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United States Government Accountability Office: 
GAO: 

Report to the Chairman, Committee on Homeland Security and 
Governmental Affairs, U.S. Senate: 

March 2014: 

Defense Logistics: 

Actions Needed to Improve Department-Wide Management of Conventional 
Ammunition Inventory: 

GAO-14-182: 

GAO Highlights: 

Highlights of GAO-14-182, a report to the Chairman, Committee on 
Homeland Security and Governmental Affairs, U.S. Senate. 

Why GAO Did This Study: 

DOD manages nearly $70 billion of conventional ammunition—which 
includes many types of items other than nuclear and special weapons—at 
eight Army depots. The military services use automated information 
systems to manage their inventory. They also compile annual reports 
that compare ammunition inventory levels against stated requirements. 
GAO was asked to evaluate DOD's management of conventional ammunition. 
This report addresses the extent to which (1) the services' 
information systems facilitate efficient management of the 
conventional ammunition inventory and (2) the services collect and 
share inventory data to help them meet their stated requirements. GAO 
reviewed DOD guidance on materiel management and logistics systems, 
reviewed the services' annual inventory reports for fiscal years 2009 
to 2013, and discussed inventory management and related issues with 
service officials. 

What GAO Found: 

The military services use automated information systems to manage and 
maintain accountability for the Department of Defense (DOD) ammunition 
inventory, but the systems have some limitations that affect their 
ability to facilitate efficient management of conventional ammunition. 

* The systems cannot directly exchange ammunition data because they 
use different data exchange formats. Only the Army's Logistics 
Modernization Program (LMP) system uses the standard DOD format. The 
other services have not adopted this format, although Air Force 
officials have said that they plan to by 2017. Without a common format 
for data exchange, the services will continue to devote extra time and 
resources to ensure efficient data exchange between their systems and 
LMP. 

* LMP has some limitations in its ammunition-related functionality 
that can affect the accuracy and completeness of data for items stored 
at Army depots and require extra time and resources to confirm data or 
correct errors. The Army acknowledges there are limitations in LMP; 
however, it has not yet developed a comprehensive plan, with time 
frames and costs, for addressing the limitations. Such a plan could 
provide DOD reasonable assurance that its efforts to upgrade 
ammunition-related functionality in LMP are making progress. 

* The Army developed the National Level Ammunition Capability (NLAC) 
as a DOD-wide repository of ammunition data, but NLAC has some 
limitations in providing ammunition visibility-—that is, having 
complete and accurate information on items wherever they are in the 
supply system. The Army does not have reasonable assurance that NLAC 
collects complete and accurate data from service systems because it 
does not have checks and controls that federal internal control 
standards recommend to ensure source data is reliable. Without steps 
to ensure the quality of the data that flows into NLAC, DOD officials 
risk making decisions based on inaccurate and incomplete inventory 
information, or ammunition offices may have to devote extra staff and 
time to obtain accurate data of DOD-wide inventory. 

To identify inventory owned by one service that may be available to 
meet the requirements of another service, the military services have a 
process for collecting and sharing ammunition data. Through a 
stratification and redistribution process, the services assess whether 
inventory can meet stated requirements and then may transfer available 
inventory, including inventory in excess of one service's requirement, 
to another service. This redistribution offsets procurements of 
ammunition items. To facilitate this process, each service develops 
and shares ammunition inventory data in annual reports. The Army's 
annual report, however, does not include information on certain 
missiles. Also, the Army's report does not include information on all 
available, usable ammunition that in a prior year was unclaimed by 
another service and placed in storage for disposal; DOD guidance does 
not require that such inventory be included in the reports. Without 
incorporating these items in the Army's report, DOD may lack full 
transparency about all available items and may miss opportunities to 
avoid procurement costs for certain usable items that may already be 
available in the Army's stockpile. 

What GAO Recommends: 

GAO is making seven recommendations to improve the efficiency of the 
services' systems for managing DOD's conventional ammunition inventory 
and to improve data sharing among the services, including implementing 
data exchange standards, developing a plan for improving the accuracy 
and timeliness of ammunition data in the Army's LMP, enhancing DOD's 
ability to provide total asset visibility over conventional 
ammunition, and incorporating additional items as part of the 
services' current stratification and redistribution process. DOD 
concurred with all of these recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-14-182]. For more 
information, contact Zina D.Merritt at (202) 512-5257 or 
merrittz@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Military Services' Systems Have Some Limitations That Affect Their 
Ability to Facilitate Efficient Management of Conventional Ammunition: 

Services Have a Process for Collecting and Sharing Data on 
Conventional Ammunition, but the Army Does Not Report Information 
about All Available and Usable Items: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Single Manager for Conventional Ammunition Organization: 

Appendix III: Comments from the Department of Defense: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Status of Ammunition-Related Upgrades That Were Initially 
Included in LMP Increment 2: 

Figures: 

Figure 1: Sources and Users of NLAC Data: 

Figure 2: Data Transmission from LMP to Service Ammunition Systems: 

Figure 3: Services' Ammunition Requisition Processes When Including 
Specific Instructions: 

Figure 4: NLAC Users: 

Abbreviations: 

AMC: Army Materiel Command: 

CAS: Combat Ammunition System: 

DLA: Defense Logistics Agency: 

DLMS: Defense Logistics Management Standards: 

DOD: Department of Defense: 

DRRS: Defense Readiness Reporting System: 

GCCS-J: Global Command and Control System-Joint: 

GCSS-J: Global Combat Support System-Joint: 

JOCG: Joint Ordnance Commanders' Group: 

JOPES: Joint Operation Planning and Execution System: 

LMP: Logistics Modernization Program: 

MILS: Military Standard Systems: 

NLAC: National Level Ammunition Capability: 

OIS: Ordnance Information System: 

OIS-MC: Ordnance Information System-Marine Corps: 

PEO: Program Executive Office: 

SMCA: Single Manager for Conventional Ammunition: 

WARS-NT: Worldwide Ammunition Reporting System-New Technology: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

March 31, 2014: 

The Honorable Thomas R. Carper: 
Chairman: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Dear Mr. Chairman: 

The Department of Defense (DOD) manages a stockpile of conventional 
ammunition valued at nearly $70 billion. Conventional ammunition 
includes items ranging from small arms cartridges to rockets, mortars, 
and artillery to tactical missiles.[Footnote 1] DOD policy calls for 
the highest possible degree of efficiency and effectiveness in 
ammunition acquisition and logistics,[Footnote 2] and managing this 
inventory involves extensive coordination among the Army, Navy, Marine 
Corps, and Air Force. For example, many ammunition items entering 
DOD's supply system are delivered to eight Army-managed ammunition 
depots and are stored there until the items are requisitioned and 
transferred to an Army or another service's unit, supply point, or 
other location. The depots have about 30.5 million square feet of 
storage space and, as of August 2013, housed about 1.7 million tons of 
conventional ammunition belonging to all of the military services. 

The military services have several automated information systems for 
managing the conventional ammunition inventory. The services each have 
their own systems that provide accountability over items and that 
maintain various item-specific data such as location, condition, and 
quantity. To promote efficient transfers of data among the systems, 
DOD has directed that logistics systems migrate toward a standard data 
exchange format. For example, the service systems routinely exchange 
data with the Army's Logistics Modernization Program (LMP), an 
information system that is used to manage operations at ammunition 
depots and other Army industrial activities.[Footnote 3] The military 
services rely on Army data in LMP to help them maintain accountability 
of items, including ammunition, they own that are stored and managed 
at the Army's depots. In addition to the services' systems, the Army 
has a data repository called the National Level Ammunition Capability 
(NLAC). NLAC collects ammunition data from across the department and 
provides these data to DOD decision-support systems, such as those 
used for readiness assessments and joint operational planning. NLAC is 
an outgrowth of prior efforts by DOD to achieve total asset visibility 
[Footnote 4] of conventional ammunition inventory. 

As part of their ammunition inventory management, the services also 
are required by DOD guidance to generate "stratification" reports that 
show the status of the inventory at a point in time.[Footnote 5] The 
reports are to list, or stratify, the inventory by category, including 
item quantities that are needed to meet specific requirements, such as 
for training or war reserves, and the quantities being retained for 
possible future use or for economic reasons,[Footnote 6] as well as 
the quantities that are not needed for these purposes. The services 
are to prepare these reports prior to an annual conference where 
service representatives may agree to transfer items that are excess to 
one service's needs to another service having a requirement for those 
same items. 

You requested that GAO evaluate DOD's management of conventional 
ammunition. This report assesses the extent to which (1) the military 
services' information systems facilitate efficient management of the 
conventional ammunition inventory and (2) the military services 
collect and share inventory data to help them meet their stated 
requirements. 

To determine the extent to which the military services' information 
systems facilitate efficient management of the conventional ammunition 
inventory, we reviewed DOD guidance on conventional ammunition, supply 
chain, and logistics systems management. We reviewed key documents 
from the Under Secretary of Defense for Acquisition, Technology, and 
Logistics; technical guidance from the Defense Logistics Agency 
Management Standards Office; and documentation of services' responses 
to a common set of questions related to their systems. We obtained 
access to NLAC, and conducted tests to compare data with the services' 
source data. We also interviewed officials in each of the services' 
ammunition system program offices, the Army's Joint Munitions Command, 
the Office of the Secretary of Defense, and other relevant offices. 

To determine the extent to which the military services collect and 
share inventory data to help them meet their stated requirements, we 
reviewed policies, procedures, and other guidance, as well as reports 
responding to conventional ammunition reporting requirements for the 
services. These reports list items in the current inventory (as of the 
date of the report) and display how much meets or exceeds service 
requirements. We reviewed the reports (hereafter referred to as annual 
reports) that each service produced and shared with other services in 
fiscal years 2009 through 2013. We selected this period of time to 
observe how inventory reporting changed from year to year.[Footnote 7] 
We attended an annual conference where service participants discussed 
inter-service transfers of items. We interviewed officials 
knowledgeable about the annual ammunition report process and 
determined that the information included in those reports was 
sufficiently reliable for the purposes of our report. Appendix I 
provides further information on our scope and methodology. 

We conducted this performance audit from December 2012 to March 2014 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

Organization for Management and Oversight of Conventional Ammunition: 

DOD has an extensive organizational structure for managing and 
overseeing conventional ammunition, with the Army having a prominent 
role. Since 1975, the Secretary of the Army has served as DOD's Single 
Manager for Conventional Ammunition (hereafter referred to as the 
Single Manager). Under DOD guidance, the Single Manager's mission 
encompasses all aspects of the life cycle of conventional ammunition, 
from research and development through acquisition, inventory 
management, and eventual disposal.[Footnote 8] The Single Manager, the 
military services, and U.S. Special Operations Command all have 
responsibilities pertaining to assigned conventional ammunition items, 
[Footnote 9] including logistics management, stock control, and 
reporting on the status of inventory. In addition, DOD organizations 
involved in ammunition management have developed joint policies and 
procedures to guide certain activities. 

