Summary: Pursuant to a congressional request, GAO reviewed the growth of the Army Aviation Systems Command's (AVSCOM) inventories beyond military requirements, focusing on: (1) causes for excessive stock increases; and (2) actions needed to limit inventory growth without affecting military capabilities.
GAO found that: (1) unrequired AVSCOM inventories increased from $207 million to $804 million, or 289 percent; (2) 21 of 45 unrequired inventory items, totalling $453 million, were end items for obsolete equipment; (3) although the Army rescinded a 1984 moratorium limiting the disposal of end items, it was still reluctant to dispose of the unrequired inventories for fear that it would need them for future contingencies; (4) the Army's inventory retention policy permitted retention of unrequired stocks under economic, contingency or numeric retention levels; (5) 13 of 45 items, valued at $33.8 million, exceeded military requirements because AVSCOM overestimated the demand rates for those items; (6) AVSCOM acquired excessive stocks for 6 of 45 items, valued at $26 million, because its inventory database computed incorrect requirements levels from erroneous information entered by Army personnel; (7) other factors accounted for $18.4 million in unrequired AVSCOM inventories; and (8) despite recommended curtailment of procurement activities and an awareness of database inaccuracies, AVSCOM continues to emphasize buying over cancelling unneeded items, and has not established a system for correcting database errors.
