFID in the DOD supply chain process,  to include the interoperability of automatic information  systems;  a description of specific actions needed to meet goals and   performance measures or metrics to evaluate progress  toward achieving the goals;  schedules and milestones for meeting deadlines;  identification of total RFID resources needed to achieve full   an evaluation and corrective action plan. (2) Direct the secretaries of each military service and  administrators of other DOD military components to develop  individual comprehensive strategic management  approaches that support the DOD-wide approach for fully  implementing RFID into the supply chain processes. (3) Direct the Under Secretary of Defense (Acquisition,  Technology, and Logistics), the secretaries of each military  service, and administrators of other military components to  develop a plan that identifies the specific challenges  impeding passive RFID implementation and the actions  needed to mitigate these challenges. Such a plan could be  included in the strategic management approach that GAO  recommended they develop.
To improve the effectiveness  of DOD’s supply system in  supporting deployed forces  for contingencies, GAO recommended that the  Secretary of Defense direct  the Secretary of the Army to  take the following three  actions and specify when  they will be completed: (1) Improve the accuracy of Army war reserve requirements  and transparency about their adequacy by:  updating the war reserve models with OIF consumption  data that validate the type and number of items needed,  modeling war reserve requirements at least annually to  update the war reserve estimates based on changing  operational and equipment requirements, and  disclosing to Congress the impact on military operations of  its risk management decision about the percentage of war  reserves being funded.
Concurred with intent, open (2) Improve the accuracy of its wartime supply requirements  forecasting process by:  developing models that can compute operational supply  requirements for deploying units more promptly as part of  prewar planning and   providing item managers with operational information in a  timely manner so they can adjust modeled wartime  requirements as necessary. (3) Reduce the time delay in granting increased obligation  authority to the Army Materiel Command and its subordinate  commands to support their forecasted wartime requirements  by establishing an expeditious supply requirements  validation process that provides accurate information to  support timely and sufficient funding. (4) GAO also recommended that the Secretary of Defense  direct the Secretary of the Navy to improve the accuracy of  the Marine Corps’ wartime supply requirements forecasting  process by completing the reconciliation of the Marine  Corps’ forecasted requirements with actual OIF  consumption data to validate the number as well as types of  items needed and making necessary adjustments to their  requirements. The department should also specify when  these actions will be completed.
GAO recommended that the  Secretary of Defense direct  the Secretary of the Army  and Director of the Defense  Logistics Agency to take the  following two actions: (5) Minimize future acquisition delays by assessing the  industrial-base capacity to meet updated forecasted  demands for critical items within the time frames required by  operational plans as well as specify when this assessment  will be completed, and (6) Provide visibility to Congress and other decision makers  about how the department plans to acquire critical items to  meet demands that emerge during contingencies.
GAO also recommended the  Secretary of Defense take  the following three actions  and specify when they  would be completed: (7) Revise current joint logistics doctrine to clearly state,  consistent with policy, who has responsibility and authority  for synchronizing the distribution of supplies from the United  States to deployed units during operations; (8) Develop and exercise, through a mix of computer  simulations and field training, deployable supply receiving  and distribution capabilities including trained personnel and  related equipment for implementing improved supply  management practices, such as radio frequency  identification tags that provide in-transit visibility of supplies,  to ensure they are sufficient and capable of meeting the  requirements in operational plans; and (9) Establish common supply information systems that  ensure the DOD and the services can requisition supplies  promptly and match incoming supplies with unit requisitions  to facilitate expeditious and accurate distribution.
GAO continued to believe,  as it did in April 1999, that  DOD should develop a  cohesive, departmentwide  plan to ensure that total  asset visibility is achieved.  Specifically, GAO  recommended that the  Secretary of Defense  develop a departmentwide  long-term total asset  visibility strategy as part of  the Business Enterprise  Architecture that: (1) Describes the complete management structure and  assigns accountability to specific offices throughout the  department, with milestones and performance measures, for  ensuring timely success in achieving total asset visibility; (2) Identifies the resource requirements for implementing  total asset visibility and includes related investment analyses  that show how the major information technology investments  will support total asset visibility goals; (3) Identifies how departmentwide systems issues that affect  implementation of total asset visibility will be addressed; and (4) Establishes outcome-oriented total asset visibility goals  and performance measures for all relevant components and  closely links the measures with timelines for improvement. In  addition, since 2001, GAO made a number of  recommendations aimed at improving DOD’s refinement and  implementation of the business management modernization  program. Most recently, GAO identified the need to have  component plans clearly linked to the long-term objectives of  the department’s business management modernization  program. As they relate to total asset visibility, GAO  continued to believe that these recommendations were valid.
To reduce the likelihood of  releasing classified and  controlled spare parts that  DOD does not want to be  released to foreign  countries, GAO  recommended that the  Secretary of Defense take  the following three actions: (1) Direct the Under Secretary of Defense for Policy, in  conjunction with the Secretaries of the Army and the Navy,  and direct the Secretary of the Air Force to develop an  implementation plan, such as a Plan of Actions &  Milestones, specifying the remedial actions to be taken to  ensure that applicable testing and review of the existing  requisition-processing systems are conducted on a periodic  basis. (2) Direct the Under Secretary of Defense for Policy, in  conjunction with the Secretaries of the Army, the Air Force,  and the Navy, to determine whether current plans for  developing the Case Execution Management Information  System call for periodic testing and, if not, provide for such  testing. (3) Direct the Under Secretary of Defense for Policy, in  conjunction with the Secretary of the Navy, and direct the  Secretary of the Air Force to determine if it would be  beneficial to modify the Navy’s and the Air Force’s  requisition-processing systems so that the systems reject  requisitions for classified or controlled parts that foreign  countries make under blanket orders and preclude country  managers from manually overriding system decisions, and  to modify their systems as appropriate.
To improve the control of  government-furnished  material shipped to Navy  repair contractors, GAO  recommended that the  Secretary of Defense direct  the Secretary of the Navy to  instruct the Commander,  Naval Inventory Control  Point, to implement the  following three actions: (1) Require Navy repair contractors to acknowledge receipt  of material that is received from the Navy’s supply system as  prescribed by DOD procedure. (2) Follow up on unconfirmed material receipts within the 45  days as prescribed in the DOD internal control procedures to  ensure that the Naval Inventory Control Point can reconcile  material shipped to and received by its repair contractors. (3) Implement procedures to ensure that quarterly reports of  all shipments of government-furnished material to Navy  repair contractors are generated and distributed to the  Defense Contract Management Agency.
To address the inventory  management shortcomings  that GAO identified, GAO  recommended that the  Secretary of Defense take  the following three actions: (1) Direct the military services and the Defense Logistics  Agency to determine whether it would be beneficial to use  the actual storage cost data provided by Defense Logistics  Agency in their computations, instead of using estimated  storage costs, and include that data in their systems and  models as appropriate; (2) Direct the Secretary of the Air Force to establish and  implement a systemwide process for correcting causes of  inventory discrepancies between the inventory for which  item managers are accountable and the inventory reported  by bases and repair centers; and  (3) Direct the Secretary of the Air Force to revise its policy to  require item managers to code inventory so that the  inventory is properly categorized.
To improve internal controls  over the Navy’s foreign  military sales program and  to prevent foreign countries  from obtaining classified and  controlled spare parts under  blanket orders, GAO  recommended that the  Secretary of Defense  instruct the Secretary of the  Navy to take the following  six actions: (1) Consult with the appropriate officials to resolve the  conflict between the DOD and Navy policies on the Navy’s  use of waivers allowing foreign countries to obtain classified  spare parts under blanket orders. (2) Determine and implement the necessary changes  required to prevent the current system from erroneously  approving blanket order requisitions for classified spare  parts until the new system is deployed. (3) Establish policies and procedures for the Navy’s country  managers to follow when documenting their decisions to  override the system when manually processing blanket  order requisitions. (4) Require that the Navy’s country managers manually  enter blanket order requisitions into the Navy’s system to  correctly represent foreign-country-initiated orders versus  U.S. government-initiated orders so the Navy’s system will  validate whether the foreign countries are eligible to receive  the requested spare parts.
Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Partially concurred, closed, implemented Concurred, closed, implemented Partially concurred, closed, implemented (5) Establish policies and procedures to follow for blanket  orders when the Navy’s country managers replace spare  parts requested by manufacturer or vendor part numbers  with corresponding government national stock numbers. (6) Establish interim policies and procedures, after  consulting with appropriate government officials, for  recovering classified or controlled spare parts shipped to  foreign countries that might not have been eligible to receive  them under blanket orders until the Defense Security  Cooperation Agency develops guidance on this issue.
To improve the Navy  system’s internal controls  aimed at preventing foreign  countries from obtaining  classified and controlled  spare parts under blanket  orders, GAO recommended  that the Secretary of  Defense direct the Under  Secretary of Defense for  Policy to require the  appropriate officials to take  the following two actions: (7) Modify the Navy’s system to revalidate blanket order  requisitions when the Navy’s country manager replaces  spare parts that are requested by manufacturer or vendor  part numbers. (8) Periodically test the system to ensure that it is accurately  reviewing blanket order requisitions before approving them.
To improve internal controls  over the Army’s foreign  military sales program and  to prevent foreign countries  from being able to obtain  classified spare parts or  unclassified items  containing military  technology that they are not  eligible to receive under  blanket orders, GAO  recommended that the  Secretary of Defense  instruct the Secretary of the  Army to take the following  two actions: (1) Modify existing policies and procedures, after  consultation with the appropriate government officials, to  cover items shipped in lieu of items ordered to also ensure  the recovery of classified spare parts that have been  shipped to foreign countries that may not be eligible to  receive them under blanket orders. (2) Modify existing policies and procedures covering items,  after consultation with the appropriate government officials,  to cover items shipped in lieu of items ordered to also ensure  the recovery of unclassified items containing military  technology that have been shipped to foreign countries that  may not be eligible to receive them under blanket orders.
To improve the Army  system’s internal controls  aimed at preventing foreign  countries from obtaining  classified spare parts or  unclassified items  containing military  technology under blanket  orders, GAO recommended  that the Secretary of  Defense direct the Under  Secretary of Defense for  Policy to require the  appropriate officials to take  the following two actions: (3) Modify the system so that it identifies blanket order  requisitions for unclassified items containing military  technology that should be reviewed before they are  released. (4) Periodically test the system and its logic for restricting  requisitions to ensure that the system is accurately reviewing  and approving blanket order requisitions.
In order to improve supply  availability, enhance  operations and mission  readiness, and reduce  operating costs for deployed  ships, GAO recommended  the Secretary of Defense  direct the Secretary of the  Navy to: (1) Develop plans to conduct periodic ship configuration  audits and to ensure that configuration records are updated  and maintained in order that accurate inventory data can be  developed for deployed ships; (2) Ensure that demand data for parts entered into ship  supply systems are recorded promptly and accurately as  required to ensure that onboard ship inventories reflect  current usage or demands; (3) Periodically identify and purge spare parts from ship  inventories to reduce costs when parts have not been  requisitioned for long periods of time and are not needed  according to current and accurate configuration and parts  demand information; and  (4) Ensure that casualty reports are issued consistent with  high priority maintenance work orders, as required by Navy  instruction, to provide a more complete assessment of ship’s  readiness.
To improve the supply  availability of critical  readiness degrading spare  parts that may improve the  overall readiness posture of  the military services, GAO  recommended that the  Secretary of Defense direct  the Director of the Defense  Logistics Agency to: (1) Submit, as appropriate, requests for waiver(s) of the  provisions of the DOD Supply Chain Materiel Management  Regulation 4140.1-R that limit the safety level of supply parts  to specific demand levels. Such waivers would allow  Defense Logistics Agency to buy sufficient critical spare  parts that affect readiness of service weapon systems to  attain an 85 percent minimum availability goal;  (2) Change the agency’s current aggregate 85 percent  supply availability goal for critical spare parts that affect  readiness, to a minimum 85 percent supply availability goal  for each critical spare part, and because of the long lead  times in acquiring certain critical parts, establish annual  performance targets for achieving the 85 percent minimum  goal; and  (3) Prioritize funding as necessary to achieve the annual  performance targets and ultimately the 85 percent minimum  supply availability goal.
To improve internal controls  over the Air Force’s foreign  military sales program and  to minimize countries’  abilities to obtain classified  or controlled spare parts  under blanket orders for  which they are not eligible,  GAO recommended that the  Secretary of Defense  instruct the Secretary of the  Air Force to require the  appropriate officials to take  the following steps: (1) Modify the Security Assistance Management Information  System so that it validates country requisitions based on the  requisitioned item’s complete national stock number. (2) Establish policies and procedures for recovering  classified or controlled items that are erroneously shipped. (3) Establish polices and procedures for validating  modifications made to the Security Assistance Management  Information System to ensure that the changes were  properly made.  (4) Periodically test the Security Assistance Management  Information System to ensure that the system’s logic for  restricting requisitions is working correctly. (5) Establish a policy for command country managers to  document the basis for their decisions to override Security  Assistance Management Information System or foreign  military sales case manager recommendations.
GAO recommended that the  Secretary of Defense direct  the Secretary of the Navy to: (1) Develop a framework for mitigating critical spare parts  shortages that includes long-term goals; measurable,  outcome-related objectives; implementation goals; and  performance measures as a part of either the Navy Sea  Enterprise strategy or the Naval Supply Systems Command  Strategic Plan, which will provide a basis for management to  assess the extent to which ongoing and planned initiatives  will contribute to the mitigation of critical spare parts  shortages; and  (2) Implement the Office of the Secretary of Defense’s  recommendation to report, as part of budget requests, the  impact of funding on individual weapon system readiness  with a specific milestone for completion.
In order to improve the  department’s logistics  strategic plan to achieve  results for overcoming spare  parts shortages, improve  readiness, and address the  long-standing weaknesses  that are limiting the overall  economy and efficiency of  logistics operations, GAO  recommended that the  Secretary of Defense direct  the Under Secretary for  Acquisition, Technology, and  Logistics to: (1) Incorporate clear goals, objectives, and performance  measures pertaining to mitigating spare parts shortages in  the Future Logistics Enterprise or appropriate agencywide  initiatives to include efforts recommended by the Under  Secretary of Defense, Comptroller in his August 2002 study  report.
GAO also recommended  that the Secretary of  Defense direct the Under  Secretary of Defense,  Comptroller to (2) Establish reporting milestones and define how it will  measure progress in implementing the August 2002  Inventory Management Study recommendations related to  mitigating critical spare parts shortages.
GAO recommended that the  Secretary of Defense direct  the Secretary of the Air  Force to take the following  steps: (1) Incorporate the Air Force Strategic Plan’s performance  measures and targets into the subordinate Logistics Support  Plan and the Supply Strategic Plan. (2) Commit to start those remaining initiatives needed to  address the causes of spare parts shortages or clearly  identify how the initiatives have been incorporated into those  initiatives already underway.  (3) Adopt performance measures and targets for its  initiatives that will show how their implementation will affect  critical spare parts availability and readiness.  (4) Direct the new Innovation and Transformation Directorate  to establish plans and priorities for improving management  of logistics initiatives consistent with the Air Force Strategic  Plan. (5) Request spare parts funds in the Air Force’s budget  consistent with results of its spare parts requirements  determination process.
