Defense Inventory: Army Needs to Strengthen Internal Controls for Items Shipped to Repair Contractors
Released: 2005-12-13T00:00:00

Letter

Background

Responsibility for controlling and accounting for materiel shipped to repair contractors is shared between the Army and its contractors. Army inventory control points within the Army Materiel Command manage the movement of assets from the Army supply system to commercially operated repair facilities. The Army’s three major inventory control points for secondary repair items are the U.S. Army Aviation and Missile Command, the U.S. Army Tank-automotive and Armaments Command, and the U.S. Army Communications-Electronics Command. Repair contractors are generally required to establish and maintain a property control system for the control, use, maintenance, repair, protection, and preservation of government property in their possession.

Inventory control points, as part of their materiel management functions, maintain the Army’s data systems that support inventory and financial management, requirements determination, maintenance planning, and procurement. These inventory management systems retain the accountable records for inventory transactions, including shipment and receipt records. The U.S. Army Aviation and Missile Command and the U.S. Army Tank- automotive and Armaments Command use the Commodity Command Standard System as their inventory management system. This system will eventually be replaced with the Logistics Modernization Program, which will integrate inventory functions performed by legacy inventory management systems. The U.S. Army Communications-Electronics Command uses the Logistics Modernization Program.

The inventory shipment data we obtained from the U.S. Army Aviation and Missile Command and U.S. Army Tank-automotive and Armaments Command included shipments of secondary repair items and government- furnished materiel sent to contractor facilities located in the continental United States during fiscal year 2004. Many shipments contained multiple items. According to these records, the inventory control points together authorized shipments of more than 25,000 secondary repair items worth approximately $852 million to repair contractors. The records show they also authorized shipments of more than 44,000 government-furnished materiel items valued at approximately $118 million. The survey population we used to draw our sample included all shipments of secondary repair items for which we could not identify matching receipt records for corresponding inventory shipment records, all shipments of government- furnished materiel, and all shipments of classified government-furnished materiel and secondary repair items. Table 1 shows the population of shipments from which we drew our samples.

DOD has established policies for maintaining accountability for assets shipped to repair contractors. Under these policies, for example, contractors are responsible for posting receipts in their property control records and notifying the appropriate inventory control point once they have received shipped assets. The inventory control point establishes a “due-in” record when a shipment is issued to track inventory that will eventually return to the Army supply system. Once notified of receipt by the contractors, the inventory control point processes receipt of a transaction in its inventory management system to reflect the contractors’ receipt of the shipment. If the inventory control point is not notified of receipt within 45 days of shipment, it is required to follow up with the intended recipient to determine shipment status. Without a confirmation of receipt, the status of a shipment is uncertain. In addition, DOD policy states that the military services may establish requirements for their inventory control points to provide advance notification of scheduled shipments to repair contractors.

DOD also requires inventory control points to submit quarterly reports to DCMA identifying quantities and types of government-furnished materiel provided to repair contractors. DCMA assesses the accuracy of repair contractor records and accounts for government property furnished to contractors. The quarterly reports are intended to help contract officers verify that repair contractors have maintained accountability for all government-furnished materiel shipped to their facilities without relying strictly on contractor inventory records.

The Army has established a system for formally reporting errors in shipments. Under DOD and Army regulations, recipients of repair materiel are required to investigate and report shipment discrepancies, such as incorrect quantities and types of items and items sent to the wrong location. If the discrepancy results from shipper error, the recipient submits a supply discrepancy report to the appropriate inventory control point. Inventory control point officials review and validate these reports and provide recipients with instructions for resolving the discrepancy. For example, the customer may be instructed to return misdirected items to the Army supply system or to retain items for future repair work.

In addition to these policies, the Army is obligated to establish and maintain effective internal control systems. The Federal Managers’ Financial Integrity Act of 1982 requires GAO to issue standards for internal control in the federal government. According to these standards, internal controls are an integral component of an organization’s management that provide reasonable assurance that assets are being safeguarded and other objectives are being met. Internal controls should be designed to provide reasonable assurance regarding prevention or prompt detection of unauthorized acquisition, use, or disposition of an agency’s assets. Effective and efficient internal control activities help ensure that an agency’s control objectives are accomplished. Control activities are the policies, procedures, techniques, and mechanisms that enforce management directives, such as the process of adhering to DOD requirements for receipting of shipped assets and generation of quarterly government-furnished status reports.

