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Financial Management: Savings Attainable By Preventing Condemnation Of Economically Repairable Equipment

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Report Type Reports and Testimonies
Report Date Oct. 23, 1968
Report No. B-146874
Subject
Summary:

GAO reviewed the Air Force's policies and procedures covering determinations by base maintenance personnel as to whether unserviceable items that cannot be repaired at Air Force bases should be scrapped or returned to depots.

GAO noted that: (1) Air Force policy is to repair parts in lieu of buying new ones if the cost is less than 65 percent of replacement cost; (2) otherwise, Air Force bases are permitted to scrap the parts; (3) during a 6-month period in 1967, Air Force bases condemned and disposed of unserviceable parts, designated as depot repairable, valued originally at $ 6.7 million; (4) GAO selected 78 items from the scrap yards of 5 Air Force bases and found that 51 (65.4%) could have been repaired for amounts significantly less than replacement costs; (5) for example: (a) a pump valued at $346, could have been repaired for $132.08; (b) a valve, valued at $135, could have been repaired for $53.78; and (c) an actuator, valued at $644, could have been repaired for $64; (6) supplies of many of these items were limited; (7) in some cases, purchase actions had been initiated; (8) although the number of items selected was necessarily limited by the types and number on hand in the scrap yards at the time of GAO's review, GAO believes that the items selected are reasonably representative of the items condemned at the five bases during the test periods; and (9) the primary reason for the improper condemnation of economically repairable parts is that maintenance personnel at the bases do not have adequate knowledge of depot repair costs, procedures, and capabilities upon which to base their determination as to repairability.

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