GAO recommended that the  Secretary of Defense direct  the Secretary of the Army  to: (1) Modify or supplement the Transformation Campaign  Plan, or the Army-wide logistics initiatives to include a focus  on mitigating critical spare parts shortages with goals,  objectives, milestones, and quantifiable performance  measures, such as supply availability and readiness-related  outcomes and (2) Implement the Office of Secretary of Defense  recommendation to report, as part of budget requests, the  impact of additional spare parts funding on equipment  readiness with specific milestones for completion.
Defense Inventory: Overall Inventory and  Requirements Are Increasing, but Some  Reductions in Navy Requirements Are  Possible (GA0-03-355, May 8, 2003)
To improve the accuracy of the Navy’s secondary inventory  requirements, GAO recommended that the Secretary of  Defense direct the Secretary of the Navy to require the  Commander, Naval Supply Systems Command, to require  its inventory managers to use the most current data  available for computing administrative lead time  requirements.
Given the importance of  spare parts to maintaining  force readiness, and as  justification for future budget  requests, actual and  complete information would  be important to DOD as well  as Congress. Therefore,  GAO recommended that the  Secretary of Defense: (1) Issue additional guidance on how the services are to  identify, compile, and report on actual and complete spare  parts spending information, including supplemental funding,  in total and by commodity, as specified by Exhibit OP-31 and  (2) Direct the Secretaries of the military departments to  comply with Exhibit OP-31 reporting guidance to ensure that  complete information is provided to Congress on the  quantities of spare parts purchased and explanations of  deviations between programmed and actual spending.
GAO recommended that the Secretary of Defense establish  a direct link between the munitions needs of the combatant  commands—recognizing the impact of weapons systems  and munitions preferred or expected to be employed—and  the munitions requirements determinations and purchasing  decisions made by the military services.
Defense Inventory: Improved Industrial  Base Assessment for Army War Reserve  Spares Could Save Money (GA0-02- 650, July 12, 2002)
In order to improve the  Army’s readiness for  wartime operations, achieve  greater economy in  purchasing decisions, and  provide Congress with  accurate budget  submissions for war reserve  spare parts, GAO  recommended that the  Secretary of Defense direct  the Secretary of the Army to  have the Commander of  Army Material Command  take the following actions to  expand or change its current  process consistent with the  attributes in this report: (1) Establish an overarching industrial base capability  assessment process that considers the attributes in this  report. (2) Develop a method to efficiently collect current industrial  base capability data directly from industry itself. (3) Create analytical tools that identify potential production  capability problems such as those due to surge in wartime  spare parts demand. (4) Create management strategies for resolving spare parts  availability problems, for example, by changing acquisition  procedures or by targeting investments in material and  technology resources to reduce production lead times.
To improve the control of  inventory being shipped,  GAO recommended that the  Secretary of Defense direct  the Secretary of the Air  Force to undertake the  following: Improve  processes for providing  contractor access to  government-furnished  material by: (1) Listing specific stock numbers and quantities of material  in repair contracts (as they are modified or newly written)  that the inventory control points have agreed to furnish to  contractors.  (2) Demonstrating that automated internal control systems  for loading and screening stock numbers and quantities  against contractor requisitions perform as designed.  (3) Loading stock numbers and quantities that the inventory  control points have agreed to furnish to contractors into the  control systems manually until the automated systems have  been shown to perform as designed. (4) Requiring that waivers to loading stock numbers and  quantities manually are adequately justified and  documented based on cost-effective and/or mission-critical  needs.
Revise Air Force supply  procedures to include  explicit responsibility and  accountability for: (5) Generating quarterly reports of all shipments of Air Force  material to contractors. (6) Distributing the reports to Defense Contract  Management Agency property administrators.  (7) Determine, for the contractors in our review, what actions  are needed to correct problems in posting material receipts. (8) Determine, for the contractors in our review, what actions  are needed to correct problems in reporting shipment  discrepancies. (9) Establish interim procedures to reconcile records of  material shipped to contractors with records of material  received by them, until the Air Force completes the transition  to its Commercial Asset Visibility system in fiscal year 2004. (10) Comply with existing procedures to request, collect, and  analyze contractor shipment discrepancy data to reduce the  vulnerability of shipped inventory to undetected loss,  misplacement, or theft.
For all programs, GAO  recommended that the  Secretary of Defense direct  the Director of the Defense  Logistics Agency to take the  following actions: (1) As part of the department’s redesign of its activity code  database, establish codes that identify the type of excess  property—by federal supply class—and the quantity that  each special program is eligible to obtain and provide  accountable program officers access to appropriate  information to identify any inconsistencies between what  was approved and what was received. (2) Reiterate policy stressing that Defense reutilization  facility staff must notify special program officials of the  specific tracking and handling requirements of hazardous  items and items with military technology/applications.
Concurred, closed, implemented Nonconcurred, closed, not implemented Partially concurred, closed, not implemented Partially concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, not implemented Concurred, closed, not implemented Concurred, closed, implemented Partially concurred, closed, not implemented Partially concurred, closed, implemented Concurred, closed, implemented GAO also recommended that the Secretary of Defense  ensure that accountable program officers within the  department verify, prior to approving the issuance of excess  property, the eligibility of special programs to obtain specific  types and amounts of property, including items that are  hazardous or have military technology/applications. This  could be accomplished, in part, through the department’s  ongoing redesign of its activity code database.
For each individual program,  GAO further recommended  the following:  (1) With regard to the 12th Congressional Regional  Equipment Center, that the Secretary of Defense direct the  Director of the Defense Logistics Agency to review and  amend, as necessary, its agreement with the Center in the  following areas:  (a) The Center’s financial responsibility for the cost of  shipping excess property obtained under the experimental  project, (b) The ancillary items the Center is eligible to receive, (c) The rules concerning the sale of property and  procedures for the Center to notify the Agency of all  proposed sales of excess property, (d) The Center’s responsibility for tracking items having  military technology/application and hazardous items, and (e) The need for Agency approval of the Center’s orders for  excess property. (2) With regard to the Army, the Navy, and the Air Force  Military Affiliate Radio Systems, GAO recommended that the  Secretary of Defense direct the Chairman of the Joint Chiefs  of Staff to have the Joint Staff Directorate for Command,  Control, Communications, and Computer Systems review  which items these systems are eligible to receive, on the  basis of their mission and needs, and direct each of the  Military Affiliate Radio Systems to accurately track excess  property, including pilferable items, items with military  technology/ applications, and hazardous items. (3) With regard to the Civil Air Patrol, GAO recommended  that the Secretary of Defense direct the Secretary of the Air  Force to have the Civil Air Patrol-Air Force review which  items the Patrol is eligible to receive, on the basis of its  mission and needs, and direct the Patrol to accurately track  its excess property, including pilferable items, items with  military technology/applications, and hazardous items.
To provide the military  services, the Defense  Logistics Agency, and the  U.S. Transportation  Command with a framework  for developing a  departmentwide approach  to logistics reengineering,  GAO recommended that the  Secretary of Defense direct  the Under Secretary of  Defense for Acquisition,  Technology, and Logistics to  revise the departmentwide  Logistics Strategic Plan to  provide for an overarching  logistics strategy that will  guide the components’  logistics planning efforts.  Among other things, this  logistics strategy should: (1) Specify a comprehensive approach that addresses the  logistics life-cycle process from acquisition through support  and system disposal, including the manner in which logistics  is to be considered in the system and equipment acquisition  process and how key support activities such as  procurement, transportation, storage, maintenance, and  disposal will be accomplished. (2) Identify the logistics requirements the department will  have to fulfill, how it will be organized to fulfill these  requirements, and who will be responsible for providing  specific types of logistics support. (3) Identify the numbers and types of logistics facilities and  personnel the department will need to support future  logistics requirements. (4) GAO also recommended that the Under Secretary of  Defense for Acquisition, Technology, and Logistics establish  a mechanism for monitoring the extent to which the  components are implementing the department’s Logistics  Strategic Plan. Specifically, the Under Secretary of Defense  for Acquisition, Technology, and Logistics should monitor the  extent to which the components’ implementation plans are  (a) consistent with the departmentwide plan, (b) directly  related to the departmentwide plan and to each other, and  (c) contain appropriate key management elements, such as  performance measures and specific milestones.
section_title: Supply Chain Management: Summary of DOD-IG Report Recommendations
paragraphs: Prepare quarterly statistic reports quantifying the cost  effectiveness of the special program requirement initiative  to reduce or cancel procurement actions by the use of  adjusted buy-back rates, segregated by Defense Supply  Centers.
A.1. Transmit shipment notification transactions to the  Defense Reutilization and Marketing Service when  materiel is shipped to the Defense Reutilization and  Marketing Office and ensure the data in the shipment  notification are accurate.
A.2. Review and research Defense Reutilization and  Marketing Service follow-up transactions for materiel  reported as shipped but not received, and respond to the  Defense Reutilization and Marketing Service follow-up  transactions in a timely manner.
B. Establish controls to ensure that Navy organizations  either demilitarize materiel or provide demilitarization  instructions to the Defense Logistics Agency Depots, prior  to requesting the depot ship materiel to disposal, and  respond to depot requests for demilitarization instructions  in a timely manner.
C. Validate that the Realtime Reutilization Asset  Management Program Office reprograms its computer  system to ensure that disposal shipment notifications,  rather than disposal shipment confirmations, are sent to  Defense Reutilization and Marketing Service for disposal  shipments.
D. Request that the Defense Reutilization and Marketing  Service provide management reports which identify Navy  organizations that are not responding to disposal follow-up  transactions for materiel reported as shipped but not  received and that are not sending disposal shipment  notifications for materiel shipped to disposal.
A. Establish controls to ensure that Defense Distribution  Depot personnel request the required demilitarization  instructions for all materiel awaiting disposal instructions  and reverse the disposal transactions if the required  instructions are not received.
B. Establish controls to ensure that the Defense  Reutilization and Marketing Service reviews and analyzes  management data to identify Navy organizations that are  not routinely preparing shipment disposal notifications or  are not routinely responding to follow-up transactions and  identify to the Naval Supply Systems Command potential  problems with data in the in-transit control system in order  for the Naval Supply Systems Command to ensure that  Navy organizations comply with disposal procedures.
The Commanding General,  Marine Corps Logistics  Command should: 1. Identify all excess materiel and return the materiel to the  supply system, as required by Marine Corps Order  P4400.151B, “Intermediate-Level Supply Management  Policy Manual,” July 9, 1992. 2. Perform physical inventories of all materiel in all storage  locations and adjust inventory records accordingly.
The Director, Defense Logistics  Agency should: 1. Reevaluate the cost categories for determining the  average annual cost for maintaining an inactive national  stock number item in the Defense Logistics Agency supply  system and recalculate the average annual cost consistent  with other pricing and cost methodologies. 2. Discontinue application of the draft Defense Logistics  Agency Office of Operations Research and Resource  Analysis report, “Cost of a DLA Maintained Inactive  National Stock Number,” July 2002, to any authorized  programs of DOD or the Defense Logistics Agency until all  applicable cost categories are fully evaluated and the  applicable costs of those relevant categories are  incorporated into the cost study.
A. Identify the circumstances or conditions under which  other nonrecurring requirements are authorized for  processing.
B. Identify the requirements for documenting the  methodology and rationale for using other nonrecurring  requirement transactions.
C. Establish requirements for identifying the supply center  personnel who enter other nonrecurring requirements in  the Defense Logistics Agency supply system and retaining  other nonrecurring requirement records after the support  dates have passed.
Establish a timeline for the Defense supply centers to  validate outstanding other nonrecurring requirement  transactions in the Defense Logistics Agency supply  system. Other nonrecurring requirement transactions that  do not have sufficient supporting documentation or that  cannot be validated should be canceled or reduced and  reported to the Defense Logistics Agency. The report  should include the total number of other nonrecurring  requirement transactions that were deleted and the dollar  value of procurement actions that were canceled as a  result.
The Commander, Ogden Air  Logistics Center should  immediately: 1. Comply with the guidance in Air Force Manual 23-110,  “U.S. Air Force Supply Manual,” and Air Force Materiel  Command Instruction 21-130, “Equipment Maintenance  Materiel Control,” regarding the management of  maintenance materiel stored at the Air Logistics Center.  2. Perform an annual physical inventory of all materiel  recorded in the D035K Wholesale and Retail and Shipping  System that is the responsibility of the Maintenance  Directorate, reconcile the results, and turn in excess  materiel to supply.  3. Perform a physical count of all materiel located on the  maintenance shop floors and in storage areas to identify  unaccountable and excess materiel, reconcile the physical  count to the D035K Wholesale and Retail and Shipping  System, and turn in excess materiel to supply. 4. Complete the review of courtesy storage materiel listed  in the materiel processing system and either turn in the  excess to supply, move to the D035K Wholesale and Retail  and Shipping System, or dispose of the materiel.
A. Expedite funding and the deployment of the Commercial  Asset Visibility system to Army commercial repair facilities.  Funding and deployment should be prioritized based  primarily on the dollar value of repairable assets at the  commercial repair facilities.
B. Perform oversight of compliance with DoD 4000.25-2-M,  “Military Standard Transaction Reporting and Accounting  Procedures,” March 28, 2002, to conduct annual location  reconciliations between inventory control point records and  storage depot records.
A. Determine whether the items with inventory records that  were adjusted as a result of the October 2002  reconciliation between the Communications-Electronics  Command and the Defense Depot Tobyhanna  Pennsylvania are obsolete or excess to requirements. That  determination should be made before requesting special  inventories or performing other costly causative research  procedures.
B. Dispose of those assets that are identified as obsolete  or excess to projected requirements.
A.  Develop in-house procedures to provide management  information reports to the inventory accuracy officer,  comparable to the management information reports  required in the February 2003 contract awarded to  Resources Consultant Incorporated, to assist in reducing  in-transit inventory.
B. Establish controls to ensure that all in-transit items that  meet the criteria in Naval Supply Systems Command  Publication 723, “Navy Inventory Integrity Procedures,”  April 19, 2000, are reviewed prior to writing them off as an  inventory loss.
The Commander, Warner Robins  Air Logistics Center should  immediately: 1. Comply with Air Force guidance regarding the  management of maintenance materiel stored at the Air  Logistics Center.  2. Issue guidance regarding materiel management reports  for management review.  3. Perform an annual physical inventory of all materiel  recorded in the D035K Wholesale and Retail and Shipping  System that is the responsibility of the Maintenance  Directorate, reconcile the results, and turn in excess  materiel to supply. 4. Perform a physical count of all materiel located on the  maintenance shop floors and in storerooms, reconcile the  physical count to the D035K Wholesale and Retail and  Shipping System, and turn in excess materiel to supply.
Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  5. Update or complete Air Force Materiel Command Form  100 for each line of floating stock and spares inventory.  Submit to the floating stock and spares monitor for  processing those forms in which the authorization level  changes.  6. Perform semi-annual reviews of materiel stored in the  courtesy storage area and turn in excess materiel to  supply. 7. Perform quarterly reviews of bench stock materiel in the  Low Altitude Navigation and Targeting Infrared for Night  shop of the Avionics Division and turn in excess materiel to  supply.