Internal Control Weaknesses Impede Army’s Accountability for Inventory Shipments

Internal control weaknesses have impeded the Army’s accountability for assets shipped to repair contractors. Army inventory control points do not consistently record receipts for secondary repair items shipped to repair contractors. Furthermore, the Army does not verify receipt of government- furnished materiel. In addition, the Army does not provide shipment status reports to DCMA as required under DOD regulations. A lack of accurate accountability for shipments of secondary repair items and government- furnished materiel places these assets at risk of loss or theft, diminishes asset visibility and can distort on-hand inventory balances, leading to unnecessary procurement of items.

Army Does Not Consistently Record Receipts for Secondary Repair Item Shipments

Army inventory control points are not consistently recording receipts of shipments of secondary repair items in their inventory management systems. In our analysis of fiscal year 2004 shipment data obtained from two Army inventory control points, we could not reconcile shipment records with receipt records for 1,076 (42 percent) of the unclassified secondary repair item shipments, with a value of $481.7 million, or for 30 (37 percent) of the classified secondary repair item shipments, with a value of $8.1 million. In this analysis, we identified shipments that lacked a matching receipt record as well as those shipments for which there was a discrepancy between the number of items shipped and the number receipted. Table 2 displays the results of our analysis for shipments of unclassified secondary repair items.

These data show that Army inventory control points, on the basis of receipt records maintained in its inventory management systems, cannot confirm that a substantial portion of inventory items shipped to repair contractors were in fact received. In the absence of accurate and complete receipt records, the Army lacks inventory transaction data needed for maintaining accurate accountability for an asset as it moves through the repair cycle. Furthermore, inaccurate or incomplete receipt records can lead to a distortion of on-hand inventory balances, thus placing the Army at risk of procuring more items than are needed to support the warfighter. The Army Audit Agency, in September 2004, noted that the Army lacked accurate receipt records for shipments both to contractors and to government- owned depot facilities, and that, as a result, on-hand inventory balances for some items were understated by about $40.8 million.

Our survey results showed that repair contractors could confirm receipt of most, but not all, of the fiscal year 2004 shipments. On the basis of our analysis of the survey results and follow-up work with contractors and Army item managers, we estimated that about 15 percent of the unclassified secondary repair item shipments in our survey population could not be confirmed as being received. We estimated that these lost or unaccounted for shipments have a value of approximately $68 million. For example, our sample of secondary repair items included a shipment of 30 aircraft rotary wing components with a total value of $8.3 million. The Army’s inventory management system did not show a receipt for this shipment, and the contractor had no record of receiving the shipment. On the basis of our work, the status of this shipment remains uncertain.

For classified items, the contractor confirmed receipt for 79 of the 80 secondary repair item shipments but could not confirm receipt for 1 shipment in our survey population with a value of about $17,000. In a subsequent analysis conducted by the Army to determine the status of this classified shipment, the Army discovered that it had erroneously provided us with a duplicate shipment record, causing this shipment to appear unaccounted for based on the original data that the Army had provided for this review. According to the Army, this was not a classified shipment sent to the contractor for repair, but rather a shipment record that pertained to a repaired asset coming from the contractor back into its inventory. The Army provided documentation to confirm the receipt of this asset back into its inventory. On the basis of this data, we deleted this record from our analysis. Thus, all shipments of classified secondary repair items were received by the contractors.