The Secretary of the Army, in executing the Single Manager role, has 
delegated and designated related functions to a number of Army 
entities. For example, responsibility for issuing policy and providing 
oversight of the Single Manager mission is delegated to the Assistant 
Secretary of the Army for Acquisition, Logistics, and Technology. The 
Deputy Commanding General of Army Materiel Command serves as the 
Executive Director for Conventional Ammunition, responsible for 
monitoring and assessing the overall Single Manager mission and for 
overseeing the Single Manager's execution of its mission for joint 
service activities. Joint Munitions Command, a subordinate command of 
Army Materiel Command, is assigned as the field operating activity for 
the Single Manager, responsible for providing logistics and 
sustainment support, storing and managing wholesale ammunition for all 
of the military services, and providing information to the military 
services on ammunition stored at Army depots.[Footnote 10] In this 
role, the Joint Munitions Command maintains items, performs physical 
inventory checks, and reports on the status of assets that are stored 
at its eight depots across the United States. Aviation and Missile 
Command provides similar functions for tactical missiles that are 
stored at these sites. 

The Under Secretary of Defense for Acquisition, Technology, and 
Logistics has responsibility to provide policy and guidance for the 
Single Manager's mission and, in collaboration with other DOD 
component heads, appraise the overall performance of the Single 
Manager in accomplishing the mission objectives outlined in guidance 
and facilitate improvements.[Footnote 11] Appendix II depicts the 
organizational structure of these offices. 

Military Services' Systems for Managing Ammunition Inventory: 

All of the military services have automated information systems for 
managing and maintaining accountability for ammunition inventory. The 
Air Force has developed the Combat Ammunition System, which contains 
comprehensive information on ammunition at all levels--depot, 
ammunition supply points in theaters of operations, and individual 
units. The Navy uses its Ordnance Information System, which is divided 
into two sub-systems for wholesale and retail stocks. The Marine Corps 
has developed the Ordnance Information System-Marine Corps, which 
shares a common system architecture with the Navy's system. 

The Army has LMP as well as other systems--such as the Worldwide 
Ammunition Reporting System-New Technology--which contain 
comprehensive information about wholesale and Army retail ammunition 
stocks. LMP, among other functions, stores information on wholesale 
inventory in all classes of supply, including ammunition. LMP contains 
information on all ammunition inventory stored at Army depots, 
including inventory that the Army manages for other services. The Army 
completed final deployment of initial LMP capabilities, referred to as 
Increment 1, in 2010. In December 2011, the Army began to develop 
additional capabilities for LMP--referred to as LMP Increment 2. The 
Army plans to deploy Increment 2 in multiple stages between December 
2013 and September 2016. 

DOD's Efforts toward a Single Database for Ammunition Inventory: 

DOD has worked for decades to achieve department-wide visibility of 
ammunition stocks in a single database. Drawing upon lessons learned 
from the Gulf War in 1990-91, it sought to develop a Joint Total Asset 
Visibility system to provide logistics information on all classes of 
supply. For ammunition, it aimed to integrate multiple service 
databases to provide a department-wide ammunition capability. DOD also 
initiated a program to develop a Joint Ammunition Management Standard 
System. When that program was terminated because it did not provide a 
single, viable department-wide source of ammunition data, the Army 
then agreed to support the sustainment of the ammunition portion of 
the joint asset visibility database, known as the National Level 
Ammunition Capability, or NLAC. In fiscal year 2012, NLAC's budget was 
about $2.4 million. NLAC receives data from a variety of sources, 
serving as a DOD-wide data repository, and in turn provides data to 
DOD decision support systems (see figure 1). 

Figure 1: Sources and Users of NLAC Data: 

[Refer to PDF for image: illustration] 

National-Level Ammunition Capability (NLAC): 

Sources: 
* Army ammunition databases (including Logistics Modernization Program 
[LMP]); 
* Air Force Combat Ammunition System; 
* Ordnance Information System–-Navy; 
* Ordnance Information System–-Marine Corps; 
* Requisitions; 
* In-Transit Assets; 
* Movement Planning; 
* Munitions Requirements; 
* Catalog Data; 
* Production. 

Users: 
* Global Combat Support System-–Joint (GCSS-J); 
* Defense Readiness Reporting System (DRRS); 
* Joint Operation Planning and Execution System (JOPES) and Global 
Command and Control System–-Joint (GCCS-J) (system is being tested). 

Source: GAO analysis of DOD information. 

Note: Service systems may also provide information directly to the DOD-
wide systems. 

[End of figure] 

As shown in the figure, NLAC receives data from the services' 
ammunition systems and other sources. It provides data to two DOD 
decision support systems--the Defense Readiness Reporting System and 
the Global Combat Support System-Joint, both of which are used by 
operational planners.[Footnote 12] Testing is underway with interfaces 
between NLAC and the Joint Operation Planning and Execution System and 
the Global Command and Control System-Joint.[Footnote 13] In its 
guidance, DOD has indicated a need for systems to provide logistics 
information visibility to support the joint warfighter.[Footnote 14] 

DOD's Inventory Reports and Its Annual Redistribution Process: 

DOD guidance directs the military services to stratify their 
conventional munitions inventory into several categories and prepare 
annual ammunition reports.[Footnote 15] The stratification separates 
the inventory into several categories to assess the ability of the 
inventory to meet stated requirements, ensure that inventories above 
requirements are kept only if warranted, and optimize the department's 
ammunition inventory. The categories are: 

* requirement-related munitions stock, including items needed for war 
reserve, training, and testing;[Footnote 16] 

* contingency retention munitions stock, which includes items that 
support requirements other than those already considered in the war 
reserve requirement and the training and testing requirements; 
[Footnote 17] 

* economic retention munitions stock, a category that refers to 
inventory that is more expensive to dispose of and reacquire in the 
future than to retain to meet future requirements; and: 

* potential reutilization and disposal stocks, meaning inventory that 
exceeds the total of the other categories. 

In fiscal year 2013, the Army listed about 3.8 billion ammunition 
items on its annual report; the Marine Corps listed about 1.5 billion, 
and the Air Force listed about 730 million.[Footnote 18] The services 
prepare their annual stratification reports prior to an annual 
conference called the Quad Services Cross-Leveling Review. The purpose 
of the conference is to identify ammunition that is excess to one 
service's needs (i.e., stock identified for potential reutilization or 
disposal) and can be transferred to another service that has 
identified a requirement for that same item.[Footnote 19] The Defense 
Security Cooperation Agency screens any inventory that is not 
redistributed at this annual meeting for suitability for foreign 
military sales. According to a 2010 Army Audit Agency report, the Army 
had significantly underestimated the funding requirements needed to 
perform its conventional ammunition demilitarization mission and, as a 
result, the stockpile has grown to over 557,000 tons, representing a 
$1 billion liability.[Footnote 20] 

GAO's Prior Work on Ammunition Inventory: 

GAO last reported on DOD's conventional ammunition management in 1999. 
[Footnote 21] At that time, we found that management of the Army's 
conventional ammunition program continued to be fragmented despite 
internal recognition of the problem and efforts to identify 
alternative solutions. We recommended that the Secretary of Defense 
direct the Secretary of the Army to establish a timeframe for 
implementing an Army-wide reorganization to integrate the management 
of conventional ammunition. DOD concurred, commenting that although 
the Army was working to resolve the inefficiencies we noted and to 
make the necessary organizational changes, the conventional ammunition 
program continued to be fragmented. DOD agreed that the three commands 
then dealing with various aspects of conventional ammunition needed to 
implement an Army-wide organizational restructuring to integrate the 
management of conventional ammunition. DOD subsequently took actions 
to implement GAO's recommendation. 

Military Services' Systems Have Some Limitations That Affect Their 
Ability to Facilitate Efficient Management of Conventional Ammunition: 

Military Services' Ammunition Information Systems Use Different 
Formats and Cannot Directly Exchange Data: 

The military services' ammunition systems cannot directly exchange 
data because they use different data exchange formats. Only the Army's 
LMP system uses the standard DOD format; the Navy, Marine Corps, and 
Air Force systems operate with formats that are obsolete and not 
compatible with the format used by LMP. 

In December 2003, the Under Secretary of Defense for Acquisition, 
Technology, and Logistics issued a memo to the military services and 
other components establishing policy for migration of logistics 
systems to the Defense Logistics Management Standards (DLMS)[Footnote 
22] and elimination of the use of the Military Standard Systems 
(MILS).[Footnote 23] MILS is based on standards and computer 
technology developed more than 50 years ago. According to DOD, MILS is 
functionally constraining, technologically obsolete, and unable to 
support the tracking of an item throughout its life cycle and across 
the entire supply chain using unique identifier codes.[Footnote 24] 
The Under Secretary of Defense for Acquisition, Technology, and 
Logistics reaffirmed this direction in 2013, calling for compliance by 
2019.[Footnote 25] In addition, DOD guidance indicates that DLMS, 
rather than MILS, shall be the basis for new, replacement, and major 
modifications to logistics business processes or systems.[Footnote 26] 

LMP uses DLMS for data exchange; however, the other services' 
ammunition systems continue to exchange data using MILS. Consequently, 
LMP cannot exchange data directly with the other services' ammunition 
systems. Rather, data must pass through a translation process at 
Defense Logistics Agency (DLA) Transaction Services. DLA's process 
translates data from one format to another format, enabling otherwise 
incompatible systems to exchange data. With respect to the services' 
ammunition systems, the translation process occurs for the exchange of 
ammunition data between LMP and Navy's and the Marine Corps' 
ammunition systems; however, according to Air Force Combat Ammunition 
System officials, the translation of data between LMP and the Air 
Force's system is not complete. Air Force Combat Ammunition System 
officials we interviewed stated that the ammunition data the Air Force 
system receives from LMP that DLA Transaction Services translates does 
not include lot and serial number information. Figure 2 provides a 
high-level overview of how data flow between service ammunition 
systems using the translation process. 

Figure 2: Data Transmission from LMP to Service Ammunition Systems: 

[Refer to PDF for image: illustration] 

Logistics Modernization Program (LMP): transmission to and from: 
Defense Logistics Agency (DLA) Transaction Services[A]: 
* Translation; 
* Defense Logistics Management Standards (DLMS) and Military Standard 
Systems (MILS) transactions; 
* No translation of data[B]. 

Defense Logistics Agency (DLA) Transaction Services: transmits to: 
Worldwide Ammunition Reporting System–-New Technology (WARS-NT)[C]; 
Army. 

Defense Logistics Agency (DLA) Transaction Services: transmission to 
and from: 
Ordnance Information System (OIS) Navy; 
Ordnance Information System–-Marine Corps (OIS-MC) Marine Corps; 
Combat Ammunition System (CAS) Air Force. 

Worldwide Ammunition Reporting System–-New Technology (WARS-NT)[C]; 
Army; transmits to: 
Combat Ammunition System (CAS) Air Force. 

Source: GAO analysis of DOD information. 

Notes: The figure represents data transmission from LMP to the 
services' ammunition systems; it does not represent all data 
transmissions, such as direct transmissions that occur between the 
Navy and Marine Corps ammunition systems. 

[A] DLA Transaction Services is the central point for all DLMS 
transactions. All DLMS transactions are routed to DLA Transaction 
Services, which provides several services and support, including 
translation and conversion services to enable interoperability between 
DLMS and MILS systems. 

[B] LMP sends data to Worldwide Ammunition Reporting System-New 
Technology (WARS-NT) through DLA Transaction Services, which performs 
no changes to the data, but routes it to WARS-NT for processing. 

[C] Air Force's CAS receives information on inventory balances from 
WARS-NT. 