A. Enforce the requirements of Naval Air Systems  Command Instruction 4400.5A to identify excess materiel  that has been inactive for more than 270 days for routine  use materiel and 12 months for long lead-time or low  demand materiel.
B. Require quarterly reporting of excess of materiel at  Naval Air Depots to ensure excess materiel does not  accumulate.
C. Develop policy for point of use inventory.
A. Perform physical inventories of materiel stored in all  storage locations and adjust inventory records accordingly.
B. Perform the required quarterly reviews of materiel  stored in maintenance storerooms to determine whether  valid requirements exist for the materiel.
C. Identify all excess materiel stored in maintenance  storerooms and return the materiel to the supply system.
A. Comply with Navy guidance regarding the storage of  maintenance materiel at the depot, performance of  quarterly reviews of maintenance materiel on hand, and  submission of management reports for review.
B. Develop and implement an effective management  control program.
A. Inventory materiel stored in work center storerooms,  record all of the on-hand materiel on accountable records,  identify the materiel for which a valid need exists, and  return the items with no known requirement to the supply  system.
B. Review jobs at closeout to determine whether a need  exists for leftover materiel. Leftover, unneeded materiel  should be made visible to item managers and disposed of  in a timely manner.
C. Perform the required quarterly reviews of materiel  stored in work center storerooms to determine whether  valid requirements exist for the materiel.
Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  D. Perform physical inventories of materiel stored in all  storage locations and adjust inventory records accordingly.
A. Comply with the Defense Logistics Agency Manual  4140.2 requirement that Defense Logistics Agency item  managers contact the supply center monitor for the  weapon system support program to coordinate the deletion  of the code that identifies the national stock number item  as a weapon system item.
B. Comply with the Defense Logistics Agency Manual  4140.3 requirement that the supply center monitor for the  weapon system support program notify the Military  Departments when a national stock number item  supporting a weapon system is to be deleted from the  supply system as a result of the Defense Inactive Item  Program process.
Determine the most efficient and cost-effective method to  reinstate national stock number items that were  inappropriately deleted from the supply system.
A. Review the revised procedures for processing Defense  Inactive Item Program transactions when the FY 2002  process is complete to ensure the procedures are working  as intended and that inactive item review notifications are  being promptly returned to the Defense Logistics Agency.
B. Establish controls to ensure that inactive item review  notifications are reviewed by the user and are returned to  the Defense Logistics Agency before an automatic retain  notification is provided to the Defense Logistics Agency.
C. Establish controls to review Defense Logistics Agency  transactions deleting national stock numbers from Air  Force systems so that the inappropriate deletion of  required data from the Air Force supply system is  prevented.
A. Describe the factors to be used by the Military  Departments and supply centers to evaluate the validity of  potential candidates for additive investment.
B. Require that additive safety level requirements be based  on consistent and up-to-date supply availability data.
C. Require regular reviews to determine whether additive  safety levels continue to be appropriate. Establish a  frequency for when and how often reviews should be made  and the criteria for making necessary safety level  adjustments and reinvesting funds.
D. Establish a method for maintaining safety level  increases that adheres to the DoD safety level limitation  while recognizing and adjusting to changes in the supply  system.
Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented  Partially concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  E. Establish a time frame for continuous program  evaluation and a resolution process that includes a flag or  general officer from each Military Department whenever  problem elevation is needed.
Approve and coordinate with the Military Departments the  revised implementation plan.
A. Revise Defense Logistics Agency Manual 4140.2,  “Supply Operations Manual,” July 1, 1999, to include  terminal national stock number items with registered users  in the Defense Inactive Item Program.
B. Maintain and report statistics on how many terminal  national stock number items are deleted from the supply  system after the North Atlantic Treaty Organization and  foreign governments review the items.
Establish controls to ensure that the Navy is removed as a  registered user of Defense Logistics Agency-managed  national stock number items that are no longer required.
A. Discontinue the use of the market basket approach to  determine which bench-stock items are placed on the  industrial prime vendor contract. Instead, evaluate each  item separately and select the most economical source to  supply material.
B. Review inventory levels and discontinue placing items  on the industrial prime vendor contract with more than 3  years of inventory.
C. Take appropriate action in accordance with contract  terms to remove items with more than 3 years of inventory  and start using existing depot inventories as the first choice  to fill contract demand.
Convene a performance improvement team composed of  representatives from all relevant stakeholders, including  appropriate oversight agencies, to plan and execute a  reengineered best value approach to manage bench-stock  material for all customers that addresses competition and  restriction on contract bundling.
B. The Commander, Defense  Supply Center Philadelphia  should: 1. Implement procedures to ensure that future spot buy  material procurements are priced and paid for in  accordance with the terms of the contract.  2. Obtain a full refund from the Science Application  International Corporation for erroneous charges, including  lost interest, and take appropriate steps to reimburse the  air logistics centers for the full amount of the contract  overcharges.
Direct the Corpus Christi Army Depot to comply with Army  guidance regarding the storage of maintenance materiel at  the depot and the preparation and submission of  management reports for review.
A. Price the materiel stored in the Automated Storage and  Retrieval System that has no extended dollar value or that  has been added to the physical inventory, and identify the  value of inventory excess to prevailing requirements.
B. Inventory materiel stored in work centers on the  maintenance shop floors, record the materiel on  accountable records, identify the materiel for which a valid  need exists, and turn in or transfer to other programs  excess materiel.
C. Perform an annual physical inventory of all of the  materiel stored in the Automated Storage and Retrieval  System.
D. Perform the required quarterly reviews of materiel  stored in the Automated Storage and Retrieval System to  determine if valid requirements exist for the stored  materiel.
E. Review projects at the 50-percent, 75-percent, and 90- percent completion stages to determine if a need exists for  materiel in storage.
F. Perform a reconciliation between the Automated Storage  and Retrieval System and Maintenance Shop Floor  System files, at a minimum monthly, to determine if files  are accurate. A physical inventory should be performed to  correct any deficiencies.
2. (G) The Commander, Corpus  Christi Army Depot should  immediately prepare and submit  the following report to  management for review: 1. A monthly total dollar value for materiel stored in the  Automated Storage and Retrieval System. 2. Items stored in the Automated Storage and Retrieval  System with no demand in the last 180 days. 3. Materiel stored in the Automated Storage and Retrieval  System against closed program control numbers. 4. Materiel stored against overhead program control  numbers. 5. Potential excess materiel by program control number.
A. The Commander, U.S. Forces  Korea should: 1. Establish guidance for delivery of cargo from ports of  debarkation within the theater using Uniform Materiel  Movement and Issue Priority System standards or U.S.  Forces Korea supplemental standards to the Uniform  Materiel Movement and Issue Priority System criteria more  applicable to theater requirements.
Concurred, closed, implemented  Concurred, closed, implemented Concurred, closed, implemented  Concurred, closed, implemented Concurred, closed, implemented  Concurred, closed, implemented Concurred, closed, implemented  Partially concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented Concurred , closed, implemented  Concurred, open  2. Establish procedures for using and maintaining  documentation that provides evidence of delivery times  and the accuracy of the delivered cargo.  3. Prepare or amend commercial carrier contracts that  contain delivery provisions for weekend and holiday  deliveries, and penalties for nonperformance compliance  with the standards established by the provisions of  Recommendation A.1.  4. Establish procedures to ensure that the priority of the  cargo to be delivered from a port of debarkation is  matched with a commercial carrier contract that has the  necessary provisions that will ensure delivery within the  standards established by Recommendation A.1. 5. Establish procedures, metrics, and surveillance plans  that will monitor and ensure carrier performance of  contract specifications and reconcile movement control  documents received from commercial carriers to ensure  consignees received prompt and accurate delivery of all  cargo.
B. The Commander, U.S. Forces  Korea should revise U.S. Forces  Korea Regulation 55-355 to  require: 1. Supply Support Activities to maintain dated and signed  truck manifests and pickup sheets to confirm receipt.  2. Supply Support Activities immediately contact end users  for pickup of high priority cargo within the same day the  cargo is made available for end user.
The Director, Defense Logistics  Agency should: 1. Revise Defense Logistics Agency Manual 4140.2,  “Supply Operations Manual,” July 1, 1999, to include  terminal national stock number items with no registered  users in the Defense Inactive Item Program last user  withdrawn process.  2. Maintain and report statistics on how many terminal  national stock number items are deleted from the supply  system after the North Atlantic Treaty Organization and  foreign governments review the items.
Ensure that the Joint Total Asset Visibility Program is  funded until sufficient operational capabilities of the Global  Combat Support System have been fielded and can  provide capabilities that are at least equivalent to the  existing Joint Total Asset Visibility Program.
The Deputy Under Secretary  of Defense (Logistics and  Materiel Readiness) should: 1. Evaluate the usefulness of the DoD Total Asset Visibility  performance measure.  2. Issue specific, written, performance measure guidance  that standardizes and clarifies the required data elements  for the Total Asset Visibility measure consistent with the  evaluation of the usefulness of the measure.  3. Establish and institutionalize a process to evaluate and  verify data submitted by DoD Components for the Total  Asset Visibility performance measure, consistent with the  evaluation of the usefulness of the measure.
Reassess guidance regarding the 60-day storage and  requisitioning of fabrication materiel at maintenance  depots and revise Army Regulation 750-2. The guidance  should state the following:  the appropriate number of days depots should be allowed  for storing and requisitioning fabrication materiel.  quarterly reviews should be performed to determine if  materiel is still required.
Issue guidance regarding management of the Automated  Storage and Retrieval System at Tobyhanna. The guidance  should include the following:  all materiel stored in the Automated Storage and  Retrieval System shall be, at a minimum, identified by  owning cost center; national stock number/part number;  program control number; quantity; acquisition source  code; nomenclature; and condition code.  a review of any materiel with a date of last activity more  than 6 months shall be performed.  an annual physical inventory of any materiel stored in the  Automated Storage and Retrieval System shall be  performed.  items stored in mission stocks must represent a bona fide  potential requirement for performance of a maintenance  or fabrication requirement.  availability of materiel from previously completed  fabrication orders must be determined before placing  new requisitions.  projects shall be reviewed at the 50 percent, 75 percent,  and 90 percent completion stages to determine if a need  exists for materiel still in storage.  reclaimed materiel, materiel removed from assets in  maintenance, and work in process may be stored until  reutilized on the maintenance program. Excess reclaimed  materiel shall be turned in or transferred to a valid funded  program.  materiel shall not be stored in Automated Storage and  Retrieval System in an overhead account.  quarterly reviews shall be performed on materiel stored in  the Automated Storage and Retrieval System to  determine if requirements still exist.  prior to closing a depot maintenance program, any  associated remaining repair parts, spares, and materiel  on hand shall be transferred to an ongoing program or a  program that will begin within 180 days or turned in to the  installation supply support activity within 15 days. The gaining program must be funded, open, and valid. The transferred materiel must be a bona fide potential  requirement of the gaining program.
A.3. The Commander,  Communications-Electronics  Command should direct  Tobyhanna to immediately: a. Price the materiel stored in the Automated Storage and  Retrieval System that has no extended dollar value or that  has been added to the physical inventory, identify the value  of inventory excess to prevailing requirements, and notify the Inspector General, DoD, of the corrected dollar  value of the inventory and value of inventory excess to the  requirements.  b. Limit the storage of materiel in the Automated Storage  and Retrieval System under overhead accounts.  Specifically, remove materiel obtained from the  Sacramento Air Logistic Center from the overhead account  program control numbers.  c. Record the Tactical Army Combat Computer System  equipment on accountable records and inventory and turn  in the computer equipment to the supply system because  no requirement for the equipment exists at Tobyhanna.
Issue guidance regarding reports that should be submitted  to management for review. The guidance should require  the following reports:  an annual physical inventory of all materiel stored in  Automated Storage and Retrieval System.  a reconciliation between the Automated Storage and  Retrieval System and Maintenance Shop Floor System  files, at a minimum monthly, to determine if files are  accurate.  a physical inventory should be performed to correct any  deficiencies. Reports should be prepared for  management review.  a monthly total dollar value for materiel stored in the  Automated Storage and Retrieval System.  items stored in the Automated Storage and Retrieval  System with no demand in the last 180 days.  materiel stored in the Automated Storage and Retrieval  System against closed program control numbers.   materiel stored against overhead program control  numbers.  potential excess materiel by program control number.
Direct the Tobyhanna Army Depot to immediately perform  a physical inventory and reconcile the Automated Storage  and Retrieval System records with the Maintenance Shop  Floor System records to verify the accuracy of inventory  records and submit report for review.
section_title: Supply Chain Management: Summary of Army Audit Agency Report Recommendations
paragraphs: A-1. Include placement of stocks (malpositioned) as part of the  Army Pre-positioned Stocks program performance metrics. As a  minimum:  clearly define malpositioned stocks and establish procedures for  calculating the data to minimize inconsistency or data  misrepresentation reported by the subordinate activities.  establish long-term goals for correcting the problems and  annually monitor the progress in meeting the goals to ensure the  situation doesn’t deteriorate.  examine the feasibility of correcting the Web Logistics Integrated  Database limitations and shortfalls identified within this report so  the system can be used to produce reliable performance data.
A-2. Improve shelf-life management controls and oversight. As a  minimum:  develop stock rotation plans for items in long-term storage  outside Continental U.S. or remove the items from outside  Continental U.S. storage.  prepare an annual list of all Army Pre-positioned Stocks items  due to expire within 12 and 24 months and have U.S. Army Field  Support Command ensure stock rotation plans are adequate to  minimize expired assets. Use the data to formulate funding  requirements for test and inspection.  use critical data fields within information management systems to  assist in shelf-life stock rotations. Require U.S. Army Field  Support Command to monitor shelf-life data—such as dates of  manufacture and expiration dates—provided by its Army Pre- positioned Stocks sites to ensure it is current and complete.  Perform quarterly reconciliations.  include shelf-life management metrics as part of the Army Pre- positioned Stocks program performance assessment. Establish  goals and develop methods to track and minimize the loss of  items due to the expired shelf-life.
Concurred, open A-3. Strengthen accountability controls and enhance data integrity,  reliability, and visibility of pre-positioned stocks. Specifically:  require U.S. Army Communications-Electronics Life Cycle  Management Command and U.S. Army Tank-automotive and  Armaments Life Cycle Management Command to incorporate  controls similar to U.S. Army Aviation and Missile Life Cycle  Management Command that will identify and track unauthorized  transactions—that is, situations where the ownership purpose  code of an item was changed from a war reserve purpose code  to a general issue code without first receiving approval from Army  Pre-positioned Stocks personnel.   execute the required steps to place data associated with loan  transactions onto the Army knowledge online account to facilitate  oversight of loan transactions.  numerically sequence each approved request and use the  number to cross-reference back to the approved request.  include all Open Army Pre-positioned Stocks loan transactions  issued to item managers that weren’t paid back as part of the  Army Pre-positioned Stocks program performance assessment.  require U.S. Army Communications-Electronics Life Cycle  Management Command and U.S. Army Tank-automotive and  Armaments Life Cycle Management Command to track the  paybacks by establishing a scheduled payback target date so  they can be proactive in pursuing collections.  track inventory loss adjustment statistics as a potential source for  benchmarking progress on reducing repetitive errors and  identifying performance problems.  establish dollar values for supply class VII inventory adjustments  in Logistics Modernization Program so loss adjustments meeting  the causative research criteria are researched.  randomly sample 25 percent of the inventory loss adjustment  transactions to verify the adjustments are supported by evidence  of documented causative research and an adequate explanation  is documented.