Although required to obtain confirmation of receipt from repair contractors, Army inventory control points lack systematic procedures for obtaining and documenting receipt of shipments of secondary repair items and for following up within 45 days in cases where receipt was not confirmed by the contractors. Army regulations concerning receipt notification do not specify the method or form by which contractors are to notify the inventory control point when they receive shipments. Moreover, multiple individuals at the inventory control points may become involved in the receipting process. Item managers, who manage specific inventory items and authorize shipments of secondary repair items to contractor facilities, are generally responsible for ensuring repair contractors receive shipments. We found that various methods are used to confirm receipt. Some item managers rely on routine reports provided by the contractors or on data obtained from contractors’ inventory data systems. Other item managers confirm receipt by telephone calls to contractor officials. Once the receipt confirmation is obtained, the item manager may pass the receipt information to other inventory control point personnel, who then update the record in the inventory management system. In most cases, these personnel enter the receipt information into the inventory management system manually. Manual updating increases the probability of inaccuracies in receipt data.

Although we could not reconcile 42 percent of the shipments in the Army’s data with matching receipt records, our follow-up survey with repair contractors indicated they were able to confirm receipt for a majority of the shipments. In addition, on the basis of our survey of repair contractors, we estimate that for 82 percent of the shipments, contractors stated they had notified the Army of shipment receipt. However, these receipt notifications were not always recorded in the Army’s inventory management systems. Systematic follow-up within 45 days of shipment by the Army inventory control points could have identified these confirmed receipts, enabling an update of the inventory record to accurately reflect the shipment status.

While contractors are required to report shipment discrepancies through the Army’s supply discrepancy reporting program, we found that this practice does not always occur. In our survey, repair contractors noted discrepancies in shipments that were not formally reported through the Army’s reporting program. It is unclear why all discrepancies were not reported. One explanation provided by several contractors was that Army officials do not routinely provide advance notification to contractors prior to shipment. Because the Army had not notified them in advance of the shipments, they did not expect the shipments to arrive and, therefore, did not file supply discrepancy reports. Some contractors said they only became aware of certain shipments sent to them when they received our survey. Neither DOD nor Army regulations require inventory control points to provide advance notification to repair contractors at the time of shipment. However, DOD regulations state that the military services may require their inventory control points to provide advance notification.

Army Does Not Confirm Receipt of Government- Furnished Materiel

Army inventory control points are not confirming receipt of government- furnished materiel shipments as required under DOD regulation. For shipments of government-furnished materiel, almost all shipments were reported by the contractors in our survey as being received. On the basis of our survey, we estimate that repair contractors could not confirm about 2 percent of all unclassified government-furnished materiel shipments with an approximate value of $3.2 million. These shipments, therefore, are unaccounted for, and thus are vulnerable to loss or theft. Repair contractors confirmed receipt of all 11 shipments of classified government- furnished materiel.

DOD regulations require Army inventory control points to obtain receipt confirmation for all shipments, including government-furnished materiel, and require Army inventory control points to conduct follow-ups if receipt is not confirmed within 45 days of shipment. Army regulations require receipt and follow-up for secondary repair item shipments but do not explicitly address receipting for government-furnished materiel. According to inventory control point officials, the data systems used to manage government-furnished materiel shipments do not store receipting information. Furthermore, these officials told us they do not obtain receipt notification from contractors for government-furnished materiel shipments but, instead, assume contractors receive shipments of government- furnished materiel unless the contractors notify them otherwise. During our review, we noted that the Army’s data systems for managing government-furnished materiel shipments provide automated checks of requisitions to ensure their validity. However, without receipt data, the Army inventory control points lack assurance that contractors have received government-furnished materiel, and as a result, they cannot conduct follow-up within the required time frame to determine whether corrective action is necessary. Moreover, while our analysis shows that contractors could confirm receipt for the majority of the government- furnished materiel shipments, the Army needs to maintain effective internal controls to safeguard its assets and to ensure optimal management of its resources, in accordance with the Federal Managers’ Financial Integrity Act of 1982.

Army Does Not Provide Shipment Status Reports to DCMA

According to DCMA officials, inventory control points do not provide DCMA with quarterly reports showing the status of government-furnished materiel shipments as required under DOD regulation. As a result, DCMA officials may lack data to corroborate contractor-generated data during their inventory audits. Both DOD and Army regulations require inventory control points to generate and submit reports on requisitioned government- furnished materiel to DCMA. The purpose of the reports is to assist DCMA in independently verifying contractor records of government-furnished materiel. These reports are required to identify items under contract, requisitions that have been rejected, quantities and dollar values of shipments, and the number of shipments for which receipts are unknown. However, we found in our work that the inventory control points do not have procedures in place to ensure that this reporting requirement is implemented as required. As result, DCMA officials commonly rely on contractor-generated data to conduct inventory audits and lack an independent data source to corroborate those data.