[End of figure] 

The DLA Logistics Management Standards Office has recommended the 
services and other DOD components make DLMS implementation a top 
priority in order to achieve efficiencies consistent with the 
direction from the Under Secretary of Defense for Acquisition, 
Technology, and Logistics. According to DLA officials, any system 
operating under MILS is limiting its capabilities for being able to 
send and receive data from more advanced systems. MILS is restrictive 
in that it does not allow for more detailed information to be included 
when conducting specific transactions. As a result of the use of 
different data exchange formats, the services rely on e-mail for 
certain business transactions related to ammunition. For example, 
Navy, Marine Corps, and Air Force personnel have to type e-mails to 
submit requisitions for certain ammunition items to an Army Joint 
Munitions Command item manager for processing through LMP. These 
requisitions include items managed by the Single Manager that include 
specific instructions,[Footnote 27] as well as items the services are 
transferring to a different account for reutilization. For items that 
are not managed by the Single Manager and include specific 
instructions, Navy, Marine Corps, and Air Force personnel have to type 
e-mails for such requisitions directly to the depots for processing. 
Figure 3 provides an overview of the requisition processes that the 
services currently use when requesting ammunition items, whether or 
not managed by the Single Manager, that include specific instructions. 

Figure 3: Services' Ammunition Requisition Processes When Including 
Specific Instructions: 

[Refer to PDF for image: process illustration] 

Managed by Single Manager: 
Air Force; 
Marine Corps; 
Navy: 
E-mailed to: 
Joint Munitions Command (Manually uploaded); 
sent to: 
Logistics Modernization Program (LMP); 
sent to: 
Army Depot. 

Not managed by Single Manager: 
Air Force[A]; 
Marine Corps; 
Navy: 
E-mailed to: 
Army Depot (Manually uploaded); 
sent to: 
Logistics Modernization Program (LMP). 

Source: GAO analysis of DOD information. 

Notes: The figure does not capture all the requisition processes used 
by the services. The figure represents processes that the services use 
when requesting ammunition items from the Army, whether or not managed 
by the Single Manager, that include specific instructions. 

[A] The Air Force will also send requisitions directly through the 
Combat Ammunition Support (CAS) system and separately type an e-mail 
that includes the specific instructions to the depot for processing. 

[End of figure] 

According to Air Force Global Ammunition Control Point officials, 
using the e-mail procedure for requisitioning ammunition increases 
processing time by as much as a week and lacks visibility because 
there is no confirmation either that the requisition was received or 
that it was completed. In addition, because different data exchange 
standards are used, an Army Joint Munitions Command official we 
interviewed stated that instructions had to be issued for 
standardizing processes with the other services for requisitions that 
cannot be completed through the services' systems and LMP. 

Although an Under Secretary of Defense for Acquisition, Technology, 
and Logistics Business Strategy calls for transition to DLMS by 2019, 
Marine Corps officials stated that they have no plans at present to 
update their ammunition system to DLMS, and Naval Supply Systems 
Command officials told us that the Navy's plan to update its 
ammunition system to DLMS has not been funded. According to Air Force 
officials, the Air Force plans to update its ammunition system to the 
DLMS standard by 2017. The services have lagged in transitioning to 
DLMS for different reasons, one of them being that funding for this 
upgrade has not been a priority. According to Naval Supply Systems 
Command officials we interviewed, they submitted funding requests 
annually from 2010 through 2013 to update the Navy's ammunition system 
to DLMS; these requests were denied. Marine Corps officials stated 
they are waiting to update the Marine Corps ammunition system until 
after the Navy completes its DLMS update. However, the Navy and the 
Marine Corps made significant changes to their respective ammunition 
systems in 2004 and 2008 without updating to DLMS. According to Naval 
Supply Systems Command officials, the Navy incorporated wholesale 
ammunition operations to the current system in 2004. Similarly, Marine 
Corps officials we interviewed stated that the Marine Corps replaced 
its legacy system with the current system, Ordnance Information System-
Marine Corps, in October 2008. Without upgrades of the Navy, Marine 
Corps, and Air Force systems to DLMS, the services will continue to 
devote extra time and resources to ensure the efficient transfer of 
ammunition data between these systems and LMP. 

LMP Has Some Limitations That Can Affect the Accuracy and Completeness 
of Data on Ammunition Items Stored at Depots: 

LMP was not specifically designed to track ammunition and has some 
limitations in its ammunition-related functionality that can affect 
the accuracy and completeness of data for items stored at Army depots. 
If ammunition-related functionality in LMP is not corrected, any data 
problems that exist may be replicated because LMP provides information 
to other services' ammunition systems. To address ongoing data quality 
concerns, the Army and the other services have had to use manual 
processes to check and, when necessary, make corrections to ammunition 
data. 

DOD guidance on supply chain materiel management requires components 
to implement data administration policies and procedures aggressively 
in ways that provide clear, concise, consistent, unambiguous, 
accurate, up-to-date, and easily accessible data DOD-wide, thereby 
minimizing the cost and time required to transform, translate, or 
research different-appearing, but otherwise identical data.[Footnote 
28] Further, guidance jointly developed by DOD components involved in 
ammunition management indicates that the Single Manager Field 
Operating Activity will provide accurate and timely information to the 
military services on ammunition stored at Single Manager sites, 
[Footnote 29] such as the Army depots where conventional ammunition is 
stored. 

LMP, however, has some limitations in its ammunition-related 
functionality that can affect the quality of data that it maintains 
and provides to the other services. For example, we found the 
following: 

* LMP does not accurately calculate ammunition storage capacity at 
Army ammunition depots. Depot personnel need accurate information on 
the storage capacity that is available in buildings in order to plan 
for storing the ammunition that arrives at the depot. According to 
officials at Tooele Army Depot and Letterkenny Munitions Center, LMP 
overestimates the amount of space available for storage, and depot 
personnel must calculate storage capacity manually. Tooele officials 
said this process can often take up to a day and, in the end, is still 
only an approximation of available space. Joint Munitions Command 
assessments that were conducted in fiscal years 2012 or 2013 found 
that all the ammunition depots had problems with calculating storage 
capacity using LMP. The assessments we reviewed do not quantify the 
extent that the depots must expend resources to calculate storage 
capacity manually. However, seven of the eight assessments stated that 
LMP's limitation in calculating ammunition storage capacity could have 
a negative impact on mission performance; and six of eight assessments 
indicated that the issue could result in unnecessary costs. Army 
officials at the Joint Munitions Command told us they expect to 
improve this functionality in 2014. 

* LMP may not fully account for ammunition items that are shipped from 
Army depots to other locations. DOD guidance requires that the Single 
Manager is accountable for inventory items until the destination 
receives them.[Footnote 30] However, as documented in an assessment of 
the ammunition process by the Army that concluded in November 2012, 
LMP lacks receipt confirmation for shipped ammunition items. LMP drops 
the item from record once the item ships from the depot, but there is 
no confirmation of receipt back to LMP from the receiving location. 
Without receipts for shipped items, there is a gap in accountability 
and visibility of ammunition items. 

* LMP does not have a capability for generating certain performance 
information used for ammunition stockpile management. According to the 
fiscal year 2012 annual report by the Executive Director for 
Conventional Ammunition,[Footnote 31] LMP was unable to provide 
inventory accuracy rates, which is a key performance metric used to 
measure the Single Manager's ability to perform stockpile management. 
[Footnote 32] According to a briefing slide provided by Army Joint 
Munitions Command, inventory accuracy is the comparison between the 
physical inventory and the accountable record.[Footnote 33] Similarly, 
the Marine Corps noted in its response to a fiscal year 2012 Army 
survey that inventory accuracy had neither been verified through 
physical inventory nor reconciled within LMP.[Footnote 34] According 
to a Joint Munitions Command official, the Command has been sending 
LMP-generated inventory accuracy data to the ammunition depots for 
them to confirm and correct if necessary. As a result, officials 
expect the data will be used as the basis for the next Executive 
Director for Conventional Ammunition annual report on the Single 
Manager. Because the Executive Director for Conventional Ammunition 
has not released its report for fiscal year 2013, we were unable to 
determine whether inventory accuracy has been adequately addressed. 

Officials at the other military services also have cited various 
concerns about the reliability of LMP data. According to responses 
provided by Marine Corps officials, data that the Marine Corps receive 
from LMP sometimes fail to differentiate information about the 
ammunition's intended purpose and ownership details.[Footnote 35] In 
addition, Air Force officials we interviewed stated that LMP assigned 
a new lot number to an ammunition item that had undergone maintenance, 
but it still kept the old lot number on record--causing double 
counting. That problem, according to Air Force officials, required 
personnel to spend time determining which data were accurate. Further, 
ammunition officials with the Navy, Marine Corps, and Air Force stated 
that they spend time verifying the information sent from LMP to their 
respective systems. According to an Army planning document, there are 
several processes for manual review and corrections between LMP and 
the other services' ammunition systems. 

We found in November 2010 that Increment 1 was not designed 
specifically to track ammunition and contained numerous issues that 
affected ammunition-related functionality.[Footnote 36] In our most 
current review of LMP in November 2013,[Footnote 37] we found that an 
interface between LMP and a system commonly referred to as SmartChain 
[Footnote 38] had been developed to address specific functionality to 
ship, receive, inventory, and perform stock movements for ammunition 
items for the Army's Joint Munitions and Lethality Command. However, 
the Army has recognized other limitations associated with ammunition-
related data in LMP that also affect the other services' ammunition 
systems. 

Although the Army had planned several upgrades to LMP's ammunition-
related functionality in Increment 2, the Army has decided not to 
include a number of these upgrades. Increment 2 is a major enhancement 
to LMP and is scheduled for deployment in phases through fiscal year 
2016. Of five ammunition-related upgrades that had been planned for 
Increment 2, only one is now included (see table 1). LMP Product 
Management Office officials said that the cost and schedule for 
implementing Increment 2 had affected their ability to include all the 
planned ammunition-related upgrades. 

Table 1: Status of Ammunition-Related Upgrades That Were Initially 
Included in LMP Increment 2: 

Planned upgrade: Production Status and Other Services Reporting; 
Description and goal: Would integrate production tracking and 
reporting in LMP to enable real-time tracking of schedule fluctuations 
and reporting of production status to the customer base, which 
includes the other services; 
Status: No longer included. 

Planned upgrade: Supply Network Collaboration; 
Description and goal: Would allow the extended supply chain the 
ability to share data and interact with LMP through the Internet; 
Status: No longer Included. 

Planned upgrade: Joint Munitions and Lethality Command Automatic 
Identification Technology (AIT); 
Description and goal: Would enable LMP with an AIT integrated solution 
and eliminate the legacy system with AIT capabilities currently being 
used to manage several depot-level supply chain activities, such as 
transportation and planning and scheduling; 
Status: Included. 

Planned upgrade: Expanded Other Services' Capabilities; 
Description and goal: Would facilitate the corrections needed to 
provide accurate asset posture reporting and transaction reporting and 
reconciliation between LMP and services' ammunition systems and 
eliminate many of the manual review and corrections currently in place; 
Status: No longer included. 

Planned upgrade: Ammunition Budget and Pricing; 
Description and goal: Would provide additional functionality to 
further integrate budget and pricing planning process and perform end-
to-end business functions, such as the ability to price ammunition for 
Foreign Military Sales; 
Status: No longer included. 

Source: GAO analysis of Army data. 

Note: Data are from Army ammunition-related requirements for LMP 
Increment 2 and status updates on planned ammunition-related upgrades. 