A-4. Track Army Pre-positioned Stocks site weekly data  reconciliations to evaluate performance and data reliability.
For the Commander, 10th Mountain Division (Light  Infantry)
A-1. Provide unit commanders with a block of instructions that  explain the process and importance of accurately accounting for  assets and maintaining the property book.
A-2. Establish a reminder system to notify gaining and losing units  when equipment transfers occur.
A-3. Develop and distribute guidance to operations personnel  stressing the need to follow established procedures for accounting  for assets and the importance of providing necessary  documentation to property book officers.
Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented A-4. Research each discrepancy with equipment transfers and  turn-in documents and make appropriate adjustments to the  property book records for the 1st and 2nd BCTs. If the missing  vehicles can’t be located in a reasonable time period, initiate an  AR 15-6 investigation and, if warranted, take further appropriate  action.
B-1. Research the discrepancies we found with the 1st, 2nd, and  3rd BCT vehicles and make appropriate adjustments to the  respective property books.
For the Commander, U.S.  Army Aviation and Missile  Life Cycle Management  Command 1. Require:  item managers to consider historical procurement data in the  Master Data Record’s Sector 10 when justifying values they enter  for the Requirements System to use as representative estimates  of procurement lead time.  integrated Materiel Management Center second-level  supervisors to review and explicitly approve the procurement  lead time values entered into the Master Data Record by item  managers. 2. Require contract specialists to adhere to Army and Aviation and  Missile Life Cycle Management Command guidance on  considering the extent of delay in awarding procurements to  vendors when justifying if a procurement should be identified as a  representative estimate of a future procurement’s administrative  lead time.
A-1. Initiate DA staff action to withhold funding for increasing safety  levels until Army Materiel Command develops test procedures and  identifies key performance indicators to measure and assess the  cost-effectiveness and impact on operational readiness.
For the Commander,  Defense Supply Center  Philadelphia 1. Monitor the contractor’s progress to ensure the contractor  completes the reorganization of the bulk storage warehouses with  a location grid plan and subsequent warehousing of operational  rations with specific location areas in the warehouses. Then  ensure contractor records updated locations of these rations in the  warehouse management system database to ensure physical  location of products match the database. 2. Complete and implement the software change package to  ensure operational rations containing more than one national stock  number are allocated from inventory based on the first-to-expire  inventory method.
Concurred, closed, implemented Concurred, closed, implemented 3. Develop and implement guidance for the contractor regarding  the requirements for the destruction of government-owned  operational rations which have been deemed unfit for human  consumption. Require the contracting officer representative to  certify the destruction certification package only when adequate  documentation is attached to support the operational rations being  destroyed. Also, require the contracting officer representative to  ensure products are destroyed in a reasonable time frame after the  Army Veterinarians recommend destruction of the products. If  Implemented, this recommendation should result in monetary  savings to the government. 4. Before shipping excess to theater, review the worldwide excess  stock of operational rations and identify the expiration dates on  products that may be considered for shipping to replenish  operational ration stock in theater. Before shipping stock,  coordinate with the Theater Food Advisor to ensure the products  can be incorporated into the existing stock on hand and be  effectively managed. Also, don’t consider for shipment any  products with less than 4-months’ remaining shelf life unless the  Army Veterinarians have inspected and extended the shelf life of  the products. In such cases, ensure the documentation  accompanies the shipments. 5. Implement a Quality Assurance Surveillance Plan that  encompasses all requirements of the prime vendor contract.  Require the Administrative Contracting Officer and the contracting  officer representative located at the prime vendor’s location in  Kuwait to monitor and document the contractor’s performance  using the Quality Assurance Surveillance Plan on a scheduled  basis. Upon completion of each review, the Contracting Officer  should review the results of the Quality Assurance Surveillance  Plan and determine if any actions are required to correct the areas  of concern.
For the Commander,  Defense Supply Center  Philadelphia and for the  Commander, Coalition  Forces Land Component  Command 6. Require the Theater Food Advisor and Defense Supply Center  Philadelphia to review the quantities of operational rations that are  currently excess in the prime vendor’s warehouses and ensure  none of these products have orders placed until the excess  quantities are projected to be depleted. If implemented, this  recommendation will result in funds put to better use.
For the Commander,  Coalition Forces Land  Component Command 7. Require the Theater Food Advisor to periodically review the  inventory of government-owned operational rations and ensure  appropriate action is taken when products reach their expiration  date but remain in the prime vendor’s inventory. If implemented,  this recommendation should result in monetary savings to the  government.
A-1. Ensure that the Defense Contract Audit Agency remains  actively involved in monitoring the contractor’s costs.
For the Assistant Secretary  of the Army (Acquisition,  Logistics and Technology)
B-1. Develop Army guidance for approving contract requirements  for deployment operations to include acquisition approval  thresholds, members of joint acquisition review boards, and  documentation of board actions.
C-1. Establish guidance addressing how to transfer government  property to contractors in the absence of a government property  officer to conduct a joint inventory.
C-2. Issue specific policy on (i) screening the contingency stocks  at Fort Polk for possible use on current and future Logistics Civil  Augmentation Program contracts, and (ii) returning commercial- type assets to the contingency stocks at Fort Polk after specific  contract operations/task orders are completed.
C-3. Update Army Materiel Command Pamphlet 700-30 to include specific procedures on:  screening the contingency stocks at Fort Polk for possible use on current and future Logistics Civil Augmentation Program  contracts.  returning commercial-type assets to the contingency stocks at  Fort Polk after contracts are completed.  disposing of obsolete or unusable property.
D-1. Include in an annex to AR 715-9 (Contractors Accompanying  the Force) the key management controls related to Logistics Civil  Augmentation Program, or specify another method for determining whether the management controls related to the program are in  place and operating.
For the Deputy Chief of  Staff, G-4 1. Authorized Stockage Lists (Inventory On-Hand): Army should  issue a change to policy and update AR 710-2 to require forward  distribution points in a deployed environment to hold review boards for authorized stockage lists when they deploy and no less often  than quarterly thereafter. Require review boards to accept  recommendations from dollar cost banding analyses or justify why not. Improvements needed to better meet supply parts demand.
A-1. Develop policy and procedures for the program executive  office community to follow to identify, declare, and return excess  components to the Army supply system.
A-2. Develop and issue guidance that states ownership of Army  Working Capital Fund (AWCF) components that subordinate  management offices possess and control through modification,  conversion, and upgrade programs resides with the Army supply  system.
Concurred, closed, implemented Nonconcurred, closed, not implemented Nonconcurred, closed, not implemented Partially concurred, closed, not implemented Concurred, closed, implemented Concurred, open A-3. Make sure policy is clear on the responsibilities of program  executive offices and their subordinate management offices in  complying with established Army policy and procedures for asset  accountability. Specifically, record and account for all Army assets  in a standard Army system that interfaces with the Army system of  accountability. As a minimum, make sure item managers:  have all transactions and information on acquisition, storage, and  disposition of their assets.  are notified of any direct shipments so that the item managers  can record the direct shipments to capture demand history for  requirements determination.
A-1. Construct permanent or semipermanent facilities in Kuwait  and Iraq in locations where a continued presence is expected and  that have a large number of containers being used for storage,  force protection, and other requirements. For those locations  where construction of permanent or semipermanent facilities isn’t  feasible, use government-owned containers to meet storage, force  protection, and other requirements.
A-2. Align the Theater Container Management Agency at the  appropriate command level to give it the authority to direct and  coordinate container management efforts throughout the Central  Command area of responsibility.
A-3. Direct the Theater Container Management Agency to develop  and maintain a single theater container management database.  Issue guidance that requires all activities in the area of  responsibility to use this database for their container management.
A-4. Coordinate with Military Surface Deployment and Distribution  Command to purchase commercial shipping containers in the  Central Command area of responsibility that are currently accruing  detention. In addition, discontinue use of the Universal Service  Contract and only use government-owned containers or containers  obtained under long-term leases for future shipment of equipment  and supplies into the Central Command area of responsibility.  Ensure any long-term lease agreements entered into include  provisions to purchase the containers.
A-5. Coordinate with Military Surface Deployment and Distribution  Command to either get possession of the 917 government-owned  containers still in the carriers’ possession, obtain reimbursement  from the carriers for the $2.1 million purchase price of the  containers, or negotiate with the carriers to reduce future detention  bills by $2.1 million.
A-6. Coordinate with Military Surface Deployment and Distribution  Command to reopen the 6-month review period under the post- payment audit clause to negotiate with commercial carriers to  either obtain reimbursement of $11.2 million for detention  overcharges on the 29 February 2004 detention list, or negotiate  with the carriers to reduce future detention bills by $11.2 million.
A-7. Perform either a 100-percent review of future detention bills or  use statistical sampling techniques to review carrier bills prior to  payment.
B-1. Include the minimum data requirements identified in the July  2004 DOD memorandum that established policy for the use of  radio frequency identification technology in the statements of work  for task order 58 and all other applicable task orders.
For the Deputy Chief of  Staff, G-4 1. Clarify accountability requirements for rapid fielding initiative  (RFI) property distributed through program executive officer (PEO)  Soldier; specifically, accountability requirements for organizational  clothing and individual equipment (OCIE) items when not issued  by a central issued facility (CIF).
For the Program Executive  Officer, Soldier and For the  Executive Director, U.S.  Army Research,  Development and  Engineering Command  Acquisition Center 2. Instruct the appropriate personnel at the rapid fielding initiative  warehouse to complete and document causative research within  30 days of inventory. Have the causative research:  identify documents used in the causative research process and  the procedures followed to resolve the error in the results of the  causative research.  identify the circumstances causing the variance.  make changes to operating procedures to prevent errors from  recurring.  include government approval signatures before processing  inventory adjustments and a system for tracking inventory  adjustments so managers can cross-reference adjustments and  identify those representing reversals.   3. Assign a quality assurance representative to the rapid fielding  initiative warehouse that can provide the appropriate contract  oversight and prompt feedback to the contractor on accountability  and performance issues. Direct the individual to coordinate with  the contracting officer to ensure the contracting officer  incorporates instructions for evaluating contract requirements into  key documents, such as a surveillance plan and an appointment  letter. 4. Coordinate with the contracting officer to instruct the contractor  to include the results of performance metrics related to inventory  adjustments, location accuracy, inventory accuracy, and inventory  control in the weekly deliverables or other appropriate forum. Have  the contractor also include a spreadsheet with the overall  accountability metric in the weekly reports for each line item and a  continental United States (CONUS) fielding accountability  spreadsheet after each fielding is completed. The data fields would  include:  overall inventory control accountability would include: Prior week  ending inventory balance + all receipts and returns for the current  week = all shipments from the warehouse + ending inventory on  hand.
Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented 5. Direct the RFI contracting officer technical representative from  program executive officer Soldier to work together with the  contracting officer to develop a surveillance plan and provide the  plan to the contract monitor. Include in the plan provisions for spot- checks if developers rely on the contractor’s quality control plan.
A-1. Coordinate with the Deputy Chief of Staff, G-3 to develop  guidance that instructs deploying units on protecting automation  equipment from voltage differences and extreme environmental  temperature conditions.
A-2. Direct all units in the Kuwaiti area of operations to provide  controlled temperature conditions for automation equipment.
A-3. Instruct all units arriving in the Kuwaiti area of operations on  how to protect automation equipment from voltage differences.
B-1. Declassify the order that identifies which combat service  support automation management office units should contact for  assistance.
A-1. Evaluate lessons learned from Operation Iraqi Freedom. As  appropriate, adjust force structure requirements for military police  and transportation personnel during the Total Army Analysis and  contingency operations planning processes.
A-2. Reduce the number of trucks assigned to the aerial port of  debarkation to better reflect actual daily requirements. Coordinate  with the Air Force at the aerial port of debarkation to obtain  advanced notice of air shipments on a daily basis. Monitor use  periodically to determine if future adjustments are required.
A-3. Reestablish a theater distribution management center and  make it responsible for synchronizing overall movement control  operations for the Iraqi theater of operations. Coordinate with the  Multi-National Force-Iraq to establish a standardized convoy  tracking and reporting procedure.
A-1. Coordinate with depots currently using local databases to  track receipt transactions and develop a standard database that  can be used by all depots to effectively track receipts from arrival  date to posting. Each depot should be required to use this  comprehensive database to track receipts and monitor the  suspense dates to ensure receipts are posted to the Standard  Depot System within the time standards. At a minimum, this  database should include:  start and completion dates for key management controls.  date of arrival.  receipt control number and date assigned.  cross Reference Number assigned by the Standard Depot  System.  suspense dates (when receipt should be posted to record).  date of physical count and reconciliation to receipt  documentation.  if receipt required Report of Discrepancy be sent to shipper and  date report was sent if required.  daily review control (list of receipts that are approaching required  posting date).  date stored.  date posted.  reason for not posting within required time frame.
A-2. Initiate a change to Army Materiel Command Regulation 740- 27 to incorporate steps for identifying misplaced or lost labels in  depot quality control checks, command assessments, and other  tools used to measure depot performance.
A-3. Fully use performance indicators (Depot Quality Control  Checks, 304 Reports, and command assessments) as  management tools to ensure necessary management controls are  in place and operating for all depots’ receipt process. Also, ensure  depots have effective training programs that consist of both on-the- job training and formal training to ensure depot personnel are  aware of key controls and their responsibilities. Provide training on  weaknesses and negative trends identified during biannual  command assessments.
A-4. Assign receipt control numbers based on the date the receipt  arrived, and accountability transfers from transporter to depot.
A-5. Submit Reports of Discrepancy to shipper for all  discrepancies between physical counts and receipt documents,  including when no receipt documents are received.
A-6. Post receipts to records in temporary location, when it meets  the requirement for a reportable storage location, to ensure receipt  transactions are posted so that munitions can be made visible for  redistribution in a timely manner.
For the Commander, U.S.  Army Communications- Electronics Command 1. Reemphasize to item managers to use supply document  transactions, as specified in AR 725-50, to generate due-ins in  command’s wholesale asset visibility system when directing the  movement of military equipment items to a conversion contractor. 2. Direct item managers to use a GM fund code in disposition  instructions to troop turn-in units and materiel release orders to  storage activities directing shipments of equipment items to  conversion contractors or to an Army depot maintenance facility. 3. Request the Logistics Support Activity to assign Routing  Identifier Codes and related DOD Activity Address Codes for all  conversion contractor operating locations where the contractor  maintains quantities of items in the conversion process, but doesn’t  presently have the codes. For future conversion contracts develop  a process to ensure that all required codes are assigned  immediately following contract award. 4. Reemphasize to item managers to:  monitor asset visibility system management reports for creation  of due-ins.  require immediate corrective actions when due-ins aren’t created  in the asset visibility system. 5. Reemphasize to item managers the requirement to perform  follow up on due-ins when receipts aren’t posted in command’s  asset visibility system within time periods stated in AR 725-50. 6. Incorporate into the current and all future conversion contracts,  in coordination with the appropriate Project/Program Managers,  the requirement for conversion contractors to transmit supply  document transactions to the asset visibility system at  Communications-Electronics Command in order to report:  receipts of assets upon arrival at the contractor’s plant.  changes in item configurations during the conversion process.  shipments to gaining activities following conversion operations. 7. Until the conversion contracts are modified as detailed in  Recommendation 6, require operating personnel to obtain all  necessary supply documents and manually enter all necessary  transactions into command’s asset visibility system to report  receipts at contractor locations from turn-in units and storage  activities, changes in equipment item configurations, and  shipments of converted items to gaining activities. 8. Take appropriate actions to ensure unused component parts  returned from conversion programs are not improperly reported in  command’s asset visibility system as complete military equipment  systems. Specifically, for National Stock Number 5840-01-009- 4939:  request an inventory at the depot storage activity to identify all  component parts improperly returned as complete systems.  use the inventory results to adjust on-hand quantities in  command’s asset visibility system to ensure accurate balances.
Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented 9. Direct the Tobyhanna Army Depot maintenance facility to take  all actions necessary to ensure appropriate supply document  transactions are processed when equipment items are received,  converted, and transferred back to storage ready for issue. 10. Direct operating personnel to evaluate all Communications- Electronics Command equipment items undergoing disassembly,  conversion, modification, or overhaul programs to determine if the  same processes used for the items discussed in this report are  applicable to them. If so, require operating personnel to apply the  recommendations in this report to those affected items.
For the Commander, U.S.  Army Materiel Command 1. Establish Army guidance requiring integrated materiel  managers to perform annual reviews of holding project assets and  follow up on redistribution actions. 2. Direct commodity commands to redistribute holding project  assets to other pre-positioned stock projects or to general issue. 3. Direct commodity commands to dispose of excess,  unserviceable, and obsolete assets in holding projects. Direct  materiel managers to review the 38 bulky items in holding projects  to identify excess assets and dispose of them. 4. Establish guidance on the use of holding projects that requires  managers to either provide a documented rationale for retaining  excess assets in holding projects or dispose of them. Include in the  guidance the requirement that inventory management  commanders or their designees review the retention rationales for  approval or disapproval. 5. Establish guidance that requires materiel managers to review  holding projects annually to identify unserviceable (condemned,  economically unrepairable, and scrap) and obsolete assets in  holding projects. Include in the guidance the requirement that the  identified assets be disposed of within 12 months.
For the Joint Munitions  Command 1. Use the integration plan to manage the integration of automatic  identification technology in receiving and shipping processes, as  well as the seal site program. At a minimum, the plan should be  periodically reviewed to make sure:  adequate workforces are dedicated for integration tasks in the  future.  equipment and software are thoroughly tested and determined to  be functional before being fielding to ammunition storage  activities.
Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented 2. Require contractor to use Standard Depot System’s composition  rules and traditional edit checks in software development for the  remaining applications to automatic identification technology. The  development should include the:  use of established performance measures to ensure that all the  contractor’s products and services meet Joint Munitions  Command’s automatic identification technology needs, such as  appropriate edit checks before fielding.  development of specific tasks with timelines to ensure that  established implementation goals are met in the most effective  and efficient manner. This should include penalties to ensure  timely delivery of necessary equipment and software applications  from contractors.
A-1. Establish procedures that ensure commands and units reduce  training ammunition forecasts when units determine that training  ammunition requirements have changed.
B-1. Make sure ammunition supply point personnel follow  procedures to post all ammunition supply transactions in the  Training Ammunition Management System on the day the  transaction occurs.
B-2. Make sure the ammunition supply point has procedures to  maintain updated plan-o-graphs that show the locations and lot  numbers of the ammunition stored in the ammunition supply point  bunkers and includes the procedures in the supply point’s standing  operating procedures.
B-3. Develop a plan to establish a reliable quality assurance  specialist (ammunition surveillance) capability for the ammunition  supply point and California Army National Guard units. Include in  the plan an evaluation of whether the California Guard should have  an internal quality assurance capability instead of relying on a  memorandum of agreement with Fort Hunter-Liggett.
B-4. Correct the contingency ammunition control problems at  California Guard units by:   identifying all contingency ammunition that is currently on-hand  at all California Guard units and establishing proper  accountability over the ammunition.  preparing a serious incident report if the amount of ammunition  unaccounted for that is identified at the units meets the criteria in  AR 190-40.  ensuring that units and the ammunition supply point follow  established procedures for maintaining all issue and turn-in  documentation for security ammunition to support the quantities  recorded on the units’ hand receipt.
Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented B-5. Follow procedures for reviewing and updating security and  contingency ammunition requirements. At a minimum:  determine ammunition requirements based on threat  assessments, potential missions and force structure available to  provide a response.  coordinate and establish a current ammunition distribution plan.  conduct an annual review of ammunition requirements.  maintain a list of where ammunition is being stored for State  contingency by type and quantity.
B-6. Make sure units follow the requirement to provide all small  arms supply transactions to the U.S. Property and Fiscal Office  within 5 working days so that the DA central registry can be  updated within 10 working days.
B-7. Make sure units follow the checklist in AR 190-11 related to  physical security over the storage of small arms and document the results of their inspections.
For the Commander, Eighth  U.S. Army 1. Take appropriate action to perform and document required  Operational Project reviews. Specifically:  establish and prescribe guidelines and criteria that will inject  more discipline into the Operational Project review and validation process. Prescribe key factors, best practices, and methods for  determining and documenting Operational Project requirements.  have each project proponent perform an analysis each year in  accordance with the annual review process in Army Regulation  710-1 and whenever the Operational Plan changes. The project  proponent should include an updated letter of justification that  references where each project’s list of requirements originated  and how the quantities for each item were computed.  after receiving the official response from the project proponent,  Eighth Army, G-4, War Reserve, should submit a memorandum  to Headquarters, DA, G-4 for the purpose of documenting the  annual review. 2. Have the War Reserve Branch track completion of annual  reviews and 5-year revalidations; periodically review  documentation of reviews and revalidations to evaluate their  sufficiency.
For the Deputy Chief of  Staff, G-3 1. Develop and apply detailed criteria to assess the adequacy of  operational project packages and the validity of related  requirements, and approve only those projects that meet the  criteria. 2. Establish criteria and guidelines that require proponent  commands to identify and prioritize mission essential equipment in operational projects. Establish a policy to fund the higher priority  items first.
For the Deputy Chief of  Staff, G-3 and For the  Deputy Chief of Staff, G-4 3. Establish and prescribe guidelines and criteria that will inject  more discipline into the operational project requirements  determination process. Prescribe key factors, best practices, and  methods for determining and documenting operational project  requirements.
For the Deputy Chief of  Staff, G-4 4. Designate only commands with clear or vested interest in  projects as the proponents. 5. Provide guidance to project proponents that outline strategies  and methodologies for reviewing and revalidating operational  projects. 6. Track completion of reviews and 5-year revalidations,  periodically review documentation of reviews and revalidations to  evaluate its sufficiency, and reestablish the enforcement policy that  would allow cancellation of operational projects when proponents  don’t perform timely, adequate reviews or revalidations. Consider  having a formal Memorandum of Agreement with Army Materiel  Command to track operational project reviews and revalidations. 7. Revise guidance requiring annual reviews for all operational  projects to consider the individual characteristics of projects when  scheduling the frequency of reviews.
For the U.S. Army Aviation  and Missle Command 1. Instruct the responsible item managers to:  initiate actions to dispose of quantities that exceed documented  requirements for the seven items identified.  determine if it’s economical to reduce the planned procurement  quantities excess to requirements for the five items identified. For  those that are economically feasible, take action to reduce  planned procurement quantities.
If these actions are implemented, we estimate they will result in  potential monetary savings of about $1.7 million.
For the Commanding  General, Combined Joint  Task Force 180 1. Build semi-permanent storage facilities for class I supplies at  Bagram and Kandahar, including facilities for dry and frozen goods  storage. 2. Direct base operations commanders to record all containers  purchased with Operation Enduring Freedom funds in the  installation property books. In addition:  conduct a 100-percent physical inventory of shipping containers  at each installation.  record all leased and purchased containers in the property book.
Make sure the serial numbers of the shipping containers are  recorded, too.  establish procedures with the contracting office to ensure that the  installation property book officer is given documentation when  containers are purchased or leased.
For the Commander,  Combined Joint Task Force  180  1. Increase the size of the supply support activity in Bagram to  1,700 line items of authorized stockage list to ensure the  availability of critical aviation spare parts. 2. Require the supply support activity officer to hold inventory  reviews every 30 days or less with aviation maintenance units to  ensure adequate inventory levels of items on the authorized  stockage list. 3. Place Army expeditors—“the go-to guys”—familiar with class IX aviation spare parts at choke points located in Germany in the  Army and Air Force delivery system to prioritize pallets and  shipments.
For the Deputy Chief of  Staff, G-4 1. Establish theater DOD activity address codes for units to fall in  on when assigned to Operation Enduring Freedom.
For the Deputy Chief of  Staff, G-4 1. Issue guidance directing activities to attach radio frequency tags to shipments en route to the Operation Enduring Freedom area of  responsibility. Enforce requirements to tag shipments by directing  transportation activities not to allow the movement of cargo without a radio frequency tag attached. 2. Direct Military Traffic Management Command to obtain radio  frequency tag numbers from activities shipping goods and to report those tag numbers to transportation officers by including them in  the in-transit visibility (ITV) Stans report. 3. Issue additional guidance to activities clarifying procedures they should follow for the retrograde of radio frequency tags and to  replenish their supply of tags.
For the Joint Logistics  Command 1. Make sure movement control teams tag shipments as required  by US Central Command guidance to ensure that improvements  continue during future rotations.
A-1. Direct responsible activities to:  validate current requirements for subproject PCA (authorizing  chemical defense equipment for 53,000 troops) to augment U.S.  Army Europe’s second set deficiencies and submit the  requirements to DA for approval in accordance with AR 710-1.  revalidate requirements for chemical defense equipment for  project PCS (see PCA), including the addition of equipment  decontamination kits. Revise requirements for chemical defense  equipment for the Kosovo Force mission and submit the changes to DA.
A-2. Ask Army Materiel Command to fully fill revised requirements for chemical defense equipment for operational project PCS and to redistribute or dispose of excess items from operational projects  PCA and PBC.
Concurred, closed, implemented Concurred, closed, implemented Nonconcurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, not implemented Concurred, closed, not implemented B-1. Direct responsible activities to review and validate all project  requirements for collective support systems as required by AR  710-1.
C-1. Direct responsible activities to:  ask DA to cancel subprojects PZP and PZQ (project codes to  provide equipment for reception of reinforcing forces deploying to  Europe and other theaters).  develop requirements and request a new receiving, staging,  onward movement and integration operational project, if needed,  in accordance with AR 710-1.
D-1. Ask DA to cancel operational subproject PYN (project code)  for aircraft matting.
D-2. Submit new operational project requirements for aircraft  matting to DA in accordance with AR 710-1.
A-1. Develop a system of metrics, to include performance goals,  objectives, and measures, for evaluating the reliability of data in  the capability. Establish processes for comparing actual  performance to the metrics and taking remedial action when  performance goals and objectives aren’t met. (Recommendation  B-3 calls for a process to compare data in the capability and feeder  systems. The results of these comparisons would constitute the  actual data reliability performance.)
A-2. Develop goals and objectives for use in evaluating the  success of redistribution actions for Army assets. Develop  procedures for identifying and correcting the causes for referral  denials that exceed the established goals.
B-1. Issue guidance to project and product managers detailing the  proper use of bypass codes on procurement actions.
B-2. Include definitive guidance on the use of bypass codes into  appropriate guidance documents on The Army’s business  processes, such as AR 710-1. Make sure the guidance explains  the ramifications of using the different codes.
B-3. Direct the Logistics Support Activity to perform periodic  reviews of data in the capability to ensure that it agrees with data in  feeder systems, and take action to identify and correct the causes  for any differences.
B-4. Require commodity commands to use the Post-award  Management Reporting System to help manage contract receipts.  Also, make sure the Logistics Modernization Program has the  capability to manage invalid due-in records.
B-5. Direct commodity commands to delete all procurement due-in  records with delivery dates greater than 2 years old. Have the  commodity commands research and resolve due-in records with  delivery dates more than 90 days old but less than 2 years old.
B-6. Direct commodity commands to review and remove invalid  due-in records for field returns with delivery dates over 180 days.
Concurred, closed, not implemented Concurred, closed, not implemented Concurred, closed, not implemented Concurred, closed, not implemented Nonconcurred, closed, not implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, open B-7. Require commodity commands to periodically scan the  Commodity System for procurement actions issued with bypass  codes. Ask project and program managers to explain the decision  to use a bypass code. Report the results of the review to the  Assistant Secretary of the Army (Acquisition, Logistics and  Technology). If the Logistics Modernization Program continues to  employ bypass codes or other methods that prevent the creation of  a due-in record, conduct similar reviews when the Logistics  Modernization Program is implemented.
C-1. Incorporate instructions on the use of the capability into  appropriate guidance documents on The Army’s logistics business  processes, such as AR 710-1. These instructions should address  topics such as reviewing the capability for excess items before  procuring additional stocks.
C-2. Direct the Logistics Support Activity to review data in the  Army Total Asset visibility capability for potentially erroneous data.  Establish a procedure for reporting the potentially erroneous data  to the activities responsible for the data and performing research to  determine the validity of the data.
D-1. Revise AR 710-2 and 710-3 to comply with the requirements  of AR 11-2. Specifically:  develop management control evaluation checklists addressing  the accuracy and reliability of data in the Army Total Asset  visibility capability and publish these controls in the governing  Army regulations, or  identify other evaluation methods and include these in the  applicable Army regulations.
For the Commander, U.S.  Army Materiel Command 1. Emphasize to the commodity commands the need to  periodically review the process for creating asset status  transactions in the Commodity Command Standard System to  ensure the transactions are properly created and forwarded to the  Logistics Support Activity. 2. Revise Automated Data Systems Manual 18-LOA-KCN-ZZZ-UM  to require activities to promptly submit monthly asset status  transactions to the Logistics Support Activity.
For the Commander, U.S.  Army Materiel Command  Logistics Support Activity 3. Establish procedures for notifying source activities when the  capability rejects asset status transactions. Make sure that  rejected and deleted transactions are reviewed to identify reasons  for the transactions being rejected or deleted. If appropriate,  correct the rejected transactions and resubmit them for processing  to the capability. Based on the results of the reviews, take  appropriate action to correct systemic problems. 4. Establish a control log to monitor participation of Army activities  in the monthly asset status transaction process. Use the log to  identify activities that didn’t submit a monthly update and  determine why an update wasn’t submitted. Report frequent  abusers of the process through appropriate command channels. 5. Report to the Deputy Chief of Staff, G-4 that AR 710-3 needs to  be revised to require activities to promptly submit monthly asset  status transactions to the Logistics Support Activity. 6. Document the process used to update information in the asset  visibility module of the Logistics Integrated Data Base.
A-1. Obtain a document number from the installation property book office before ordering installation property or organizational  clothing and individual equipment. Order only equipment and  vehicles for valid requirements approved by the Joint Acquisition  Review Board.
A-2. Include written justification, analyses and study results in  documentation for purchase requests and commitments before  acquisition decisions are made.