Conclusions

The Army has not implemented all the internal controls required to ensure that assets shipped to repair contractors are being received. Although DOD has established policies for controlling these assets, we found the Army lacked systematic procedures for implementing the policies, resulting in inaccurate and incomplete receipt records. Moreover, on the basis of our analysis of Army data and survey of repair contractors, some assets remain lost or unaccounted for.

The Army could improve accountability for inventory shipments by strengthening its internal control procedures for receipting secondary repair items and following up in cases where the contractor has not provided notification that items were received, obtaining and documenting receipts for government-furnished materiel, and providing required status reports on government-furnished materiel to DCMA. In addition, DOD guidance for providing advance notification to recipients at the time of shipment, while not a requirement, offers another potential internal control for maintaining accountability of shipments. As the Army continues to move from its legacy inventory management systems to the Logistics Modernization Program, strong internal control procedures will be critical to ensuring that data transferred into the new system are accurate and complete.

Recommendations for Executive Action

To improve accountability of inventory shipped to Army repair contractors, we recommend 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: 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.

Institute policies, consistent with DOD regulations, for obtaining and documenting contractors’ receipt of government-furnished materiel shipments in the Army’s inventory management systems.

Provide quarterly status reports of all shipments of Army government- furnished materiel to DCMA, in compliance with DOD regulations.

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.

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.

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.

Agency Comments and Our Evaluation

In written comments on a draft of this report, the Department of Defense concurred with six of the recommendations and cited specific actions it plans to take to implement these recommendations. DOD also specified implementation timelines for five of its proposed actions. Specifically, DOD reported that the Army intends to create the functionality within the Army’s new Logistics Modernization Program by fiscal year 2007 to (1) create automated suspense files for following-up on nonreceipted shipments, (2) establish receipting capability for government-furnished materiel shipments, and (3) produce quarterly government-furnished materiel status reports and submit them to DCMA. The Army also plans to establish Integrated Product Teams to examine the feasibility and availability of a Web-based query capability to make advanced shipment information available to contractors, and to develop training to ensure that Army inventory management personnel understand the procedures that are in place to strengthen the internal controls for items shipped to repair contractors. These teams are expected to have their results by July 2006. DOD also stated that the Army is currently taking actions to improve the accuracy of the data contained in its inventory management system; however, a timeframe for when this process would be completed was not provided. We believe that these actions cited by DOD are generally responsive to our recommendations.

DOD did not concur with our recommendation in a draft version of this report to investigate and resolve the status of a shipment of an unserviceable classified secondary repair asset that appeared lost or unaccounted for on the basis of our review. However, DOD’s response indicates that the Army complied with our draft recommendation by analyzing its inventory management system records. This analysis showed that the contractor had received the shipment in question, repaired the unserviceable classified item, and later returned this item to the Army’s inventory. In subsequent follow-up work, we obtained the Army inventory data supporting the information cited in DOD’s response. During further analysis of this classified shipment, the Army discovered that the data used in our analysis was a duplicate shipment record that it had erroneously provided to us. On the basis of the new information provided, we were able to verify the status of the classified shipment in question. Consequently, we have deleted this recommendation from our report. DOD’s written comments are reprinted in appendix III.

We are sending copies of this report to the appropriate congressional committees, and it will be available at no charge on GAO’s Web site at http://www.gao.gov. If you or your staff have any questions on the matters discussed in this report, please contact me at (202) 512-8412 or solisw@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix IV.

Scope and Methodology

To evaluate the Army’s effectiveness in maintaining accountability of inventory shipped to repair contactors, we analyzed Army inventory shipment data, surveyed repair contractors that were recipients of inventory shipments, and assessed the Army’s adherence to policies for managing and maintaining accountability for inventory shipments. Our review included shipments of both secondary repair items and government- furnished materiel.

