The value of DOD inventory requirements needed to support acquisition leadtime grew from about $8 billion in 1979 to about $21 billion in 1989. Recognizing that excessively long acquisition leadtime was a major contributor to the large growth in defense inventories in the 1980s, in May 1990 DOD directed the military services and DLA to take a number of initiatives to reduce acquisition leadtime as a part of a 10-point Inventory Reduction Plan. The recommended initiatives included (1) establishing procurement leadtime reduction goals, (2) shortening production leadtimes by gradually reducing the required delivery dates in contract solicitations, and (3) expanding multiyear contracting and indefinite quantity requirements contracts. Similar policy guidance for reducing acquisition leadtime, except for establishing reduction goals, was included in DOD Material Management Regulation 4140.1-R, dated January 1993. The leadtime reduction initiatives were based on a December 1986 DOD memorandum that included the recommendations of a study performed for DOD by the Logistics Management Institute. The DOD memorandum and the Institute study showed that a 25-percent reduction in leadtime was achievable by adopting methods proven successful in the private sector. In stressing the significance of the initiatives, DOD commented that each day the DOD-wide average leadtime is reduced future purchases can be reduced by $10 million. Since 1990, DOD has had only limited success in achieving the 25-percent reduction indicated by the study. As shown in table 1, DOD’s average leadtime decreased by about 9 percent. On the basis of DOD’s estimate that $10 million can be saved for each day the average leadtime is reduced, the 56-day leadtime reduction resulted in procurement savings of $560 million. A further leadtime reduction of 91 days will be needed to achieve the 25-percent reduction indicated by the study. Such a reduction would result in additional procurement savings of $910 million. None of the DOD components have fully implemented DOD’s 1990 leadtime reduction initiatives or its 1993 policy guidance for reducing leadtime, but some have made greater efforts than others. As shown in table 1, the Navy had the greatest success and the Air Force had the least success in reducing acquisition leadtime. From 1990 to 1994, the Navy reduced the overall average acquisition leadtime by 193 days, or about 27 percent. This was accomplished by a number of actions. In accordance with DOD initiatives, the Navy first established a leadtime reduction goal of 25 percent. The Navy then had the inventory control points reduce the leadtimes shown in their databases by 25 percent for each item managed. Finally, the Navy took aggressive action over the next 4 years to shorten required delivery dates in contract solicitations and negotiations. From 1990 to 1994, the Army’s average acquisition leadtime decreased by 21 days, or about 3 percent. Unlike the Navy, the Army did not establish a leadtime reduction goal, nor did it take action to obtain leadtime reductions through contract solicitations and negotiations. Instead, the Army emphasized another of DOD’s initiatives to reduce leadtime by using more flexible procurement methods such as multiyear procurements and indefinite quantity type contracts. According to Army officials, quantities for follow-on years can be easily added to multiyear and indefinite quantity type contracts, which will reduce administrative leadtime to a matter of days instead of months. Also, delays in starting up production are minimized. As an example of the impact of these types of contracts, in 1993 the Army reported that a 3-year vehicle roadwheel purchase by the Tank-Automotive Command reduced acquisition leadtime by 13 months (7 months’ administrative and 6 months’ production) resulting in a savings of about $19 million. Similarly, by using an indefinite quantity type contract to purchase sprockets, this command reduced acquisition leadtime by 15 months and saved about $5 million. From 1990 to 1994, the Air Force’s average acquisition leadtime increased by 6 days, or about 1 percent. The Air Force did not implement DOD’s 1990 leadtime reduction initiatives because it felt that no action was needed to reduce leadtime based on a comparison with the leadtimes of the Navy. The Air Force delayed implementation of the initiatives pending an evaluation of the Navy’s reported success in achieving a 25-percent decrease in production leadtime without degrading mission support. In its evaluation, the Air Force compared aviation data due to the similarity of parts. On the basis of this evaluation, which was completed in December 1993, the Air Force concluded that its production leadtimes for both repairable and consumable aviation parts were lower than the Navy’s leadtimes, even after the 25-percent reduction. The Air Force, therefore, concluded that no action was needed to reduce production leadtime. We analyzed and compared leadtime data for the Air Force and the Navy as shown on their latest available inventory stratification reports of March 31, 1993, and September 30, 1993, respectively. We found that the Air Force’s production leadtime was lower for consumable parts, but considerably