A-3. Determine the number of vehicles required for the mission.  Consider adjusting dollar thresholds for approval by the Joint  Acquisition Review Board.
A-4. Establish written policy to secure explosives using the interim  plan. Build a permanent secure area for explosives awaiting  movement as soon as possible.
A-1. When updating the variable cost-to-procure factor, make sure  the following steps are completed until a system like activit-based  costing is available to capture costs:  develop cost data for each functional area using groups of well- trained, function experts.  properly document the process used to develop costs.  research and substantiate variances in cost data among buying  activities.
A-2. Make sure updates to the variable cost-to procure factor are  given to each buying activity and properly input into the materiel  management decision file in the Commodity Command Standard  System.
Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, open A-3. Review the variable cost-to-procure elements in the materiel  management decision file and determine which of the three  variable cost-to-procure cost categories should be used to update  each element. Provide this information to the buying activities for  implementation. Do periodic checks to make sure the elements are  updated properly.
A-4. Review the other factors in the materiel management decision  file mentioned in this report for accuracy, especially those that  haven’t been updated in the past 2 years.  Specifically make sure  the buying activities update the following factors using data related  to the commodity they manage:  Variable Cost to Hold (General Storage Cost, Discount Rate,  Storage Loss Rate, and Disposal Value).
Probability of No Demands.  Depot Cost Elements (Stock Issue Cost, Fixed Cost, Receipt  Cost for Stocked Item, and Non-Stocked Cost).
Percent Premium Paid.  Add-Delete Demands.
B-1. Have the Requirements Integrity Group (or a similar working  group) periodically review the factors used in the economic order  quantity/variable safety level model for accuracy—especially those  discussed in this objective. Provide guidance to buying activities  for properly updating factors and make sure updated factors are  processed in the automated system.
For the Assistant Secretary  of the Army (Acquisition,  Logistics and Technology)
1. Issue written policy prescribing the specific roles and  responsibilities, processes, and key management controls for  developing and integrating automatic identification technology into  logistics processes. As a minimum, include requirements for  funding, milestone decisions, in-process reviews, test and  evaluation plans, life-cycle cost estimates, benefit analyses,  coordination with other system developments, and transfer of  finished products. Also, consider subjecting the Army’s  development of automatic identification technology to the  prescribed acquisition procedures of AR 70-1. 2. Prepare a business case analysis for each automatic  identification technology application that the Army has ongoing  and planned. Adjust applications, if appropriate, based on the  results of the business case analyses. 3. Establish a central oversight control within the Army for  automatic identification technology. As a minimum, set up a  process to:  monitor all development and funding within the Army for  automatic identification technology.  verify that similar developments aren’t duplicative.
For the Commander, U.S.  Army Training and Doctrine  Command 4. Update the operational requirements document for automatic  identification technology. As a minimum, determine the Army-wide  need for standoff, in-the-box visibility and document the results in  an updated operational requirements document.
Revise the current version of AR 710-2 to make Dollar-Cost  Banding mandatory. Set a date for implementing Dollar-Cost  Banding that will allow for gradual implementation by major  commands, divisions, and other activities with supply support  activities.
A-1. Issue a message to all major command and subordinate  activities informing them of problems and best practices identified  during our audit. Use the draft advisory message as a guide for  preparing the message (Annex E). Advise major commands and  divisions responsible for maintaining units on alert status for rapid  deployment in response to a crisis to ensure their local policies  (such as major command regulations or division Readiness  Standing Operating Procedures) include the provisions outlined in  the message.
A-2. Modify AR 710-2 to include guidance for major commands  and subordinate activities responsible for maintaining units on alert status for rapid deployment to follow to ensure adequate repair  parts support during the initial period of deployment. As a  minimum, require that divisions with alert units have:  an assumption process in place that includes procedures for  detailed planning of Class IX requirements.  a deployment notification process in place with procedures for  conducting a summary review of Class IX stocks planned for  deployment, considering such factors as the deployment  environment, anticipated operating tempo, or intensity of the  operations.
A-3. Modify DA Pamphlets 710-2-1 and 710-2-2 to include detailed procedures for divisions to follow to ensure alert forces have  adequate Class IX repair parts support. Review the best practices  outlined in this report (and the draft advisory message in Annex E)  as a starting point for revising the pamphlets.
A-4. Update Field Manual 10-15 (Basic Doctrine Manual for Supply and Storage) to reflect current policies and address the key  procedures discussed earlier in this report. Additionally, update the field manual to provide guidance on such issues as:  how to identify Class IX repair part requirements for alert forces.  how to identify repair parts shortages and whether to requisition  shortage items.  what priority designator code to use for requisitioning parts  during the assumption process and when in alert status.  when to use pre-packaged inventories.  when to pre-position parts at airfields (with alert force  equipment).
B-1. Include key management controls for alert forces in an  appendix of AR 710-2 as prescribed by AR 11-2 or incorporate  these controls into the existing Command Supply Discipline  Program. Consider our list of key controls contained in Annex H to  identify controls for inclusion in the regulation.
section_title: Supply Chain Management: Summary of Air Force Audit Agency Report Recommendations
paragraphs: The Director of Logistics  Readiness, Air Force  Deputy Chief of Staff for  Installations, Logistics and  Mission Support should: a. Require Air Force personnel to delete all invalid adjusted stock  levels identified in the audit. b. Establish procedures to improve adjusted stock level  management.  Specifically, revise Air Force Manual 23-110 to:  address the role of the Logistics Support Centers.  Specifically,  require Logistics Support Center personnel only approve base- initiated adjusted stock levels with sufficient justification on the  Air Force Forms 1996, maintain all Air Force Forms 1996, and  initiate the revalidation process.  improve the revalidation process.  Specifically, the guidance  should contain the following controls:  a revalidation checklist detailing procedures logistics  personnel should use to revalidate adjusted stock levels.  ensure personnel accomplish the revalidation every 2 years.  a requirement to use Air Force Form 1996 to establish each  adjusted stock level (including MAJCOM-directed adjusted  stock levels) and include a detailed justification of the adjusted  stock level purpose and duration.
A.1. The Air Force Materiel  Command Director of  Logistics should: a. Direct air logistics center shop personnel to delete the invalid  Credit Due In From Maintenance details identified by audit  (provided separately). b. Establish procedures requiring an effective quarterly Credit  Due In From Maintenance Reconciliation.  Specifically, Air Force  Manual 23-110, US Air Force Supply Manual, and Air Force  Materiel Command Instruction 23-130, Depot Maintenance  Material Control, should require maintenance personnel to  provide written documentation for each Credit Due In From  Maintenance detail (i.e., supported by a “hole” in the end item).  If  such supporting documentation is not provided, require retail  supply personnel to delete the unsupported Credit Due In From  Maintenance details. c. Develop training for air logistics center shop personnel  regarding proper spare part turn-in and Credit Due In From  Maintenance Reconciliation procedures.  Specifically, the training  should define the various ways to turn spare parts in, and the  differences between each method, to include the impact of  improperly turning in spare parts.  In addition, proper Credit Due  In From Maintenance Reconciliation procedures should be  covered in depth to include training on what constitutes  appropriate supporting documentation.
A.2. The Air Force Materiel  Command Director of  Logistics should: a. Establish detailed procedures in Air Force Manual 23-110 on  how an item manager should validate Due Out to Maintenance  additives (i.e., what constitutes a Due Out To Maintenance  additive, where the item manager can validate the additive, which  priority backorders are associated with Due Out To Maintenance,  etc.).
Concurred, open b. Direct Warner Robins Air Logistics Center to rescind local  policy allowing item managers to increase the Due Out To  Maintenance additive quantity to account for install  condemnations. c. Issue a letter to item managers reemphasizing the requirement  to document the methodology used to validate changes to Due  Out to Maintenance additives, and retain adequate support for  the Due Out To Maintenance additive quantity.
A.1. Air Force Materiel  Command Directorate of  Logistics and Sustainment  personnel should update Air  Force Materiel Command  Manual 23-1, Requirements  for Secondary Item, to: a. Include instruction on what information should be developed  and retained to support estimated condemnation rates. The  guidance should include maintaining documentation on key  assumptions, facts, specific details, decision makers’ names and  signatures, and dates of decisions so the condemnation  percentage can be recreated. b. Establish sufficient guidance to instruct equipment specialists  on managing parts replacement forecasting. Specifically, develop a standardized method to plan for  replacement part acquisition while phasing out the old parts.
The Air Force Materiel  Command Director of  Logistics and Sustainment  should: a. Correct the shop flow times for the 211 items with requirements  discrepancies.  b. Revise the process for computing shop flow times to adhere to  DoD 4140.1-R, which requires the removal of awaiting  maintenance and awaiting parts times from requirements  computations.  c. Evaluate the D200A Secondary Item Requirements System  computer program to identify and correct the programming  deficiencies adversely impacting the shop flow times  computation.  d. Complete the ongoing automation effort designed to eliminate  manual processing errors.
A.1. The Air Force Deputy  Chief of Staff, Installations  and Logistics, should: a. Revise Air Force Manual 23-110 to: (1) Provide supply  discrepancy report missing shipment procedures consistent with  Air Force Joint Manual 23-215 guidance.  (2) Establish supply  discrepancy report dollar value criteria consistent with DoD  4500.9-R guidance.   b. Establish base supply personnel training requirements on  supply discrepancy report procedures and communicate those  requirements to the field.
Request Defense Logistics Agency comply with procedures  requiring depot supply personnel inspect packages and submit  supply discrepancy reports when appropriate.
A.1. The Air Force Deputy  Chief of Staff, Installations  and Logistics, should:   a. Revise Air Force Manual 23-110 to (1) describe more  thoroughly documentation requirements for data elements used  to compute readiness spares package item requirements and (2)  require all readiness spares package managers to attend training  that includes an adequate explanation of data element  documentation requirements.
Concurred, open b. Upgrade the Weapons System Management Information  System Requirements Execution Availability Logistics Model to  (1) accept mechanical data element transfers directly from other  source systems and (2) prompt readiness spares package  managers to input documentation notations supporting the  rationale of changes in readiness spares package data elements.
A.1. The Air Force Materiel  Command Directorate of  Logistics and Sustainment  personnel should: a. Reduce the stock level day standard value from 10 days to 4  days in the D200A Secondary Item Requirements System.   b. Develop and implement an automated method in the Advanced  Planning and Scheduling system to measure the actual order and  ship time needed to replenish depot level maintenance  serviceable stock inventories.   c. Develop and implement an interim method to measure or  estimate depot order and ship time until an automated method is  developed.
A.1. The Deputy Chief of  Staff, Installations and  Logistics, Directorate of  Logistics Readiness should  require the Distribution and  Traffic Management Division  to: a. Direct Transportation Management Office personnel to  communicate to the consignors the cost and timing benefits to  move shipments via door-to-door commercial air express carrier  service when eligible based on DoD and Air Force guidance. If  the consignor refuses the cost-effective mode, require a waiver  letter expressing the need to use the Air Mobility Command  carrier.   b. Develop criteria to allow consignors to adequately identify  priority requirements and assign appropriate priority designator  codes when shipping assets via Air Mobility Command airlift.   This criteria should be included in Air Force Instruction 24-201.  c. Instruct Transportation Management Office personnel to  properly review all shipping documentation to ensure all required  information is completed by the consignor prior to accepting  cargo for movement to the Air Mobility Command aerial port.
A.1. The Air Force Materiel  Command Director of  Logistics and Sustainment  should:   a. Establish procedures to properly budget for delayed  discrepancy repair requirements by accounting for the eventual  return and repair of unserviceable items in the  requirements/budget process starting with the March 2005  computation cycle.   b. Develop procedures or include an edit in the new system that  flags additives and prompts the item manager to perform  thorough reviews of additive requirements.  c. Develop a process that requires program managers, item  managers, and other applicable program directorate personnel to  periodically review program and mission direct additive  requirements to verify that duplication has not occurred.
Concurred, closed, implemented Concurred, open d. Inform all item managers and air logistics center managers that  it is an inappropriate use of mission direct additives to retain  excess inventory or preclude contract terminations. Additionally,  reiterate regulatory guidance delineating the approved process  for retaining excess materiel and preventing contract  terminations.
A.1. The Air Force Materiel  Command Director of  Logistics and Sustainment  should:   a. Direct item managers to correct erroneous requirements  identified during this review. b. Revise Air Force Materiel Command Manual 23-1 to clarify  procedures for adjusting low demand item requirements.  Specifically, ensure the guidance clearly states item managers  may restore previously decreased requirements to their original  level.
A.1. The Air Force Materiel  Command Director of  Logistics and Sustainment  should: a. Direct item managers to correct all erroneous requirements  computations and related budgets identified during this review.  b. Revise Air Force Materiel Command Manual 23-1 to correct  guidance conflicts. Specifically, ensure the guidance only  contains the correct standards requirements (3 days for base  processing times and 10 days for reparable intransit times).
A.1. The Air Force Materiel  Command Director of  Logistics should revise Air  Force Materiel Command  Manual 23-1 to: a. Require item managers review and identify excess next higher  assemblies that could be used to satisfy indentured item repair,  as well as buy, requirements. b. Provide specific procedures for item managers to follow to  satisfy the indentured item buy and repair requirements.
Revise training, and then train item managers to use indentures  system data to identify excess next higher assemblies that could  be used to satisfy indentured item requirements.
B.1. The Air Force Material  Command Director of  Logistics should: a. Require equipment specialists correct inaccurate indentures  system data. b. Publish the draft guidance requiring equipment specialists  ensure indentures system data accuracy.   c. Train equipment specialists to maintain indentures system data  accuracy.
The Air Force Materiel  Command Director of  Logistics should: a. Collect the unserviceable parts identified during the audit from  the contractors or adjust the price of those parts (FY 2000-2002,  $238.9 million and estimated FY 2003, $79.6 million). b. Establish a mechanism to track the issue and return of parts  issued to customers who subsequently provide those parts to  contractors as prescribed in Air Force Manual 23-110, Volume I,  Part 3, Chapter 7.   c. Either revise the policy to issue parts to customers who  subsequently provide those parts to contractors at standard price  or develop a due-in-from-maintenance-like control to adjust the  part’s price if the unserviceable parts are not returned.
A.1. The Deputy Chief of  Staff, Installations and  Logistics should: a. Revise Air Force Instruction 21-104 to require engine  managers to input a follow-on tasked unit into the requirements  computation system as a single unit.  b. Modify PRS software to compute spare engine needs based on  the combined flying hours for follow-on tasked units.
A.1. The Air Force Materiel  Command Supply  Management Division  should: a. Implement corrective software changes to the Secondary Item  Requirements System and Central Secondary Item Stratification  Subsystem systems to remove the Other War Reserve Materiel  requirements from the Peacetime Operating Spares requirements  and report Other War Reserve Materiel requirements separately.   b. Implement interim procedures to remove Other War Reserve  Materiel requirements from the Peacetime Operating Spares  requirements and budget and report Other War Reserve Materiel  requirements separately until they implement Recommendation  A.1.a.