We reviewed Department of Defense (DOD) and Army regulations pertaining to shipped inventory, and discussed inventory management procedures with officials from the following locations: Headquarters, Army Materiel Command, Fort Belvoir, Virginia; the U.S. Army Aviation and Missile Command, Redstone Arsenal, Alabama; the U.S. Army Tank- automotive and Armaments Command, Warren, Michigan, and Rock Island, Illinois; the U.S. Army Communications-Electronics Command, Fort Monmouth, New Jersey; the Surface Deployment and Distribution Command, Fort Eustis and Alexandria, Virginia; and the Defense Contract Management Agency (DCMA), Alexandria, Virginia.

To identify the quantity, value, and security classification of assets shipped to repair contractors, we obtained electronic records from inventory management databases at the U.S. Army Aviation and Missile Command and the U.S. Army Tank-automotive and Armaments Command. We obtained records for Army-owned assets shipped during fiscal year 2004 (Oct. 1, 2003 through Sept. 30, 2004). The records contained descriptive information about each shipment, including item nomenclature, national stock number, unit price, date of shipment, and quantity shipped. Records for secondary repair item shipments also listed the quantity of items received in each shipment. We did not obtain inventory data from U.S. Army Communications-Electronics Command because at the time of our review its inventory management system was undergoing stabilization and could not provide all data elements needed for our audit.

To assess the reliability of the inventory data, we performed manual and electronic testing for errors in accuracy and completeness in the records. When we found discrepancies in the data, such as missing data elements, illogical shipment date sequences, or abnormal data entries, we contacted inventory control point officials to obtain explanations for the discrepancies. As needed, the officials provided corrections to discrepant data. We also reviewed the data to ensure that shipments occurred in fiscal year 2004, were directed to contractor facilities located in the continental United States, and comprised assets that met our criteria for item class and condition code. For secondary repair items, we analyzed the Army data to reconcile shipments for which the receipt record and shipment record had the same document number and suffix, where applicable; national stock number; and quantity. In cases of multiple receipt records for a given shipment, we eliminated all receipt records associated with supply depot transactions and totaled all contractor receipt records, including inventory reversals. When the adjusted quantity receipted, which included the quantity for multiple inventory reversals, did not total the quantity shipped, we classified the shipment as unmatched.

After the validation process, we drew samples of the data population for review. Our sampling methodology enabled us to independently verify the accuracy of the Army’s data on secondary repair items and government- furnished materiel provided to repair contractors. To select repair contractors and items shipped to them, we randomly selected 200 shipments of unclassified secondary repair items from a total population of 1,076 shipments that did not have receipt records that corresponded to shipment records in the Army’s inventory management system. We also randomly selected 200 shipments of unclassified government-furnished materiel from a total population of 3,476 shipments. In addition, we selected all shipments of classified items that appeared in the inventory records, including 11 government-furnished materiel shipments and 79 secondary repair items shipments. For this data sample, we sent a survey to 72 repair contractors, of which 66 responded to the survey. See appendix II for a copy of the survey. The results of our analysis can be projected to the entire universe of shipments that met these selection criteria.

To determine whether repair contractors had received and accounted for the selected shipments, we surveyed each randomly selected contractor to assess whether item types and quantities had been received as documented in Army inventory records. Furthermore, our survey also asked contractors to note any discrepancies between the Army’s data and data in their property control records, and to explain what actions they took to resolve discrepancies such as shipments of incorrect items or quantities. In following up on the survey results, we reviewed survey responses for logical inconsistencies and incomplete data, such as document number, national stock number, quantity shipped, and date receipted, to determine whether the contractor responses were accurate. In cases where one or more of these data fields were inconsistent with data provided from the Army inventory system, we identified the shipment as not received by the contractor and adjusted our estimate of unaccounted for assets. We also obtained data from DOD’s supply tracking system to determine whether the transportation carriers showed proof of delivery for these assets. We also followed up with contractors and Army item managers regarding specific, high-value shipments. On the basis of this follow-up work, we adjusted our initial survey results.

To evaluate the Army’s compliance with DOD regulations requiring submission to DCMA of quarterly government-furnished materiel status reports, we interviewed DCMA officials who oversee contracts for the items included in our statistical sample of government-furnished materiel shipments. These officials were located at DCMA field offices and contractor facilities throughout the United States.