higher for repairable parts. The Air Force’s average production leadtime for repairable parts of 596 days was 176 days, or about 42 percent, higher than the Navy’s leadtime of 420 days. Also, the Air Force’s overall average acquisition leadtime of 818 days for repairable parts was 299 days, or 58 percent, higher than the Navy’s acquisition leadtime of 519 days. From 1990 to 1994, DLA’s average acquisition leadtime decreased by 16 days, or about 5 percent. DLA did not establish a leadtime reduction goal or attempt to reduce leadtime through contract solicitations and negotiations, as recommended by DOD’s leadtime reduction initiatives. Instead, DLA concentrated on various initiatives to automate the procurement source selection process and on increased use of long-term contracting techniques, such as indefinite quantity type contracts. As the result of a study by its supply centers that identified the potential for shorter leadtimes for high dollar, high demand, long leadtime items, in February 1994 DLA drafted proposed policy guidance for implementing acquisition leadtime reduction initiatives. The proposed policy would require the supply centers to reduce leadtime by 30 percent over a 2-year period from a base of fiscal year 1992 (a reduction of 86 days). To accomplish this reduction, the supply centers would request shorter delivery times in contract solicitations, consider shorter production leadtimes as a factor in competitive bid evaluations, and periodically validate and update production leadtimes through market surveys. As of October 1994, DLA had not implemented the proposed policy, pending its decision to incorporate the policy as a part of a broader business plan it was developing. With the exception of the Navy, the military services and DLA placed no timely emphasis on the effective implementation of DOD’s 1990 leadtime reduction initiatives or its 1993 leadtime reduction policy. Also, DOD was not aware of the general lack of progress made over the past 4 years in reducing leadtime because of an absence of adequate oversight information. The Navy’s success in reducing leadtime by 27 percent in comparison to the limited progress made by the other DOD components shows that DOD can benefit by placing renewed emphasis on effective implementation of the leadtime reduction initiatives. One way would be to focus on the Navy’s success in establishing a 25-percent reduction goal and achieving that goal by taking aggressive action to reduce production leadtime in contract solicitations and negotiations. DOD was not aware of the general lack of progress in implementing the initiatives because the annual progress reports required of the military services and DLA did not provide sufficient oversight information to make a meaningful assessment. The reports did not show historical trends in leadtime days before and after the 1990 initiatives. Also, the reports did not provide any meaningful statistics showing the extent of implementation. For example, Army and DLA reports stated that an expansion of multiyear procurements was a primary means of reducing leadtime, but the reports did not provide statistics showing the extent of the expansion. We identified additional opportunities for significant reductions in acquisition leadtime that were overlooked by the DOD initiatives. These opportunities are having inventory management activities (1) periodically validate recorded leadtime data, (2) work closely with major contractors to update old leadtime data for items with long production leadtimes (e.g., over 18 months), and (3) consider potential reductions in leadtime as a factor in deciding whether to purchase spare parts through the prime contractor or directly from the actual manufacturer. We reviewed the accuracy of acquisition leadtimes at the Air Force’s Oklahoma City and San Antonio Air Logistics Centers and the Army’s Aviation and Troop Command and found that the Army’s leadtimes were more accurate. The Army command had a higher accuracy rate than the centers because it had recently worked closely with eight major contractors to update production leadtimes for all items with leadtimes of 18 months or longer. As a result, leadtime changes were made for 1,129 items, or 75 percent of the items reviewed. Leadtime decreases accounted for 1,061, or 94 percent of the changes. The command estimated net annual procurement savings of $88 million from using updated leadtimes to compute buy requirements. Although the Army command reduced leadtimes, our review still identified inaccuracies. We tested 26 items and found that the leadtimes for 5 items, or 19 percent, were inaccurate. For example, in July 1994 the Aviation and Troop Command used an administrative leadtime of 9 months in the requirement computation for a rotor blade tip used on the UH-60 Black Hawk helicopter (NSN 1560-01-331-3845). However, procurement history records showed that the administrative leadtime required to process the last two purchases was only 2 months. The item manager told us that the 9-month administrative leadtime was based on the time it took to award a multiyear contract and that the 2 months’ administrative leadtime represented the time it took to place orders against the contract.