[End of table] 

As shown in table 1, one of the upgrades that the Army is no longer 
including in Increment 2 is an upgrade to improve LMP's capability to 
provide accurate asset posture reporting and transaction reporting and 
reconciliation between LMP and services' ammunition systems. The 
upgrade, according to the Army, would eliminate many of the manual 
processes currently in place. Joint Munitions Command officials said 
some requirements originally associated with this upgrade have been or 
will be addressed outside of Increment 2.[Footnote 39] The Army, 
however, has not yet developed a comprehensive plan, with timeframes 
and costs, for addressing the limitations that exist in LMP ammunition-
related functionality, including those that were to be addressed by 
the planned upgrades in Increment 2. Such a plan could provide DOD 
reasonable assurance that its efforts to upgrade ammunition-related 
functionality in LMP are making progress. Further, without addressing 
these limitations, the Army and the services will continue to rely on 
manual processes to check and correct LMP ammunition-related data. 

NLAC Has Some Limitations in Providing Visibility of Conventional 
Ammunition: 

The Army's NLAC is a DOD-wide repository of ammunition data; however, 
it has some limitations in providing visibility of conventional 
ammunition and is not widely used outside of the Army. The Army does 
not have reasonable assurance that NLAC collects complete and accurate 
data from service ammunition systems. In addition to the challenges 
with LMP data discussed earlier in this report, NLAC also does not 
have certain checks and controls that could help ensure that data are 
accurately being transferred from source systems to NLAC. Another 
limitation to NLAC's ability to provide visibility of assets is that 
DOD has not determined whether NLAC should be designated as an 
authoritative source of ammunition data. 

As noted previously, DOD guidance on supply chain materiel management 
requires components to implement data administration policies and 
procedures aggressively in ways that provide clear, concise, 
consistent, unambiguous, accurate, up-to-date, and easily accessible 
data DOD-wide, to help minimize the cost and time required to 
transform, translate, or research different-appearing, but otherwise 
identical data.[Footnote 40] In addition, federal internal control 
standards state that information systems should have effective 
internal controls that include application controls, which are 
designed to help ensure completeness, accuracy, authorization, and 
validity of all transactions during application processing. Our prior 
work has shown that controls should be installed at an application's 
interfaces with other systems to ensure that all inputs are received 
and are valid and outputs are correct and properly distributed. An 
example of the recommended controls is computerized edit checks built 
into the system to review the format, existence, and reasonableness of 
data.[Footnote 41] 

NLAC was designed to be a repository for all services' ammunition data 
by aggregating and distributing information throughout DOD. NLAC 
collects data at both the wholesale and retail levels, including 
inventory information such as quantity, location, requirements, and 
production. Several times a day, the repository receives updated data 
that are maintained in a web-based application for users across DOD--
including headquarters, combatant commands, and ammunition supply 
points. NLAC data are available for use by service and joint component 
officials and, as noted earlier, feeds into the Defense Readiness and 
Reporting System and the Global Combat Support System-Joint. 

Although NLAC contains ammunition data from across DOD, NLAC is not 
widely used outside the Army. Information on NLAC provided by the Army 
shows that most users are from within that service. For example, NLAC 
is used as the data source for the Army's semiannual Total Army 
Ammunition Authorization and Allocation Conference[Footnote 42] and 
the Centralized Ammunition and Missile Management system.[Footnote 43] 
Figure 4 depicts NLAC's user base. 

Figure 4: NLAC Users: 

[Refer to PDF for image: pie-chart] 

746 National Level Ammunition Capability (NLAC) users accessed the 
database from January to March 2013: 

Army: 77% (575); 
Other[A]: 23% (171); 
* National Guard (80); 
* Contractor (60); 
* Combatant Command (12); 
* Navy (6); 
* Marine Corps (5); 
* Joint/OSD (4); 
* Air Force (3); 
* Department of Energy (1). 

Source: GAO analysis of Army data. 

[A] Other may contain Army users. 

[End of figure] 

In our discussions about NLAC, ammunition officials who we interviewed 
from the Joint Staff, Marine Corps, Air Force, and Navy regarded data 
from other ammunition systems to be more accurate and complete than 
the data in NLAC. Non-Army officials who used NLAC said they confirm 
information with other service systems or by contacting knowledgeable 
officials. For example, Joint Staff and Marine Corps ammunition 
officials stated that, rather than relying solely on NLAC, they 
preferred to take the extra step of phoning or e-mailing their 
counterparts in the other services to obtain information on specific 
items. 

NLAC does not have checks and controls that federal internal controls 
recommend to ensure that data from source systems are reliable. As a 
result, errors in the originating data also will appear in NLAC. In 
addition to being subject to inaccuracies from source systems, NLAC 
may not receive complete data transmissions from source systems into 
NLAC. For example, NLAC is not receiving all serial numbers for 
serialized items, even where these exist in LMP. Joint Munitions 
Command officials have submitted a request to NLAC for assistance to 
determine why the transmission from LMP to NLAC is not taking place, 
but the issue has not yet been addressed and officials have not 
received a timetable for resolution. Also, data available in NLAC on 
the services' ammunition data may differ from data found in the 
services' accountable records because of different business processes 
among the military services. For example, the Air Force--unlike the 
Army--accounts for ammunition items that have been shipped to another 
location by retaining the amount to be delivered at the originating 
location until receipt has been confirmed at the destination. As a 
result, one Air Force official observed that the Air Force's Combat 
Ammunition System will show higher quantities of ammunition items that 
have amounts designated for shipment than are shown in NLAC. 

NLAC program personnel have taken some steps to improve accuracy and 
to address errors and inconsistencies in data received from the 
services' systems. For example, according to program officials, they 
have monitored incoming data to ensure that updates occurred, such as 
whether the repository received the expected volume of information. 
Furthermore, they receive some data elements, such as the weight of 
the explosive component of the ammunition, directly from other sources 
even if these exist in LMP, because of known issues with LMP accuracy. 
They also conduct logic checks of incoming data; for example, they can 
detect and correct if a data field is supposed to contain an 
alphabetic character but the incoming file actually has a numeric 
character. However, they do not check whether the correct alphabetic 
characters appear. NLAC officials told us that users are their best 
source for detecting errors, particularly Army officials, as that 
service accounts for the preponderance of total users. 

NLAC is also limited in its ability to provide visibility of 
conventional ammunition because DOD has not determined whether NLAC 
should be designated as an authoritative source of ammunition data. 
According to DOD guidance, an authoritative data source is a 
recognized or official source of data that could have a designated 
mission statement to publish reliable and accurate data.[Footnote 44] 
NLAC was at one time envisioned as the visibility module of the Joint 
Ammunition Materiel Management System, but when that program was 
terminated, the Army took over the effort from its joint predecessor. 
Although NLAC is an outgrowth of a DOD effort, DOD has not designated 
an authoritative data source for providing asset visibility of the 
conventional ammunition inventory DOD-wide. By designating NLAC as an 
authoritative data source, DOD might be better able to provide 
visibility of conventional ammunition department-wide. 

Without steps to ensure the quality of the services' data that flow 
into NLAC, DOD officials could risk making decisions based on 
inaccurate and incomplete information on available inventory, or 
ammunition offices will have to devote extra staff and time to obtain 
accurate data on DOD-wide inventory. For example, military decision-
makers who use the Global Combat Support System-Joint[Footnote 45] may 
be unaware that the ammunition data in the system that came from NLAC 
could have errors. Also, NLAC program personnel told us that incorrect 
information could have logistics implications: for example, without 
correct weight information, shippers would not know how many trucks to 
order or how to best build pallets for ammunition transportation. 
Finally, some users may rely on data obtained from NLAC without 
knowing their provenance or capabilities. For example, the memorandum 
of agreement between the NLAC Program Management Office and the 
Defense Information Systems Agency Program Management Office for 
Global Combat Support System-Joint allows the latter to create 
mechanisms to share NLAC data with unanticipated but authorized third 
parties. In addition, we spoke to Navy officials who were unaware that 
NLAC provides Navy ammunition data to the Defense Readiness Reporting 
System. 

Services Have a Process for Collecting and Sharing Data on 
Conventional Ammunition, but the Army Does Not Report Information 
about All Available and Usable Items: 

The military services have a process for collecting and sharing data 
in annual reports on conventional ammunition levels and use these 
reports to identify inventory owned by one service that may be 
available to meet the requirements of another service. However, the 
Army's command that manages certain missiles has not contributed to 
these annual reports for the missile inventory, including any items 
that exceed the service's requirement-related munitions stock. 
Officials stated that they do not contribute to the annual report 
because the missile stockpile rarely has items to offer for 
redistribution. Also, the Army's annual report does not provide 
information about all available, usable ammunition items. 
Specifically, the Army's report does not include information from 
prior years about usable ammunition that was unclaimed by another 
service and stored for potential foreign military sales or slated for 
potential disposal. 

Services Have a Process for Collecting and Sharing Data in Annual 
Reports about Inventory of Conventional Ammunition: 

The military services have a process for collecting and sharing data 
on conventional ammunition information through the stratification 
reports that they prepare annually. They use these reports to identify 
inventory owned by one service that may be available to meet the 
requirements of another service. DOD Regulation 4140.1-R directs the 
military services to assess the ability of the ammunition inventory to 
meet stated requirements by stratifying their inventories into various 
categories and requires them to prepare an annual internal report that 
lists the current inventory level of all ammunition.[Footnote 46] The 
annual internal report divides the inventory into the categories of 
requirement-related munitions stock, economic retention munitions 
stock, contingency retention munitions stock, and potential 
reutilization and disposal stock. The regulation also directs the 
services to develop an external report identifying inventory in the 
long-supply categories of economic retention munitions stock, 
contingency retention munitions stock, and potential reutilization and 
disposal stock. The services are to use this report to identify 
potential opportunities for redistributing potential reutilization and 
disposal munitions stock, inventory that exceeds the requirements of 
an individual military service, but may not exceed the requirements of 
DOD. The regulation also directs the services to consider the economic 
retention and contingency retention stock as potentially available 
inventory for redistribution if another service has a shortage. 
[Footnote 47] 

In their reports on fiscal year 2012 inventory, the Army, the Marine 
Corps, and the Air Force reported approximately 6 billion ammunition 
items in the inventory, of which approximately 224 million items (3.7 
percent) were excess to the requirements of one service, categorized 
as potential reutilization and disposal stock.[Footnote 48] From 2009 
to 2013, this category of ammunition inventory fluctuated from 5.2 
percent to 28.4 percent of total inventory. Prior to the Quad Services 
Cross-Leveling Review, different organizations within each service may 
review drafts of the annual reports to verify that information from 
each ammunition system is accurate. The reports are then distributed 
to the other services. In addition, the Office of the Executive 
Director for Conventional Ammunition, which facilitates this process, 
compares the data in the inventory reports with data on planned 
procurements of ammunition. After the services share their annual 
reports on ammunition inventory, including which ammunition could be 
reutilized, service officials meet to discuss how they will 
redistribute ammunition that is available for any service's 
requirements. 

