Summary: Pursuant to a congressional request, GAO reviewed the Navy's ship and submarine secondary item inventories, focusing on: (1) the reasons for unrequired inventory; (2) opportunities for minimizing the acquisition of unrequired stock; and (3) inactive inventory items.
GAO found that: (1) requirement and demand changes resulted in about $900 million of unrequired inventory; (2) the Navy's fleet modernization efforts, which included replacing and phasing out equipment and ships, resulted in about $1.7 billion of unrequired inventory; (3) the Navy could not explain why about $1.2 billion in inventory was unrequired; (4) the Navy does not systematically notify inventory control points that items are obsolete; (5) in 1988, the Navy eliminated only about 1,500 items under the Defense Inactive Item Program and 3,200 items under a special project; (6) 30,600 of the Navy's 183,000 inventory items met the Navy's criteria for elimination; and (7) the Navy spent approximately $24 million a year to store and manage questionable inventory items.
