The Department of Defense needs to improve management of its inventory retention activities, the Government Accountability Office has said.
It said inventory retention, which has been on GAO’s high-risk list since 1990, is designed to keep inventory levels above normal operating requirements, and that inventory levels have grown in recent years to nearly $80 billion in fiscal 2005.
Some DoD inventory management centers have not followed DoD-wide and individual policies and procedures to ensure they are retaining the right amount of contingency retention inventory, according to GAO-06-512.
It said for example, that the Army’s Aviation and Missile Command does not properly assign category codes describing the reasons they are holding items in contingency inventory because the inventory system is not programmed to use the codes.
GAO found that items valued at $193 million did not have codes to identify why they were being held, and it found that some inventory centers have held items such as gears, motors and switches that have not been requested in over 10 years.
Some centers are not annually reviewing contingency retention decisions, such as the Navy Inventory Control Point, where officials were unaware that program managers had not conducted the required reviews until GAO brought it to their attention.
GAO also said it’s unknown if these issues occur at other DoD inventory centers which it did not review.