DOD guidance indicates that this redistribution process should serve 
to offset individual procurements by the services and enable disposal 
of only those assets that are excess to all DOD requirements.[Footnote 
49] For example, the Executive Director for Conventional Ammunition 
reported that DOD avoids an average of $70 million annually in 
procurement costs by using the redistribution process regarding each 
service's excess inventory.[Footnote 50] During the fiscal year 2012 
redistribution process, DOD transferred approximately 44 million 
items, of which approximately 32 million were small-caliber items such 
as ammunition for machine guns or pistols, 11 million were demolition 
materials such as detonation cords, fuses and pyrotechnic initiators, 
[Footnote 51] 1 million were ground defense items such as grenades 
used for riot control, and the remaining 2 million were a mixture of 
other various types of ammunition. 

Army's Aviation and Missile Command Does Not Contribute to Required 
Annual Report: 

The Navy, the Marine Corps, and the Air Force share information on the 
availability of missiles and missile support material[Footnote 52] 
that exceed their requirement-related munitions stock, but the Army's 
Aviation and Missile Command does not report annually about the same 
information. DOD Regulation 4140.1-R requires that the services 
include all conventional ammunition, including tactical missiles, in 
their annual report.[Footnote 53] The Logistics Center under the Army 
Aviation and Missile Command manages the inventory of certain missile 
items--including Stinger, Javelin, and Hellfire missiles--and the 
Joint Munitions Command manages all other ammunition items, including 
small rockets such as shoulder-launched ammunition. The Army's annual 
report does not include reference to the tactical missile inventory 
that is managed by the Aviation and Missile Command. According to Army 
officials, the Aviation and Missile Command does not contribute to the 
annual report on inventory because the missile stockpile rarely has 
items to offer for redistribution. The Navy, the Marine Corps, and the 
Air Force all include information in their annual reports on the 
various types of missiles that they manage. Some of the missiles that 
are included in their reports are the same kind of missiles that are 
managed by the Aviation and Missile Command's Logistics Center. 
According to Army officials, the Aviation and Missile Command does not 
contribute to the annual reporting or redistribution process, but the 
Army has engaged in an internal process that annually reviews the 
missile inventory separately from the annual ammunition reporting 
process. In the course of our review, an Army headquarters official 
indicated that the Army was planning to take steps to include 
information from the Aviation and Missile Command for future annual 
ammunition reports. However, the Army had not yet articulated a plan 
of action for making this change. If the Army and its missile command 
do not annually report any missiles, including missiles excess to the 
service's requirements, it risks other services spending additional 
funds to procure missiles that already are unused and usable in the 
Army's stockpile. Also, without such annual reporting, the information 
DOD obtains lacks full transparency about missiles that could be used 
to support some of the other services' requirements. Therefore, it 
will be important for the Army to ensure that the Aviation and Missile 
Command implement its direction in fiscal year 2014 and beyond. 

Army's Annual Reports Do Not Include Information on All Usable 
Ammunition: 

The Army's annual stratification report includes current ammunition 
inventory levels and does not include information from prior years 
about usable ammunition that was unclaimed by another service and 
stored for potential foreign military sales or slated for potential 
disposal. DOD Regulation 4140.1-R directs the military services to 
assess the ability of the ammunition inventory to meet stated 
requirements by stratifying inventory into categories.[Footnote 54] It 
also directs the preparation of annual reports that list the current 
inventory levels for ammunition items. The annual internal report 
divides the inventory into requirement-related, retention, and 
potential reutilization and disposal stocks. The regulation also 
directs the services to use the annual reporting process to identify 
potential opportunities for redistributing potential reutilization and 
disposal stocks, inventory that exceeded--was greater than--the 
requirements of an individual military service, but may not exceed the 
requirements of DOD. 

As the Single Manager, the Secretary of the Army is disposing of 
serviceable or unserviceable conventional ammunition that is obsolete--
inventory that is no longer needed due to changes in technology, laws, 
customs, or operations--or in excess to requirements of the 
department--inventory that has completed reutilization screening 
within DOD and is not required for the needs of any DOD activity. 
According to an Army financial statement in June 2013, the Army had 
about 39 percent of its total inventory (valued at about $16 billion) 
in a storage category for ammunition items that were excess to all the 
services' requirements in a prior year and could be disassembled or 
destroyed in the future. However, a service may decide in a subsequent 
year that it needs additional ammunition of some type and check with 
the Army for availability before starting a procurement or to meet an 
emergent need. Officials told us that since October 2012 the Army has 
reclaimed at least 44 missiles from the disposal stockpile to meet its 
needs--such as fulfilling a testing requirement. Also, in 2012, the 
Marine Corps reclaimed ammunition storage components to meet a service 
need. In another example, Navy officials told us that a functional 
ammunition component, called sonobuoys, was reclaimed from the 
disposal stockpile when a need arose for the ammunition component. 
[Footnote 55] 

The Army is not sharing information on all usable ammunition that 
previously was unclaimed by another service and stored as part of the 
disposal stockpile. This information is not routinely shared with all 
services in the annual reports on ammunition inventory because DOD 
guidance does not require reporting this type of inventory as part of 
the stratification process. Officials told us that prior to the annual 
redistribution meeting, the Office of the Executive Director for 
Conventional Ammunition reviews the stockpile of usable ammunition 
that was previously unclaimed by any other service and stored as part 
of the disposal stockpile. However, this information is not included 
in the annual reports and shared with the services as part of the 
redistribution process. Without guidance to require that the Army's 
annual reports or another report used as part of the redistribution 
process include all information about available and usable inventory--
comprehensive information from multiple years--there is risk that the 
services may budget for funds to procure new supplies of conventional 
ammunition to meet a requirement when the ammunition items already are 
available in the DOD inventory but categorized for demilitarization or 
disposal. 

Conclusions: 

DOD policy requires the highest possible degree of efficiency and 
effectiveness in wholesale conventional ammunition logistics functions 
for the inventory, but DOD's systems have some limitations that hamper 
the department's ability to manage this inventory efficiently. The use 
of outdated data exchange standards by Navy, Marine Corps, and Air 
Force ammunition systems makes it difficult for them to efficiently 
share data with LMP, the only system using the updated standards. In 
addition, while the Army has made progress in improving LMP data 
overall, ammunition-related functionality continues to have challenges 
that affect the accuracy and completeness of LMP ammunition data used 
by the services for ammunition management. The Army is aware of these 
challenges but has not developed a plan to address them. A 
comprehensive plan, with time frames and costs, for resolving 
limitations in LMP ammunition-related functionality could provide DOD 
reasonable assurance that its efforts to upgrade this functionality in 
LMP are making progress. Further, efforts to achieve DOD-wide 
visibility of ammunition assets are hampered because the existing data 
repository, NLAC, lacks some checks and controls that could improve 
the reliability of data from source systems. Moreover, DOD has not 
designated an authoritative source of data on conventional ammunition 
DOD-wide, whether NLAC or through some other means. By designating an 
authoritative source, DOD could have a means to provide better 
visibility of conventional ammunition department-wide. 

The services use the stratification and redistribution process to 
better optimize the department's ammunition inventory by collecting 
and sharing information on available inventory that could meet the 
requirement of another service. However, the Army does not provide 
information on missiles in the annual reports that it prepares as part 
of this process. Also, the Army does not share information on usable 
inventory in a storage category for ammunition items that were excess 
to all the services' requirements in a prior year and placed into 
storage in preparation for disassembly or disposal. Without such 
annual reporting, the information DOD obtains may lack full 
transparency about all available items and may miss opportunities to 
avoid procurement costs for certain usable items that may already be 
available in the Army's stockpile. 

Recommendations for Executive Action: 

We are making seven recommendations to improve the efficiency of DOD's 
systems for managing its conventional ammunition inventory and to 
improve data sharing among the services. 

To improve the efficiency of data exchanges between LMP and other 
service ammunition systems, we recommend that the Secretary of 
Defense, in coordination with the Under Secretary of Defense for 
Acquisition, Technology, and Logistics, take the following two actions: 

* Direct the Secretary of the Navy to (1) take steps to incorporate 
DLMS into the Ordnance Information System and (2) direct the 
Commandant of the Marine Corps to take similar steps with regard to 
the Ordnance Information System-Marine Corps. 

* Direct the Secretary of the Air Force to assess the feasibility of 
accelerating the 2017 target date for incorporating DLMS into the 
Combat Ammunition System and, if determined to be feasible, take 
appropriate implementation actions. 

To provide greater assurance that LMP is capable of maintaining 
accurate, timely, and more complete ammunition data in accordance with 
DOD supply chain materiel management and ammunition guidance, we 
recommend that the Secretary of Defense direct the Secretary of the 
Army to establish a plan, with timeframes and costs, for incorporating 
ammunition-related functionality into LMP, including functionality 
that is no longer being included in the planned ammunition-related 
upgrades for Increment 2. 

To improve DOD's ability to provide total asset visibility over 
conventional ammunition, we recommend that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology, and 
Logistics, in conjunction with the Secretaries of the Army, the Air 
Force, and the Navy, to take the following two actions: 

* Identify and implement internal controls, consistent with federal 
internal control standards, that will provide reasonable assurance 
that NLAC collects comprehensive, accurate data from other service 
ammunition systems. 

* Designate an authoritative source of data on conventional ammunition 
DOD-wide--whether NLAC or through some other means--and issue guidance 
to implement this decision. 

To enable the military services to make maximum use of ammunition in 
the inventory, we recommend that the Secretary of Defense take the 
following two actions: 

* Direct the Secretary of the Army to ensure that annual 
stratification reports on conventional ammunition include missiles 
managed by the Army Aviation and Missile Command. 

* Direct the Under Secretary of Defense for Acquisition, Technology, 
and Logistics to revise guidance to require the Secretary of the Army 
to include in its annual reports, or another report, as appropriate, 
information on all available ammunition for use during the 
redistribution process--including ammunition that in a previous year 
was unclaimed by another service and categorized for disposal. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report, DOD concurred with our 
seven recommendations and provided additional comments describing 
actions underway or planned to address them. DOD also provided 
technical comments, which we incorporated as appropriate. The full 
text of DOD's comments is reprinted in appendix III. 

With regard to the first recommendation, that the Navy and Marine 
Corps take steps to incorporate DLMS into their ammunition systems to 
improve the efficiency of data exchanges with the Army's LMP, DOD 
concurred and cited several examples of DOD guidance that underscore 
the importance of DLMS and use of the standard for logistics systems 
and data exchanges. Further, DOD stated that recent guidance related 
to materiel management directs DOD components to use standard 
logistics data exchanges. Taking actions to implement this guidance, 
as we recommended, would better position the Navy and Marine Corps 
ammunition systems to efficiently exchange data with LMP. 

With regard to the second recommendation, that the Air Force assess 
the feasibility of accelerating the 2017 target date for incorporating 
DLMS into the Combat Ammunition System, DOD concurred and stated that 
incorporation of DLMS is tied to overall development efforts planned 
for the system. While DOD noted that the DLMS capability cannot be 
incorporated into the Air Force's existing ammunition system 
independently, DOD stated that the Air Force expected to be able to 
incorporate DLMS by fiscal year 2017 with the possibility of earlier 
implementation based on contract performance. If fully implemented as 
planned, this action should help address the intent of the 
recommendation to ensure that the Air Force incorporates DLMS into the 
Combat Ammunition System on or before its target fiscal year 2017 
timeframe. 