We conducted our review from October 2004 through November 2005 in accordance with generally accepted government auditing standards.

GAO Contractor Survey

In some cases, we may need to follow-up this survey with telephone calls and/or contractor facility site visits to discuss your responses to the survey.

The survey is in two parts. Part 1 contains general questions on the evaluation, and investigative arm of Congress—is conducting a processes you use to receive and account for GFM and/or review of Army inventory management practices for government secondary repair items from the Army supply system. Part 2 furnished materiel (GFM) and secondary repair items shipped to contains questions on specific Army-supplied GFM and/or commercial repair contractors. For the purposes of this review, we secondary repair items that were identified as shipped to your are defining GFM as “A” condition serviceable assets that are used company. This list of items was obtained as a part of a random in the repair, alteration, modification, or production of a higher sample from Army inventory management databases.

You will need to answer the questions in Part 2 of the survey for major end items. GAO’s review will focus on the Army’s controls each of the GFM and/or secondary repair items listed. You will over in-transit assets. As a part of our study, we randomly selected need to complete Part 2 for «GFM» GFM items and «Secondary» commercial contractors to which the Army shipped GFM and/or secondary items shipped to you under the following Contracts: secondary repair items during fiscal year 2004 (October 1, 2003 to September 30, 2004). This electronic survey asks for information on your processes for receiving and accounting for GFM and/or secondary repair items, as applicable, and requests data for specific items that were identified as shipped to you from the Army supply system. In our final report, all responses will be aggregated and there will be no linkages between data and specific contractors.

Most questions in this survey can be answered by left-clicking on receiving and accounting for GFM and secondary repair items. and selecting appropriate answers.

Some questions require you to type data or comments into the necessary, but please designate one individual to have overall shaded response fields ____.

Part 1 of the survey should take about 10 minutes to complete.

The time for completing Part 2 will vary by the number of GFM of the survey so we can call or e-mail that individual if additional and/or secondary repair items listed, and by the time required to information is necessary. review files associated with the information requested.

Please save your answers electronically, and return this file as an e- mail attachment to Mr. Paul Rades at radesp@gao.gov or Ms.

Jackie McColl at mccollj@gao.gov by July 25, 2005. If you have any difficulty using this electronic survey, please contact the GAO staff named below to request a paper version.

If you have any questions about the survey, you may contact either (1) Paul Rades at radesp@gao.gov or (202) 512-3641, or (2)

Jackie McColl at mccollj@gao.gov or (404) 679-1948.

Part 1: General Information

stock number, quantity, date received, etc.) into your property control system for GFM and/or secondary items received from the Army supply system?

Yes………….

No………….. the questions, left-click on the shaded response fields and select the appropriate response. For questions that require you to enter data or comments, left-click on the shaded response fields and type in your responses.

Company: «ContrName1» system?

1. Do you have a Defense Contract Management Agency (DCMA) approved property control system?

No…………………………...

Yes…………..

Yes, for GFM only………….. your most recent approval.

Yes, for secondary repair items only…………………...

No…………...

Yes, for both GFM and 2. Do you receive GFM items at this facility? GFM is defined as “A” condition serviceable assets that are used 7. If you have any additional comments, please type them in the repair, alteration, modification, or production of a in the space below. Please specify the question(s) to higher assembly. which your comments refer.

Yes…………..

Type your comments here.

No…………... 3. Do you receive secondary repair items at this facility?

Secondary repair items are defined as unserviceable assets requiring repair, alteration, or modification, excluding major end items.

Yes………….

No………….. attachment(s) for each Contract. the Army supply system or a prime contractor?

No…………..

If No, please explain below.

If No, please explain.

Material (GFM) and Secondary

Performance Based Logistics (PBL) or similar non- traditional contract?

Repair Item Shipments

This section contains questions on specific GFM and/or contract below.

List the contract type here.