A.1. The Air Force Materiel  Command Director of  Logistics should:   a. Direct maintenance management personnel to provide  adequate oversight to ensure maintenance personnel turn in all  aircraft parts to the Weapon System Support Center or courtesy  storage areas.   b. Revise Air Force Materiel Command Instruction 21-130  directing air logistics center Weapon System Support Center  management to establish a supply inventory monitor to oversee  maintenance work areas ensuring excess parts are turned in to  Weapon System Support Center or courtesy storage areas.
Reemphasize the regulatory requirement (Air Force Materiel  Command Instruction 21-130) to the air logistics center  maintenance supervisors to assign a maintenance inventory  control monitor to oversee the maintenance areas and ensure  maintenance personnel tag and label all parts with the applicable  aircraft number and the serviceability condition.
Request that the Air Force Materiel Command Director of  Logistics include Air Force Logistics Management Agency  Stocking Policy 11 in the Readiness Base Leveling system to  calculate C-5 forward supply location spare parts stock levels.
Instruct item manager specialists that Air Force Form 1996 is not  required to maintain Army Materiel Command Forward supply  secondary item requirements in the Secondary Item  Requirements System.
A.1. The Air Force Materiel  Command Director of  Logistics should: a. Remove the D200A Secondary Item Requirements System  automatic asset balance variance adjustment. b. Establish training requirements for air logistics center  personnel on how to research and resolve D200A Secondary  Item Requirements System asset balance variances.
Concurred, closed, implemented Concurred, closed, not implemented Concurred, closed, not implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, not implemented Concurred, closed, implemented Concurred, closed, implemented Concurred, closed, implemented c. Revise the Air Force Materiel Command Manual 23-1 to require  that item managers defer an item’s buy and/or repair requirement  until reconciling any asset balance variance greater than a  specified threshold (variance percent, quantity, and/or dollar  value). d. Establish asset balance variance oversight procedures to verify  item managers resolve asset balance variances.
A.1. The Air National Guard,  Deputy Chief of Staff,  Logistics, should:   a. Address to subordinate units the importance of following Air  Force equipment guidance related to small arms accountability,  inventory, documentation, storage, and disposal, and the  competitive marksmanship program.   b. Request the Air National Guard Inspector General to include  small arms accountability, inventory, documentation, storage, and  disposal requirements as a special emphasis area in unit  inspections.
B.1. The Air National Guard,  Deputy Chief of Staff,  Logistics, should:   a. Direct all Air National Guard units revalidate small arms and  conversion kit requirements using Allowance Standard 538. b. Recompute requirements (including M-16 conversion kits),  reallocate small arms on-hand based on adjusted authorizations,  and adjust requirements and requisitions, as needed, following  the reallocations.
A.1. The Air Force Materiel  Command Director of  Logistics should revise Air  Force Manual 23-110 to  include specific material  management transition  guidance. Specifically, the  guidance should require: a. Transition gaining locations to have a training plan in place to  ensure personnel are adequately trained before working asset  buy and repair requirement computations. b. Air Force Materiel Command personnel to establish a transition  team to monitor all stages of the transition, to include ensuring  personnel are adequately trained and providing additional  oversight over requirement computations worked by new item  managers.
Revise Standard Base Supply System transaction processing  procedures to automatically select special requisition Air Force  routing identifier codes.
Issue guidance to base supply personnel reminding them of  proper receipt transaction procedures.
Discontinue the automated transaction deletion program since  the revised Standard Base Supply System procedures render the  program obsolete.
C.2. The Deputy Chief of  Staff, Installations and  Logistics should: a. Revise Air Force Manual 23-110 to direct working capital fund  managers to input reversing entries that will correct erroneous  transactions identified during monthly M01 list reviews.   b. Direct all base supply working capital fund managers to:  (1)  Review the most current M01 list to evaluate the propriety of all  transactions affecting the Purchases at Cost account.  (2) Input  reversing entries to correct any erroneous transactions identified  during the M01 list review. This will correct all deficiencies,  including those described in Results-A and Results-B.
A.1. The Air Force Reserve  Command, Deputy Chief of  Staff, Logistics, should:  a. Address to subordinate units the importance of following Air  Force equipment guidance related to small arms accountability,  inventory, documentation, storage, and disposal. b. Request the Air Force Reserve Command Inspector General to  include small arms accountability, inventory, documentation,  storage, and disposal requirements as a special emphasis area in  unit inspections.
B.1. Air Force Reserve  Command, Deputy Chief of  Staff, Logistics, should: a. Request all Air Force Reserve Command units revalidate small  arms and conversion kit authorizations using Allowance Standard  538. b. Recompute requirements (including M-16 conversion kits),  reallocate small arms on-hand based on recomputed  authorizations, and adjust requirements and requisitions, as  needed, following the reallocations.
Finalize and issue the revised Air Force Manual 23-110 requiring  personnel to identify and timely return secondary items to the  primary control activity.
Finalize and issue the revised Air Force Manual 23-110 requiring  personnel to research and validate credit due on repairable items  returned to the primary control activity.
section_title: Supply Chain Management: Summary of Naval Audit Service Report Recommendations
paragraphs: The Office of the  Commander, U.S. Fleet  Forces Command should: 1.  Emphasize Chief of Naval Operations requirements that all ships  maintain proper inventory levels based on authorized allowances and  demand history.  2.  Emphasize Chief of Naval Operations and Naval Supply Systems  Command internal control procedures to ensure inventory levels in  the Hazardous Material Minimization Centers remain within the  authorized limits, and return material exceeding requisitioning  objectives to the supply system.  3.  Emphasize Chief of Naval Operations requirements that ships  requisition only hazardous materials authorized for shipboard use,  and return unauthorized material to the supply system. 4.  Enforce Naval Supply Systems Command requirements that  ships prepare and submit Ship’s Hazardous Material List Feedback  Reports and Allowance Change Requests, whenever required.
The Naval Supply  Systems Command  should: 5.  Establish an interface between authorized allowance documents  and the Type-specific Ship’s Hazardous Material List to ensure that  hazardous material items authorized for shipboard use also have  authorized allowance levels.   6.  Establish procedures to validate Hazardous Material Minimization  Centers low and high inventory levels with those inventory levels in  Relational Supply for the same items to ensure Hazardous Material  Minimization Centers high limits do not exceed Relational Supply  high limits.  7.  Establish procedures that require unissued hazardous material in  the Hazardous Material Minimization Centers be counted as on-hand  inventory before reordering Relational Supply stock.  8.  Develop and implement a hazardous material usage database  that accumulates and retains data on supply system hazardous  material ordered and used by the ship for use in planning future  hazardous material requirements. 9.  Establish procedures to ensure that Enhanced Consolidated  Hazardous Material Reutilization and Inventory management  Program Afloat Program technicians perform tasks in accordance  with the Enhanced Consolidated Hazardous Material Reutilization  and Inventory management Program Afloat Program Desk Guide.  10.  Establish a working group to determine the feasibility for the  development of ship-specific allowance-control documents for all  items managed in the Hazardous Material Minimization Centers not  already on an approved allowance list.
The Office of the  Commander, U.S. Fleet  Forces Command should: 11.  Return the prohibited undesignated hazardous material items to  the supply system for credit.
The Naval Sea Systems  Command, with the  assistance of Naval  Supply Systems  Command should: 12.  Establish formal written guidance stating what system allowance  list hazardous material is designated for and their current quantities  allowed.  Guidance should include requisitioning metrics that cross  check hazardous material items against designated system designs  as generated by Naval Inventory Control Point and Naval Surface  Warfare Center Carderock Division – Ship System Engineering  Station, technical manuals, and one-time General Use Consumable  List.  13.  Clarify Naval Sea Systems Command Instruction 4441.7B/Naval  Supply Systems Command Instruction 4441.29A to measure the  quality of hazardous material load outs instead of the quantity or  percentage of hazardous material loaded on ships.
The Office of the  Supervisor of  Shipbuilding, Conversion,  and Repair Newport News  should: 14.  Discontinue requisitioning aircraft cleaning, maintenance, and  preservation hazardous material for actual aircraft before Post  Shakedown Availability.  15.  Establish formal written local procedures that require detailed  support, justification, and audit documentation for system validation  on all hazardous material requisitions received from ship personnel  after Load Coordinated Shipboard Allowance List delivery.  This  support should indicate the specific system the item is required for  and the document numbers for Preventative Maintenance Schedule,  Maintenance Request Cards, Allowance Equipage List, Allowance  Parts List, General Use Consumables List, and technical manuals.   An Allowance Change Request should be included, if applicable.  16.  Use Outfitting Support Activity when requisitioning all hazardous  material items for ship initial outfitting to minimize local procurement  as required by the Navy Outfitting Program Manual of September  2002.
The Naval Supply  Systems Command  should: 17.  Enforce compliance with established guidance for material  offloads to ensure a uniform use of DD Form 1348 documents  among ships and the proper processing of Transaction Item  Reporting documents to ensure inventory accuracy.  18.  Update the Enhanced Consolidated Hazardous Material  Reutilization and Inventory management Program Afloat Program  Desk Guide to include specific requirements for the Enhanced  Consolidated Hazardous Material Reutilization and Inventory  management Program Afloat Program technician when offloading  Naval Supply Systems Command-owned hazardous material.
The Naval Inventory  Control Point should: 1.  In coordination with Naval Air Systems Command, update policy  and procedures issued to field activities on managing and reporting  aircraft engine/module container inventory.  2.  Require Fleet activities to provide a daily transaction item report  of all intra-activity receipts and issues of engine/module containers to  item managers.  3.  Establish controls to ensure containers are not procured in excess  of requirements.
Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Concurred, closed, implemented  Nonconcurred, closed, implemented Concurred, closed, implemented  4.  Include the Aircraft Engine Container Program as an assessable  unit in Naval Inventory Control Point’s Management Control Program.
The Naval Air Systems  Command should: 5.  Fully fund the engine/module repair container program in  accordance with requirements generated by Naval Inventory Control  Point.  6.  Report any engine/module containers costing $5,000 or more in  the Defense Property Accounting System.
The Naval Inventory  Control Point and Naval  Air Systems Command  should: 7.  Require Naval Aviation Depots, Aircraft Intermediate Maintenance  Depots, and Fleet activities to perform periodic inventories of  engine/module containers, and report the results to Naval Inventory  Control Point’s item managers.
The Commandant of the  Marine Corps should:  1. Terminate the Norway Air-Landed Marine Expeditionary Brigade  program.  2. Prepare a comprehensive statement encompassing disposal  costs, equipment condition, and status of outstanding procurements  and repairs of the excess onhand ground equipment and supplies,  and identify Norway Air-Landed Marine Expeditionary Brigade  program items that would satisfy outstanding procurements and  repairs for fiscal year 2003 and the out years.  3. Cancel the planned modernization procurements associated with  the replacement of Norway Air-Landed Marine Expeditionary  Brigade equipment, subject to negotiated termination costs for one of  the six modernization projects. 4. Cancel all procurements that replenish Norway Air-Landed Marine  Expeditionary Brigade preposition inventory shortages.
The Deputy Chief of Naval  Operations, Warfare and  Requisitions Programs  should: 1.  Perform analyses to establish validated engine readiness  requirements, incorporate ready-for-training engine readiness rates  for training aircraft engines, and establish separate requirements for  different categories of aircraft (such as combat, support, and  training).  2.  Formally document the engine requirements and supporting  rationale in Department of the Navy guidance.
The Deputy Chief of Naval  Operations, Fleet  Readiness and Logistics  should: 3.  Coordinate with Naval Inventory Control Point and Naval Air  Systems Command to require more realistic parameter inputs to the  Retail Inventory Model for Aviation while encouraging engine  maintenance strategies that will ultimately reduce turn around time  and increase reliability (mean time between removal).   4.  Issue written guidance to assign responsibility for calculating  engine war reserve requirements and the need to compute additional  war reserve engine/module requirements.
The Deputy Chief of Naval  Operations, Warfare  Requirements and  Programs should: 5.  Adjust out-year F414-GE-400 engine and module procurement  requirements (to be reflected in the President’s 2004 Budget) to  agree with Naval Inventory Control Point’s revised Baseline  Assessment Memorandum 2004 requirements.
The Commander, Naval  Inventory Control Point  should: 6.  Reiterate Secretary of the Navy policy that documentation  supporting official Baseline Assessment Memorandum submissions  be retained for no less than 2 years.
The Deputy Chief of Naval  Operations, Fleet  Readiness and Logistics  should: 7.  In coordination with Deputy Chief of Naval Operations, Warfare  Requirements and Programs, establish policy and adjust the  procurement strategy for F414-GE-400 engines and modules to  procure (based on current audit analyses) approximately 30 percent  whole engines and 70 percent separate engine modules and thereby  improve the engine/module repair capability.  8.  Issue guidance requiring Naval Air Systems Command to  determine, and annually reevaluate, the engine-to-module  procurement mix for the F414-GE-400.
The Commander, Naval  Air Systems Command  should: 9.  Reduce out-year AE1107C spare engine procurement by 12  (changed to 8 after receipt of management comments) through fiscal  year 2008.  10.  Adhere to the Chief of Naval Operations-approved model (Retail  Inventory Model for Aviation) for calculations of spare engine  requirements.
The Deputy Chief of Naval  Operations, Warfare  Requirements and   Programs should: 11.   Adjust planned out-year Aircraft Procurement, Navy-6 (APN-6)  procurement requirements to reduce the quantities of T700-401C  Cold and Power Turbine Modules by 10 each.
The Commandant of the  Marine Corps should: 1.  Validate the Time-Phased Force Deployment Database  equipment requirements and determine how the Marine Corps will  source (make available) the equipment required and determine if the  equipment required is on the unit’s table of equipment. 2.  Evaluate the Asset Tracking Logistics and Supply System II+ to  determine if it adequately meets user needs and, if not, take  sufficient action to correct identified deficiencies.  3.  Perform onsite technical assessments to determine the extent of  required maintenance/repair.  4.  Provide dedicated organic or contract resources to reduce  maintenance backlogs.  5.  Establish an acceptable level of noncombat deadline equipment  relative to the total combat deadline equipment and total equipment  possessed and report outside the unit to the Marine Expeditionary  Force commander. This would help ensure that the extent of  nonmajor maintenance/repair requirements receives appropriate  visibility and support requests for resources to reduce maintenance  backlogs.
section_title: Supply Chain Management: Summary of Non-audit Organization Report Recommendations
paragraphs: Create a Joint Logistics Command:  Responsible for global end-to-end supply chain,  That includes the U.S. Transportation Command mission,  Defense Logistics Agency, service logistics and  transportation commands as components to Joint Logistics  Command with:  Regional Combatant Commanders retaining operational  control of the flow of in-theater logistics; and  Program managers retaining responsibility for lifecycle  logistics support plan and configuration control.
Lead the work to create an integrated logistics information  system.
Appoint an external advisory board of relevant industry  experts to assist in guiding this effort.
Specific  recommendations  made for tactical  supply, theater  distribution,  strategic  distribution,  national- and  theater-level  supply, and  command and  control.
Supply chain planning needs to be better integrated with a  common supply chain vision.  The newly designated distribution process owner (U.S.
Transportation Command), in concert with the Army, the  other services, and the Defense Logistics Agency, should  develop and promulgate a common vision of an integrated  supply chain. The complementary, not redundant roles, of  each inventory location, distribution node, and distribution  channel should be defined.