With regard to the third recommendation, that the Army take steps to 
establish a plan, with timeframes and costs, for incorporating 
ammunition-related functionality into LMP, including functionality no 
longer included in the planned ammunition-related upgrades for 
Increment 2, DOD concurred and noted that the Army has taken a phased 
approach to LMP implementation. DOD stated that some additional 
ammunition-related functionality is scheduled for deployment as part 
of Increment 2 in fiscal year 2016, and additional functionality will 
be evaluated for potential inclusion in follow-on increments of LMP. 
Given the schedule delays in incorporating needed ammunition-related 
functionality in LMP, as discussed in the report, we continue to 
believe that the Army should establish a plan with timeframes and 
costs for incorporating this functionality. Such a plan could provide 
DOD with reasonable assurance that the Army's efforts to upgrade 
ammunition-related functionality in LMP are making progress and, 
moreover, provide greater assurance that LMP is capable of maintaining 
accurate, timely, and more complete ammunition data in accordance with 
DOD supply chain materiel management and ammunition management 
guidance. 

With regard to the fourth recommendation, that DOD identify and 
implement internal controls, consistent with federal internal control 
standards, that will provide reasonable assurance that NLAC collects 
comprehensive, accurate data from other service ammunition systems, 
DOD concurred and stated that the Army updated the performance work 
statement for NLAC to include analyzing new data sources to identify 
improved system interfacing that will improve data accuracy, 
completeness, quality assurance, and auditability. If implemented as 
planned, this action should help to address the intent of the 
recommendation. 

With regard to the fifth recommendation, that DOD designate an 
authoritative source of data on conventional ammunition DOD-wide and 
issue guidance to implement this decision, DOD concurred and stated 
that it would assess the alternatives and designate the appropriate 
solution by the fourth quarter of fiscal year 2015. We are encouraged 
that DOD will seek to identify an authoritative source of data and 
reiterate that, at that time, DOD should also issue implementing 
guidance. 

With regard to the sixth recommendation, that annual stratification 
reports on conventional ammunition include missiles managed by the 
Army Aviation and Missile Command, DOD concurred and stated that it 
would clarify direction in its recently issued guidance to ensure that 
this happens. DOD added that the Army had already begun to provide 
missile information during the 2014 stratification meeting. We are 
encouraged by this step and believe that DOD will benefit by ensuring 
that the Army continues to provide this information. 

With regard to the seventh recommendation, that the Under Secretary of 
Defense for Acquisition, Technology, and Logistics revise guidance to 
require the Secretary of the Army to include information on all 
available ammunition for use during the redistribution process, 
including ammunition that in a previous year was unclaimed by another 
service and categorized for disposal, DOD concurred and noted that the 
Under Secretary would clarify direction in recently issued guidance 
that the military departments will use information on all available 
ammunition categorized for disposal. This is a positive step, but DOD 
does not state in its response how such information will be reported 
for use in the redistribution process. Requiring the Army to include 
this information as part of the redistribution process, as we 
recommended, would increase transparency about all available items and 
potentially help DOD avoid procurement costs for certain usable items 
that may already be available in the Army's stockpile. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to appropriate 
congressional committees; the Secretary of Defense; the Secretaries of 
the Army, the Navy, and the Air Force; and the Commandant of the 
Marine Corps. In addition, the report will be available at no charge 
on the GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-5257 or merrittz@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff members who made key 
contributions to this report are listed in appendix IV. 

Sincerely yours, 

Signed by: 

Zina D. Merritt: 
Director: 
Defense Capabilities and Management: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine the extent to which Department of Defense (DOD) systems 
facilitate efficient management of the conventional ammunition 
inventory, we reviewed DOD guidance on exchanging data, developing 
data systems, and maintaining department-wide ammunition visibility. 
We reviewed relevant documents, including memos from the Under 
Secretary of Defense for Acquisition, Technology, and Logistics and 
Defense Logistics Agency; technical guidance from the Defense 
Logistics Agency Management Standards Office (particularly Defense 
Logistics Manual 4000.25, Defense Logistics Management System); and 
discussed with Air Force officials their plans for updating their 
ammunition system. At the service level, we identified the services' 
systems, particularly the Logistics Modernization Program (LMP), which 
is the Army's system of record for Army wholesale inventory and 
wholesale ammunition belonging to all of the services; we reviewed 
documents pertaining to capabilities and limitations of these systems. 
In the case of LMP, these documents included: change requests 
indicating systems adjustments to improve ammunition management 
capabilities; requirements, business case, and cost estimate for the 
update known as Increment 2; and records of inspections at each of the 
eight depots at which the Army's Joint Munitions Command stores 
ammunition for the Army and the other services. At the DOD-wide level, 
we reviewed minutes of Joint Ordnance Commanders' Group (JOCG) 
meetings. The JOCG is an inter-service forum, among whose goals is to 
identify, implement or recommend for implementation joint 
opportunities to reduce cost, increase effectiveness and ensure 
interoperability and/or interchangeability of munitions systems. 

Also, we interviewed DOD officials responsible for inventory records 
at each of the services' ammunition system program offices to discuss 
the capabilities and limitations of each of the services' ammunition 
inventory systems of record. These included officials from the Army, 
Navy, and Air Force headquarters logistics staffs-Army Deputy Chief of 
Staff for Logistics (G-4); Deputy Chief of Naval Operations for 
Material Readiness and Logistics (N-4); and Deputy Chief of Staff of 
the Air Force for Logistics, Installations, and Mission Support (A-4/ 
7). For the Army, we interviewed officials from the Army Materiel 
Command and two of its subordinate commands (Joint Munitions Command 
and Aviation and Missile Command) that have responsibilities for 
ammunition management. We also interviewed officials from the 
services' ammunition systems program offices, including the Army's LMP 
Product Management Office; the Naval Supply Systems Command and 
Ordnance Information System program office in Mechanicsburg, 
Pennsylvania; the Marine Corps Systems Command, Program Manager - 
Ammunition in Stafford, Virginia; the Air Force Global Ammunition 
Control Point at Hill Air Force Base, Utah; and the Air Force Combat 
Ammunition System program office. In order to better understand 
inventory management challenges at the depot level, we met with 
logistics specialists at two depots: Tooele Army Depot, Utah; and 
Letterkenny Ammunition Center, Pennsylvania. We selected these depots 
primarily based on their proximity to other ammunition management 
locations. 

We reviewed National Level Ammunition Capability (NLAC) documents, 
including performance work statements and requirements documents, 
usage statistics, and interface testing results; and reviewed 
memorandums of agreement and interface documents to assess how the 
services and NLAC exchange data. We obtained access to NLAC, and 
developed and executed queries to compare whether its data were 
consistent with Army and Air Force source data. Because this report 
focused on wholesale ammunition stocks, we did not gather information 
about all systems that provide information to NLAC. For example, we 
did not attempt to study the extent to which systems containing 
information about retail or in-transit ammunition stocks are complete 
and accurate. We conducted telephone interviews with NLAC program 
management officials at Army Materiel Command headquarters in 
Huntsville, Alabama and Joint Munitions Command headquarters in Rock 
Island, Illinois, and met with NLAC contractor personnel in 
Chambersburg, Pennsylvania. To learn more about the interface between 
NLAC and the Global Combat Support System-Joint, we also reviewed the 
memorandum of agreement between the Program Management Offices for 
those systems and interviewed an official from the Defense Information 
Systems Agency, which oversees that system. 

To determine the extent to which the military services collect and 
share inventory data to help them meet their stated requirements, we 
reviewed policies, procedures, and other guidance, as well as reports 
related to conventional ammunition reporting requirements for the 
services, including DOD Regulation 4140.1-R and the Joint Conventional 
Ammunition Policies and Procedures. We examined DOD Regulation 4140.1-
R to gain an understanding of the responsibility of the services to 
report inventory levels for items in long-supply retention categories 
to the other services. We examined the Joint Conventional Ammunition 
Policies and Procedures to gain an understanding of the responsibility 
of the Office of the Executive Director for Conventional Ammunition 
and its role in the annual redistribution process. 

Also, we obtained annual stratification reports--DOD's term for each 
service's list of items in the current inventory--from the Army, Navy, 
Marine Corps, and Air Force.[Footnote 56] These reports list items in 
the current inventory (as of the date of the report) and display how 
much meets or exceeds service requirements. We reviewed these reports 
to gain an understanding of the size and scale of the inventory and to 
determine the percentage of items in each category for fiscal years 
2009 through 2013.[Footnote 57] We interviewed officials knowledgeable 
about the annual ammunition report process and determined that the 
information included in those reports was sufficiently reliable for 
the purposes of our report. Also, we attended the March 2013 annual 
meeting at Picatinny Arsenal, New Jersey, at which service 
representatives met to discuss these reports and redistribute 
ammunition excess to service needs to help other services to meet 
their requirements. We obtained and reviewed the records of results 
from the redistribution meeting for fiscal years 2009 through 2013. We 
discussed the process for collecting, reviewing and categorizing the 
inventory data with officials responsible for compiling these reports. 
We also met with officials from Army Materiel Command's Office of the 
Executive Director for Conventional Ammunition to understand its 
processes for preparing for the redistribution meeting and for 
reporting on the results of the meeting. 

We circulated a standard set of questions to each of the services and 
analyzed the results, and determined that the information was 
sufficiently reliable for the purposes for which we used it. That is, 
we determined that the services have established processes for 
collecting and reporting data into their own systems and for receiving 
information about stocks that are stored at Army depots. We did not 
attempt to verify figures about quantities, locations, or other 
attributes of the data. The standard set of questions we circulated to 
the services asks detailed and technical questions about the systems. 
For example, for system architecture we asked how and in what format 
does the Army's LMP send data to the other services' ammunition 
systems. Similarly, we asked how and in what format do the services' 
systems send ammunition data to NLAC. We also asked about data quality 
controls and limitations and the services' perception of LMP and 
NLAC's data quality and limitations. We collected responses from each 
of the services regarding their ammunition systems and conducted 
interviews to gain further clarification on their responses. 

We conducted this performance audit from December 2012 to March 2014 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Single Manager for Conventional Ammunition Organization: 

[Refer to PDF for image: illustration] 

Top level: 
Secretary of the Army; 
Single Manager for Conventional Ammunition (SMCA)[D]; 
* Under Secretary of Defense for Acquisition, Technology, and 
Logistics: 
- policy; 
- guidance; 
- appraisal. 

Second level, reporting to Secretary of the Army: 

Office of the Secretary of the Army: 
* Assistant Secretary for Acquisition, Logistics, and Technology; SMCA 
policy lead[D]; 
- Program Executive Offices (PEO); 
-- PEO, Ammunition[B]: SMCA Executor; Co-chairman, Joint Ordnance 
Commanders' Group.[D] 

Chief of Staff Army: 
* Army Commands: 
- Army Materiel Command (AMC): Commanding General[D]; 
- Deputy Commanding General: Executive Director for Conventional 
Ammunition[A][D]; 
* Army Staff: 
- Deputy Chiefs of Staff: 
- G-4 Logistics: Proponent, National Level Ammunition Capability[E]. 

Third level, reporting to Army Commands: 
* Executive Director for Conventional Ammunition staff (also reports 
to PEO, Ammunition); 
* Aviation and Missile Life Cycle Management Command; 
* Joint Munitions and Lethality Life Cycle Management Command[C]; 
* Joint Munitions Command[B]; SMCA Field Operating Activity: Co-
chairman, Joint Ordnance Commanders' Group[D]; 
* Research, Development, and Engineering Command. 

Source: GAO analysis of DOD information. 