No……………. are defining GFM as “A” condition serviceable assets that are used in the repair, alteration, or modification, or production of a 4. At the time of shipment, were you authorized to receive higher assembly. We are defining secondary repair items as the item(s) as the prime contractor or the sub- unserviceable assets requiring repair, alteration, or modification, contractor? to exclude major end items.

Sub-contractor………..…. shaded response fields and selecting the appropriate responses.

For questions that require you to enter data such as dates and national stock numbers, left-click on the shaded response fields 5. For the shipped item(s), please enter in line 5a the date and type in the appropriate information. that the shipment receipt was posted in your records.

Contract Number: «Contract» document number, please enter under line 5b the receipt dates posted for the first and last shipments received.

Date Shipped: «ShpDate» posted in your records match with «DOC»?

1. Do your property records reflect that you received the item(s)?

No…………….

No…………….

If No, skip to Question 11.

7. For the shipped item(s), does the national stock number 2. For the shipped item(s), does the contract number that (NSN) posted in your records match with «STK_NO»? authorized you to receive the item(s) at the time of shipment match with «Contract»?

No…………….

If No, enter the contract number contained in your records: Enter the contract number here. 8. For the shipped item(s), does the quantity posted in your 11. Was there a discrepancy in the shipment of the records match with «Shipped»? item(s)?

Yes…………….

Yes………….

No…………….

No…………..

If No, skip to Question 18. posted in your records: 12. What was the reason for the discrepancy? Please select all that apply.

Item was never received. had received the item(s)?

Quantity of items received was not correct.

Item received was not the correct item.

Item received was an unacceptable substitute item.

No…………….

If No, skip to Question 11.

Item received was damaged or in poor condition.

Item received had not been requisitioned.

Manager, Program Office, field activity, etc.) or prime wrong activity.

Other: Describe other reasons for the discrepancy select all that apply.

Entered receipt through electronic interface with Command Commodity Supply System (CCSS) or Logistics Modernization Program (LMP). . Did you report the discrepancy for the shipped item(s)

Entered receipt for the item(s) through the to the responsible Army organization (e.g., Inventory Control Point, Program Manager, Program Office, (CAV or CAVII) system. field activity, etc.) or prime contractor?

Yes…………. receipt of the item(s).

No…………..

If No, skip to Question 16. prime contractor to acknowledge receipt of the item(s).

Provided routine reports to the Army or prime contractor that identified items on hand, (e.g., asset picture).

Other: Describe other means used to notifiy the responsible Army organization or prime contractor. 14. How did you report the discrepancy? Please select all 18. What is the current status of the GFM or secondary that apply. repair item(s)? Please select all that apply.

If GFM item(s), select from the responses listed below.

Submitted a Report of Discrepancy (ROD)/Supply Discrepancy Report (SDR) using Standard Form (SF) 364.

Submitted a Transportation Discrepancy Report (TDR) using Standard Form (SF) 361.

Submitted a discrepancy report online through alteration, modification, or the Army Electronic Product Support production of a higher assembly. (AEPS) website.

Contacted the responsible Army organization remains in your inventory. (e.g., Inventory Control Point, Program Manager, Program Office, field activity, etc.)

Item was not consumed, and was or prime contractor by telephone, e-mail, or passed to another commercial or faxed memo. government repair facility.

Other: Describe other method for reporting discrepancy.

Item was returned to the Army supply system or to the original source of supply.

Other: Describe other status of the GFM item.

If secondary repair item(s), select from the which you filed the discrepancy report? responses listed below.

Yes………….

No…………..

Item(s) is currently being repaired or awaiting repair.

16. Was the discrepancy resolved?

Yes………….

No…………..

If No, please explain below, in your inventory. and then skip to Question 18.

Item(s) is awaiting disposition.

Type your explanation here. organization.

Other: Describe other status of the secondary . Was the discrepancy resolved to your item. satisfaction?

Yes………….

19.

No…………..

If No, please explain below. them in the space below. Please specify the question(s) to which your comments refer.

Type your explanation here.

Comments?

Comments from the Department of Defense

GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the contact named above, Thomas Gosling, Assistant Director; Arthur James; Stanley Kostyla; Jacqueline McColl; Marjorie Pratt; and Paul Rades made key contributions to this report.