Every joint logistics organization should examine and refine  its processes to ensure detailed alignment with this vision.  Review doctrine, organizational designs, training,  equipment, information systems, facilities, policies, and  practices for alignment with the supply chain vision and  defined roles within the supply chain.
The assumptions embedded within the design of each  element of the supply chain with regard to other parts of the  supply chain should be checked to ensure that they reflect  realistic capabilities.
Improve the joint understanding of the unique field  requirements of the services. Likewise, the services need to  understand the Defense Logistics Agency, the U.S.  Transportation Command, and the General Services  Agency processes and information requirements, as well as  those of private-sector providers.
Metrics should be adopted to maintain alignment with the  vision.
Logistics information systems need adequate levels of  resources to provide non-line-of-sight mobile  communications and effective logistics situational awareness  in order to make new and emerging operational and logistics  concepts feasible.
Deliberate and contingency planning should include  improved consideration of the logistics resource  requirements necessary to execute sustained stability and  support operations.
Resourcing processes should consider uncertainty and  implications of capacity shortages.  The flexibility of financial and resource allocation processes  to rapidly respond to the need for dramatic changes in  logistics capacity that sometimes arises from operational  forecast error should be improved.
Logistics resource decisions should more explicitly consider  how much buffer capacity should be provided in order to  handle typical operational and demand variability without  the development of large backlogs.
Joint training should be extended to exercise the entire  logistics system.  The Army should review all wartime and contingency  processes from the tactical to the national level to  determine which are not exercised in training with all  requisite joint organizations participating. Such processes  range from setting up tactical logistics information systems  to planning a theater distribution architecture to determining  national level spare parts distribution center capacity  requirements.
Review which tasks and processes do not have adequate  doctrine and mission training plans.
Planning tools and organizational structures need to better  support expeditionary operations.  Automation should more effectively support the  identification of logistics unit requirements to support a  given operation.
Unit “building blocks” should be the right size and modular  to quickly and effectively provide initial theater capabilities  and then to facilitate the seamless ramp-up of capacity and  capability as a deployment matures.
Conclusions and  recommendations  fall into three  categories:  programmatic,  constructive, and  operational.  Programmatic  conclusions and  recommendations  include: logistics transformation and interoperability. If interoperability  is important to transformation, the Office of the Secretary of  Defense must fund it adequately and specifically, not just the  component systems and organizations being integrated.  Services and agencies will be reluctant to act against their  own financial interest.
Title 10 can be used to prevent joint logistics transformation  and interoperability, and needs clarification. If a Logistics  Command is created, Title 10 may need to be amended.
Expanded Office of the Secretary of Defense leadership  (beyond technical standardization) for joint logistics  transformation is necessary to effect change. The Logistics  Systems Modernization office efforts to realign business  processes and to prioritize rapid return on investment  initiatives are a good start and can be expanded.
A 4-Star Combatant Command – U.S. Logistics Command –  in charge of logistics needs to be created, following the  example of the U.S. Strategic Command. The responsibilities  and enforcement powers of this Logistics Command may be  significantly different than the U.S. Strategic Command  model and require clear specification. Some responsibilities  that this Command could undertake include:  Defining the distribution authorities, scenarios, business  processes and process ownership at the “hand-off” from  U.S. Transportation Command distribution to services  distribution.
Developing doctrine and implementing joint business  processes and rules for logistics interoperability between  services, prioritizing known problem and conflict areas, and  assigning ownership of business processes across the  broader Supply Chain Operations Reference-defined  supply chain.
Identifying budget requirements for logistics interoperability,  and requiring logistics interoperability to be adequately  funded and planned as part of the acquisition process of  any logistics systems.
Accelerating interoperability testing of all Global Combat  Support System implementations both within and across  services and agencies, with a spiral development  methodology.
Coordinating and communicating various isolated ongoing  efforts in defining logistics Extensible Markup Language  schema, business processes, databases, published web  services and other joint logistics projects, with the  Integrated Data Environment and Enterprise Resource  Planning programs underway in the services and agencies.  Where conflicts, redundancies or gaps are identified, the  U.S. Logistics Command may function as an “honest  broker” to develop an interoperable solution, or as a  “sheriff” to enforce an interoperable solution.
A single logistics business process modeling needs to be  created as a common reference, with the understanding that  the modeling effort will be descriptive rather than  prescriptive, due to Services’ autonomy and the need to  continue migrating legacy systems and building new logistics  capability. Since all Services, Agencies and the Office of the  Secretary of Defense are employing the Supply Chain  Operations Reference Model for logistics, some degree of  commonality should already exist. If the process modeling  effort can build on existing U.S. Transportation  Command/Defense Logistics Agency business process  models, and incorporate business process models from each  of the Services, it may be available earlier and used more  effectively. A “greenfield” effort may have limited utility and  never get beyond the requirements stage. Efforts to align  logistics data are underway within the Joint Staff Logistics  Directorate, and in the ongoing U.S. Transportation  Command/Defense Logistics Agency modeling. The  touchpoints between these alignment efforts and the actual  Enterprise Resource Planning implementations within the  services and joint agencies could be expanded. A variety of  “to-be” logistics business process models must be generated  to meet the requirements of varying future war fighting  scenarios. For example, loss of space assets or enemy use  of electromagnetic pulse will create significant constraints on  logistics interoperability, and contingency business  processes should be designed for those scenarios.
The logistics business process must be defined from end-to- end at the DOD level, and then Services and Agencies must  assess how they will or will not align with those processes.  Alignment, interoperability and jointness are consensus  goals for system development, but some Service decisions  not aligned with specific DOD level processes may provide  net benefits and increase the robustness of the overall  logistics System of Systems (the federated supply chain, or  loosely-coupled approach). The ongoing questions that the  U.S. Logistics Command will address are these: Should the  default state for interoperability be alignment, with non- alignment developed as a scenario-based exception? Or  should the default state for interoperability be non-alignment,  with occasional moments of alignment (specific data feeds of  a finite duration)?
Some form of charter or statutory legislation is needed to  prevent joint logistics transformation from backsliding into  non-interoperable organizations and systems, when  leadership changes.
Change management for joint logistics needs to be  resourced specifically, in addition to current resources for  logistics transformation within services and joint agencies.
Fuse the logistics and transportation functions into an  integrated U.S. Logistics Command.
Implement the Beyond Goldwater-Nichols Phase I  recommendation to merge much of the Joint Staff Directorate  of Logistics with its Office of the Secretary of Defense  counterpart, the Deputy Under Secretary of Defense  (Logistics & Material Readiness) into an office that reports to  both the Under Secretary for Technology, Logistics, and  Acquisition Policy.
The public sector should seek to bolster the fault tolerance  and resilience of the global container supply chain.  The closure of a major port-for whatever reason-would have  a significant effect on the U.S. economy. The federal  government should lead the coordination and planning for  such events for two reasons. First, the motivation of the  private sector to allocate resources to such efforts is  subject to the market failures of providing public goods.  Second, the government will be responsible for assessing  security and for decisions to close and reopen ports.
Security efforts should address vulnerabilities along supply- chain network edges.  Efforts to improve the security of the container shipping  system continue to be focused on ports and facilities  (although many ports around the world still failed to meet  International Ship and Port Security Code guidelines even  after the July 1, 2004, deadline.) Unfortunately, the route  over which cargo travels is vast and difficult to secure.  Measures to keep cargo secure while it is en route are  essential to a comprehensive strategy to secure the global  container supply chain.
Research and development should target new technologies  for low-cost, high-volume remote sensing and scanning.  Current sensor technologies to detect weapons or illegal  shipments are expensive and typically impose significant  delays on the logistics system. New detection technologies  for remote scanning of explosives and radiation would  provide valuable capabilities to improve the security of the  container shipping system. level logistics and Army/Land component logistics  requirements and the need for a joint theater-level logistics  commander.
Codify in joint doctrine the distinction between joint theater   Document a Joint Theater Sustainment Command and  assign to Combatant Commands.
Implement useful practices of other services.
Don’t preclude early use of Logistics Civilian Augmentation  Program.
Complete a thorough business-based cost/benefit analysis of  Radio Frequency Identification before spending more money  on it.
Make directive authority for the Combatant Command real.
Joint doctrine must:  Be prescriptive in its language, purging words like “should”  and “attempt” and replacing them with specific direction.
Be joint and comprehensive. It must explicitly address the  joint organizational structure and staffing, develop and  institutionalize joint processes and procedures, and  specifically require, not assume, the necessary  communications infrastructure and information tools to  support this vision.
Support an expeditionary logistics capability to enable rapid  deployment and sustainment of flexible force structures in  austere theaters around the globe.
Reconcile with the emerging concepts of net-centric warfare  and sense and respond logistics, balancing past lessons  with the needs for the future. Joint doctrine must be based  on today’s capabilities, not tomorrow’s promises.
Continue to identify the combatant commander as the locus  of control for logistics in support of deployed forces, and  specify the tools, forces, processes, and technologies  required from supporting commands.
Develop a true expeditionary logistics capability.
Develop logistics systems able to support expeditionary  warfare. Logistics systems must be designed, tested, and  developed to support a mobile, agile warfighter.
Logistics capabilities need to be native to an expeditionary  unit for swift and agile deployment. The people, equipment,  and systems that accompany these small, cohesive units  must be able to integrate data within the services and  commands as well as among the coalition partners.
Logistics communications planning and infrastructure are  an integral part of any operation, and must be robust, fully  capable, and deployable in both austere to developed  environments. Planning and development of the required  infrastructure must consider the issues of bandwidth,  mobility, security and aggregation of logistics data.
Retool the planning processes.
A follow-on replacement for the current Time-Phased Force  and Deployment Data /Joint Operation Planning and  Execution System process is required, with the necessary  improvements in task structures and planning speed. This  process should directly drive sustainment planning,  including acquisition and distribution decisions.
The challenge of requirements identification and fulfillment  in a deployed environment is a joint challenge. Planning  tools must be developed that recognize and fuse the  consumption of materiels and fulfillment of warfighter  requirements across the joint force.
The speed and flexibility of future operations demand that a  closer and more dynamic relationship be developed with  suppliers in the industrial base and prime vendor partners.
Create an integrated theater distribution architecture  Theater distribution capability must be embedded in a  permanent organization within the theater or at least rapidly  deployable to any global location. The balance of reserve  forces and the implications of the activation cycle must be  considered in the development of this organizational  structure and manning.
The need for a joint in-theater distribution cross dock,  staging, and break-bulk operation must be explicitly  recognized in every Combatant Command Area of  Responsibility. Rapid maneuver and task reorganization  precludes a 100% “pure pallet” shipment. Retrograde and  reverse logistics capabilities must also be embedded.
Leadership must recognize that the growth and  development of “joint logisticians” who can operate and  lead effectively in the theater environment will take time and  effort, potentially altering established career progression  plans.
Resolve the technology issues.
Rationalize logistics systems. Current battlefield and  deployment realities include the existence of multiple  systems for logistics support. DOD must complete and  deploy an integrated architecture, including operational,  systems, technical, and data elements to streamline the  systems capabilities to the joint warfighter, and manage the  portfolio of systems to eliminate those that cannot support  the future state.
Create visibility within logistics and supply systems that  extends to the tactical units. Today’s warfighting mission  includes mobile expeditionary engagements. Support  systems need to include the ability to communicate and  synchronize with rear support units and systems 24 hours a  day, 365 days a year in both austere and developed  environments.
Ensure communications capability and availability for  logistics, the environment. Logistics is an information- intensive function with constant requirements for updated  information. Logistics support planning needs to include  communications-level planning and should be completed  before deployment.
Development of the foundational role of the Distribution  Process Owner.  The Distribution Process Owner concept must be  implemented swiftly and should recognize the potential  resource requirements in the near- and mid-term to  complete this task. This is a necessary first step,  addressing distribution challenges, and should facilitate the  establishment of an integrated, end-to-end logistics  architecture, eliminating the confederation of stovepipes.
Financial and transactional systems should not be a  hindrance to going to war: They must be designed so that  the transition from peace to war is seamless; the ability to  employ these systems in a deployed environment must take  precedence over garrison requirements. More emphasis  needs to be placed on managing retrograde and  repairables.
Processes must be synchronized and integrated across the  stovepipes.
Synchronize the chain: from Continental United States to  Area of Responsibility.  Capacities across the distribution nodes and distribution  links, and across the entire logistics network but particularly  in theater, must be reviewed, understood, and actively  managed. The ability to determine and manage practical  and accurate throughput capacities for air and seaports,  along with an understanding of the underlying commercial  infrastructure is essential to future planning. The ability to  evaluate possible scenarios for host nation support is also  critical.
Deploy Performance Based Logistics agreements more  comprehensively.  Standardize Performance Based Logistics implementation.
Implementation of Performance Based Logistics must  become more standard to prevent confusion with other  contractor support services and activities. To the extent  possible, common metrics and terms must be developed  and applied.
Implement Performance Based Logistics across total  weapons systems.
Support broad end-to-end application. Much integration and  synchronization is required to ensure full system  synchronization of performance metrics but the end  capability of tracking total system performance to both cost  and “power by the hour” is a significant potential  advancement in warfighter support.
Make Radio Frequency Identification real.
Extend Radio Frequency Identification to the warfighter.
Asset tracking system capabilities, infrastructure, and  support must extend to the farthest reaches of the logistics  supply chain, even in austere environments.
Do not combine U.S. Transportation Command and Defense  Logistics Agency.  Roles, missions and competencies of the two organizations  are too diverse to create a constructive combination.
Organizational merger would not significantly facilitate  broader transformational objectives of supply chain  integration.
Both organizations perform unique activities/functions in the  supply chain. The real problem is not that the two  organizations are separate, but that their activities are not  well integrated.
Elevate leadership for Department of Defense global  supplies chain integration.  Designate a new Under Secretary of Defense for Global  Supply Chain Integration reporting directly to the Secretary  of Defense.
Ensure the Global Supply Chain Integration is a civilian with  established credibility in the field of supply chain  management.
Establish the Global Supply Chain Integration’s  appointment as a fixed term for a minimum of 6 years.
Direct the U.S. Transportation Command and the Defense  Logistics Agency to report to Global Supply Chain  Integration.
Create a working relationship for the Global Supply Chain  Integration with the Chairman of the Joint Chiefs of Staff.
Build the Global Supply Chain Integration’s staff from  existing staffs in the Office of the Secretary of Defense, the  U.S. Transportation Command, and the Defense Logistics  Agency.
Empower a Global Supply Chain Integrator with the required  authority and control to effect integration. The Global Supply  Chain Integrator should be granted authority to:  Build end-to-end integrated supply chains through the  establishment of policies and procedures.
Enable privatization and partnering with global commercial  distributors.
Oversee program management decisions related to major  systems vendor support.
Establish/authorize organizations and processes to control  flow during deployment/wartime scenarios.
Control budgetary decisions affecting the U. S.
Transportation Command, the Defense Logistics Agency,  and the distribution budgets of the services.
section_title: Comments from the Department of Defense
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
subsections: section_title: Acknowledgments
paragraphs: In addition to the contacts named above, key contributors to this report  were Thomas W. Gosling, Assistant Director, Susan C. Ditto, Amanda M.  Leissoo, Marie A. Mak, and Janine M. Prybyla.