Notes: 

This chart depicts the roles of various entities with respect to 
conventional ammunition. The connecting lines do not necessarily 
represent the complete administrative, operational, or reporting 
relationships for all purposes and functions. 

[A] The Deputy Commanding General of AMC receives support for the role 
of Executive Director for Conventional Ammunition by a joint-staffed 
office of senior service military and civilian ammunition management 
specialists assigned to PEO Ammunition who report directly to the 
Executive Director. 

[B] Although the Joint Ordnance Commanders Group Charter identifies 
the Commander of the Joint Munitions Command as chair, the Joint 
Ordnance Commanders Group's Annual Report for 2012 was signed by Joint 
Munitions Command and PEO Ammunition as co-chairmen. 

[C] The Joint Munitions and Lethality Life-Cycle Management Command 
brings together the resources and expertise of three organizations: 
PEO Ammunition, Joint Munitions Command, and the Armament Research, 
Development, and Engineering Center. 

[D] Single Manager for Conventional Ammunition and designees. 

[E] Affiliated with National Level Ammunition Capability. 

[End of figure] 

[End of section] 

Appendix III: Comments from the Department of Defense: 

Assistant Secretary of Defense: 
Logistics and Materiel Readiness: 
3500 Defense Pentagon: 
Washington, DC 20301-3500: 

March 25, 2014: 

Ms. Zina D. Merritt: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Ms. Merritt: 

This is the Department of Defense (DoD) response to the Government 
Accountability Office (GAO) Draft Report, GAO-14-182, "Defense 
Logistics: Actions Needed to Improve Department-Wide Management of 
Conventional Ammunition Inventory" dated February 26, 2014 (GAO Code 
351778). Detailed comments on the report recommendations are enclosed. 

Sincerely, 

Signed by: 

Paul Peters: 
Acting: 

Enclosure: As stated. 

GAO Draft Report Dated February 26, 2014: 
GAO-14-182 (GAO Code 351778): 

"Defense Logistics: Actions Needed to Improve Department-Wide 
Management of Conventional Ammunition Inventory" 

Department Of Defense Comments On The GAO Recommendations: 

Recommendation 1: The GAO recommends that the Secretary of Defense, in
coordination with the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, direct the Secretary of the Navy to (1) 
take steps to incorporate DLMS into the Ordnance Information System 
and (2) direct the Commandant of the Marine Corps to take similar steps
with regard to the Ordnance Information System - Marine Corps. 

DoD Response: Concur. Direction is provided in DoD policy and the 
Acquisition and Logistics Functional Strategy. DoD Manual (DoOM) 
4140.01 , Volume 8, dated Feb 10, 2014, directs DoD Components to "Use 
standard logistics data exchanges, as noted in the DLMS procedures to 
implement DoD materiel management policy and the interfaces among the
functional areas of supply, transportation, contract administration, 
pipeline measurement, physical inventory control and finance." DoD 
Instruction 4140.01 , Page 14, para 8 c. states "Standard logistics 
data exchanges under the defense logistics management systems (DLMS)
shall be used to implement DoD materiel management policy and the 
interfaces among the functional areas of supply, transportation, 
acquisition (contract administration), maintenance, and finance." DoD 
Directive 8190.02, para 4.3, states "It is DoD policy to use the DLMS 
as a process improvement enabler in new, replacement, and legacy 
logistics business systems as a part of the DoD Component ongoing and 
planned modernization programs." In addition, the Department's 
Acquisition and Logistics Functional Strategy, dated February 2013, 
identifies DLMS as an enterprise standard and sets the target for DLMS 
compliance by 2019. 

Recommendation 2: The GAO recommends that the Secretary of Defense, in
coordination with the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, direct the Secretary of the Air Force to 
assess the feasibility of accelerating the 2017 target date for 
incorporating DLMS into the Combat Ammunition System and, if 
determined to be feasible, take appropriate implementation actions. 

DoD Response: Concur. Incorporation of DLMS capability into the Combat 
Ammunition System (CAS) is tied to the base performance period of the 
CAS development effort. It, along with necessary Financial Improvement 
and Audit Readiness system changes, is expected to be delivered in 
FY17 but may be implemented earlier based on contract performance. DLMS
capability cannot be incorporated into the existing CAS structure 
independently. 

Recommendation 3: The GAO recommends that the Secretary of Defense 
direct the Secretary of the Army to establish a plan, with timeframes 
and costs, for incorporating ammunition-related functionality into 
LMP, including functionality that is no longer being included in the 
planned ammunition-related upgrades for Increment 2. 

DoD Response: Concur. Army/AMC has taken a phased approach to LMP 
implementation. It was recognized early on that not all desired 
capability would be available in the initial fielding. Additional 
ammunition functionality is scheduled for deployment as part of LMP 
increment 2 wave 3. Wave 3 full deployment is scheduled for FYI6. 
Additional functionality not in increment 2 will be evaluated for 
follow on increments. All proposals for incorporation of functionality 
undergo rigorous analysis to ensure opportunities for business process 
engineering are identified. 

Recommendation 4: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology, and 
Logistics, in conjunction with the Secretaries of the Army, the Air 
Force, and the Navy, identify and implement internal controls, 
consistent with federal internal control standards, that will provide 
reasonable assurance that NLAC collects comprehensive, accurate data 
from other service ammunition systems. 

DoD Response: Concur. The Army updated the Performance Work Statement 
for National Level Ammunition Capability (NLAC) to include analyzing 
new data sources (systems) to identify improved system interfacing 
that will improve data accuracy, completeness, quality assurance and 
auditability. 

Recommendation 5: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology, and 
Logistics, in conjunction with the Secretaries of the Army, the Air 
Force, and the Navy, designate an authoritative source of data on 
conventional ammunition DOD-wide--whether NLAC or through some other 
means--and issue guidance to implement this decision. 

DoD Response: Concur. An authoritative source of data DOD-wide is 
desired. The Department will assess the alternatives and designate the 
appropriate solution by the 4th quarter of Fiscal Year 15. 

Recommendation 6: The GAO recommends that the Secretary of Defense 
direct the Secretary of the Army to ensure that annual stratification 
reports on conventional ammunition include missiles managed by the 
Army Aviation and Missile Command. 

DoD Response: Concur. USD (AT&L) will clarify direction in DoDM 
4140.01 , Volume 10 to ensure that annual stratification reports on 
conventional ammunition include missiles managed by the Army Aviation 
and Missile Command. Starting with the Mar 14 Annual Stratification
Meeting, Army is providing missile information for the cross 
stratification process. 

Recommendation 7: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology, and 
Logistics to revise guidance to require the Secretary of the Army to 
include in its annual reports, or another report, as appropriate, 
information on all available ammunition for use during the 
redistribution process--including ammunition that in a previous year 
was unclaimed by another service and categorized for disposal. 

DoD Response: Concur. USD (AT&L) will clarify direction in DoDM 
4140.01, Volume 10 that the Military Departments will use information 
on all available ammunition categorized for disposal. Although the 
Military Departments do not have visibility within their own systems,
they all have visibility into the Army system that tracks disposal, 
and access to this information has not been an issue in the cross 
stratification process. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Zina D. Merritt, (202) 512-5257 or merrittz@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, the following individuals made 
contributions to this report: Thomas W. Gosling, Assistant Director; 
Darreisha M. Bates; Richard D. Brown; Rebecca Guerrero; Sally Newman; 
Richard Powelson; Michael Shaughnessy; Michael Silver; and Amie Steele. 

[End of section] 

Footnotes: 

[1] DOD defines conventional ammunition as an end item, complete 
round, or materiel component charged with explosives, propellants, 
pyrotechnics, or initiating composition for use in connection with 
defense or offense (including demolitions), as well as ammunition used 
for training, ceremonial, or nonoperational purposes. This includes 
inert devices that replicate live ammunition, commonly referred to as 
dummy ammunition, which contain no explosive materials. Department of 
Defense, Single Manager for Conventional Ammunition (SMCA), Directive 
5160.65 (Washington, D.C.: Aug. 1, 2008). Conventional ammunition does 
not include nuclear and special weapons. 

[2] See id., para. 4. 

[3] The Army refers to LMP as an enterprise resource planning system, 
which is an automated information system using commercial off-the-
shelf software and consisting of multiple, integrated functional 
modules that perform a variety of business-related tasks such as 
accounting, inventory forecasting, purchasing, management, and 
distribution; and scheduling work. 

[4] In the DOD Supply Chain Materiel Management Regulation, DOD 
defined total asset visibility as the capability to provide timely and 
accurate information on the location, movement, status, and identity 
of units, personnel, equipment, and supplies. According to the 
definition, it also included the capability to act on that information 
to improve the overall performance of DOD logistics practices. 
Department of Defense, DOD Supply Chain Materiel Management 
Regulation, Regulation 4140.1-R, para. AP1.1.154 (May 23, 2003). DOD 
cancelled and reissued DOD Regulation 4140.1-R as a multivolume manual 
in February 2014; the revised manual does not contain a definition of 
total asset visibility. For the purposes of this report, we refer to 
total asset visibility as access to complete and accurate information 
on items wherever they are in the DOD supply system. 

[5] See id., para. C9.3. DOD cancelled and reissued DOD Regulation 
4140.1-R as a revised multi-volume manual, DOD Manual 4140.01, DOD 
Supply Chain Materiel Management Procedures in February 2014, while 
this report was in the final stages of drafting. Although the 
stratification and reporting procedures contained in two volumes of 
that manual are generally consistent with those in DOD Regulation 
4140.1-R, we did not assess the changes resulting from the new 
issuance. 

[6] Ammunition that is retained as part of the economic retention 
munitions stock is inventory that is more expensive to dispose of and 
reacquire in the future than to retain to meet future requirements. 

[7] The Marine Corps did not have a 2009 stratification report. 

[8] See generally Department of Defense, Single Manager for 
Conventional Ammunition (SMCA), Directive 5160.65 (Aug. 1, 2008). 
Department of Defense, Single Manager for Conventional Ammunition 
(SMCA): Responsibilities of the SMCA, the Military Services, and 
United States Special Operations Command (USSOCOM), Instruction 
5160.68 (Washington, D.C.: Dec. 29, 2008). 

[9] The military services separately manage some types of conventional 
ammunition, such as guided rockets and missiles, naval mines, and 
torpedoes. Such items are often unique to one service. 

[10] Wholesale generally refers to the highest level of organized DOD 
supply, maintained for resupplying the retail levels of supply. Retail 
generally refers to the level of inventory below wholesale, either at 
the consumer level or at the intermediate level. 

[11] Department of Defense Directive 5160.65, encl., para. 1. 

[12] DRRS measures and reports on the readiness of military forces and 
their supporting infrastructure. GCSS-J is the capstone joint 
logistics mission application enabling the Global Combat Support 
System strategy of providing unimpeded access to information 
regardless of source and fusing information from disparate sources 
into a cohesive and common operational picture. 

[13] JOPES provides data for the time-phased, force-deployment data 
system that guides movements of troops, supplies, and equipment in 
support of regional and functional operations plans. GCCS-J combines 
selected command and control capabilities into a comprehensive, 
interoperable system by exchanging imagery, intelligence, status of 
forces, and planning information. 

[14] Department of Defense, Chairman of the Joint Chiefs of Staff, 
Global Combat Support Family of Systems Requirements Management and 
Governance Structure, Instruction 6723.01B (July 31, 2009; current as 
of Sept. 18, 2013). 

[15] See Department of Defense Regulation 4140.1-R, para C9.3 (May 23, 
2003). As noted above, DOD cancelled and reissued DOD Regulation 
4140.1-R as a multivolume DOD Manual in February 2014, while this 
report was in the final stages of drafting. See Department of Defense, 
DOD Supply Chain Materiel Management Procedures, Manual 4140.01 (Feb. 
10, 2014). Although the stratification and reporting procedures 
contained in two volumes of that Manual are generally consistent with 
those in DOD Regulation 4140.1-R, we did not assess the changes 
resulting from the new issuance in detail. 

[16] The requirement-related munitions stock also accounts for 
procurement lead time and other military service inventory management 
considerations. 

[17] The contingency retention munitions stock is the inventory 
quantity above the requirement-related munitions stock, retained to 
support requirements other than those included in that stock. It 
includes assets set aside in special war reserve stock for allies, 
unpredictable homeland defense or counternarcotics missions, 
unpredictable weapon system tests, demonstrations, or assets being 
retained until suitable replacement weapon systems arrive. See 
Department of Defense, Regulation 4140.1-R, para. C.9.3.2.1.1.3 (May 
23, 2003). 

[18] Specific information pertaining to the active Navy inventory is 
classified and is not included in this GAO report. Information on 
ammunition items that were available for redistribution is not 
classified. 

[19] Ammunition in retention categories may be available for 
redistribution as well. DOD guidance directs the services to consider 
all stock in the economic retention munitions stock, contingency 
retention munitions stock, and potential reutilization and disposal 
stock categories as potentially available for redistribution if other 
services have shortages in their requirement-related munitions stock. 
The owning military service shall decide on the final availability of 
items in the retention categories after assessing the acceptability of 
risk associated with drawdown of the stockpile. See Department of 
Defense Regulation 4140.1-R, para. C9.3.3.2.2 (May 23, 2003). 

[20] U.S. Army Audit Agency, Funding Requirements for the Conventional 
Ammunition Demilitarization Program, Audit Report No. A-2010-0134-FFE 
(Alexandria, Va. July 16, 2010). 

[21] GAO, Defense Management: Army Could Achieve Efficiencies by 
Consolidating Ammunition Management, [hyperlink, 
http://www.gao.gov/products/GAO/NSIAD-99-230] (Washington, D.C.: Sept. 
30, 1999). 

[22] DLMS is a broad base of business rules including uniform 
policies, procedures, time standards, transactions, and data 
management designed to meet DOD's requirements for total logistics 
support. DLMS is founded upon American National Standards Institute 
Accredited Standards Committee X12 electronic data interchange 
standards. 

[23] The MILS/Defense Logistics Standard Systems was established in 
1962 and incorporated the computer technologies available at the time 
to provide procedures for communicating requirements, moving material, 
and performing other tasks associated with DOD's logistics system. 

[24] Department of Defense, Under Secretary of Defense for 
Acquisition, Technology, and Logistics, "Migration to the Defense 
Logistics Management Standards (DLMS) and Elimination of the Military 
Standard Systems (MILS)," memorandum (Washington, D.C.: Dec. 22, 2003). 

[25] Under Secretary of Defense for Acquisition, Technology, and 
Logistics, Acquisition & Logistics Functional Business Strategy 
(Washington, D.C.: February 2013). 

[26] Department of Defense, Regulation 4140.1-R, para. C8.6.1.1.6 (May 
23, 2003). As previously noted, DOD cancelled and reissued DOD 
Regulation 4140.1-R in February 2014 as DOD Manual 4140.01. Because 
the revised guidance was issued while this report was in the final 
drafting stages, we did not assess the changes in detail. However, the 
reissued guidance carries forward the requirement to employ DLMS as 
the basis for new, replacement, and major modifications to logistics 
business processes and systems. See DOD Manual 4140.01, Volume 8, DOD 
Supply Chain Materiel Management Procedures: Materiel Data Management 
and Exchange, encl. 3, para. 2.b(5)(c) (Feb. 10, 2014). 

[27] For the purposes of this report, we use the term specific 
instructions when referring to what DOD calls exception data. 
According to a Joint Munitions Command official, specific instructions 
can include, for example, information about what particular lot number 
of ammunition should be pulled to fill the request. 

[28] See Department of Defense, Regulation 4140.1-R, para.C8.6.2.1 
(May 23, 2003). As previously noted, DOD cancelled and reissued DOD 
Regulation 4140.1-R in February 2014 as DOD Manual 4140.01. Because 
the revised guidance was issued while this report was in the final 
drafting stages, we did not assess the changes in detail. However, the 
revised guidance provides that DOD components are to adopt the DOD Net-
Centric Data Strategy when implementing DLMS logistics data management 
policies, procedures, and standards. According to the guidance, these 
policies and procedures ensure clear, concise, consistent, 
unambiguous, accurate, up-to-date, and easily accessible data 
throughout the DOD. Further, DOD components are to manage and maintain 
all DLMS logistics data assets under configuration control to minimize 
the cost and time required to transform, translate, or research data 
assets that appear different but are otherwise identical, and 
conversely, data assets that appear to be identical or equivalent, but 
are in fact different. See DOD Manual 4140.01, vol. 8, encl. 3, paras. 
2.f(1)(c), (d) (Feb. 10, 2014). 

[29] See Joint Conventional Ammunition Policies and Procedures, Volume 
5, para. J5.3.1 (January 2006) (revised June 2013). 

[30] Specifically, Department of Defense, Instruction 5160.68, states 
that the Single Manager is relieved of custodial accountability on 
receipt by the military services/U.S. Special Operations Command--
accountable officer at the first retail point or consumer level. See 
DODI 5160.68, encl. 2, para. 4.a(1)(a). 

[31] Department of Defense, Office of the Executive Director for 
Conventional Ammunition, Annual Report Single Manager for Conventional 
Ammunition (2012). 

[32] According to the Single Manager charter, the Executive Director 
for Conventional Ammunition is responsible for assessing the overall 
mission of the Single Manager. The Executive Director's review is 
conducted on an annual basis and generally assesses the performance of 
the Single Manager for executing Acquisition Management, Production 
and Industrial Base Management, Stockpile Management, and Distribution 
Management. 

[33] According to an Army Program Executive Office Enterprise 
Information Systems briefing, LMP is the accountable record for 
wholesale ammunition assets. 

[34] The Single Manager conducts a yearly survey of its primary 
military customers to help assess its performance, customer 
expectations, and lessons. 

[35] Ownership codes are numeric codes used to identify which military 
service owns the item. Purpose codes are alphabetic codes used to 
identify the purpose for which the item is being held. 

[36] GAO, Defense Logistics: Additional Oversight and Reporting for 
the Army Logistics Modernization Program Are Needed, [hyperlink, 
http://www.gao.gov/products/GAO-11-139] (Washington, D.C.: Nov. 18, 
2010). 

[37] GAO, Defense Logistics: Army Should Track Financial Benefits 
Realized from its Logistics Modernization Program [hyperlink, 
http://www.gao.gov/products/GAO-14-51] (Washington, D.C.: Nov. 13, 
2013). 

[38] SmartChain is a software application that interfaces with LMP to 
provide an electronic method for performing standard depot operations 
such as receiving, moving, inventorying, and shipping ammunition. It 
tracks, automates, and integrates depot operations to manage and 
update inventory records. 

[39] For example, according to Joint Munitions Command officials, a 
change was made that enables LMP to more accurately transmit serial 
numbers associated with ammunition items. 

[40] See Department of Defense, Regulation 4140.1-R, para C8.6.2.1 
(May 23, 2003). See footnote 28 above regarding related guidance 
appearing in the recently issued DOD Manual 4140.01, which cancelled 
and reissued the guidance found in DOD Regulation 4140.1-R in February 
2014. 

[41] GAO, Internal Control: Standards for Internal Control in the 
Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO-AIMD-00-21.3.1], (Washington, D.C.: 
November 1999). See also Office of Management and Budget Circular A-
123, Management's Responsibility for Internal Control (Dec. 21, 2004). 

[42] NLAC, rather than LMP, provides data to the Total Army Ammunition 
Authorization and Allocation Conference for the Army. The conference 
uses data about retail (unit-level) ammunition, as well as 
transportation and Total Army Management Information System data, to 
allocate ammunition for upcoming Army training needs. Since LMP only 
contains wholesale data, it lacks the appropriate management tools to 
facilitate the conference. 

[43] Centralized Ammunition and Missile Management is an Army process 
whereby shortages are identified and requisitions to fill them are 
developed, sourced, and tracked. 

[44] An authoritative data source is a recognized or official data 
production source with a designated mission statement or 
source/product to publish reliable and accurate data for subsequent 
use by customers. An authoritative data source may be the functional 
combination of multiple, separate data sources. Department of Defense, 
Unique Identification (UID) Standards for a Net-Centric Department of 
Defense, Directive 8320.03, encl. 2, para. E2.2 (Mar. 23, 2007). 

[45] The Global Combat Support System--Joint is the capstone joint 
logistics mission application enabling the Global Combat Support 
System strategy of providing unimpeded access to information 
regardless of source and fusing information from disparate sources 
into a cohesive and common operational picture. 

[46] See Department of Defense, Regulation 4140.1-R, para. C9.3 (May 
23, 2003). The services are required to produce three annual reports 
about the inventory: an internal report, an external report to use for 
cross-leveling, and a summary-level munitions stratification report to 
provide to the Assistant Secretary of Defense for Logistics and 
Materiel Readiness. As previously noted, DOD cancelled and reissued 
DOD Regulation 4140.1-R as a multivolume manual while this report was 
in the final stages of drafting. We did not assess in detail changes 
resulting from the revision. 

[47] The owning military service decides the final availability of the 
economic retention and contingency retention munitions stock after 
assessing the acceptability of risk associated with drawdown of the 
stockpile. 

[48] As noted previously, specific information pertaining to the 
active Navy inventory is classified and is not included in this GAO 
report. Information on ammunition items that were available for 
redistribution is not classified. 

[49] See Department of Defense, Regulation 4140.1-R, para. C9.3.1.1.2 
(May 23, 2003). After the ammunition is screened by the military 
services, it is then considered for trade to other government agencies 
or for foreign military sales. 

[50] We did not independently verify these estimates. 

[51] Pyrotechnics are compounds of chemicals that produce a smoke or 
brilliant light in burning and are used for signaling or lighting up 
the night. Initiators are the device used to set off the combustion of 
low explosives or to detonate high explosives. 

[52] Missile support material refers to component parts used to fully 
assemble the missile for firing--such as fins or wings. 

[53] The regulation requires the military services to apply the 
requirements and procedures related to ammunition stratification, 
reporting, and cross-leveling to all conventional ammunition, 
including ammunition managed by the Single Manager, tactical missiles, 
and all other military service-managed conventional munitions. It 
excludes toxic chemical and special weapons. See Department of 
Defense, Regulation 4140.1-R, para. C9.3.1.2.1 (May 23, 2003). 

[54] See, e.g., Department of Defense, Regulation 4140.1-R, para. 
C9.3.1 (May 23, 2003). 

[55] Sonobuoys are sensors used for surveillance and reconnaissance of 
underwater threats. 

[56] We received the Navy reports; however, due to their 
classification, we excluded information on Navy inventory from this 
report. 

[57] The Marine Corps did not have a 2009 stratification report. 

[End of section] 

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