Defense Logistics:

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

GAO-14-182: Published: Mar 31, 2014. Publicly Released: Apr 28, 2014.

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

 

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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.

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 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.

For more information, contact Zina D.Merritt at (202) 512-5257 or merrittz@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: In its Fiscal Year 2017 Budget Estimate for Operation and Maintenance, the Navy projected transferring approximately $700,000 for the proper alignment of the Ordnance Information System Program to implement Defense Logistics Management Standards (DLMS). However, the Navy Fiscal Year 2017 Budget Estimate did not include Marine Corps funding requirements for DLMS.

    Recommendation: To improve the efficiency of data exchanges between LMP and other service ammunition systems, the Secretary of Defense, in coordination with the Under Secretary of Defense for Acquisition, Technology, and Logistics, should direct the Secretary of the Navy to (1) take steps to incorporate Defense Logistics Management Standards (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.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: The Air Force did not provide an update as of August 2016 on action concerning accelerating the target date for incorporating DLMS in the Combat Ammunition System. In September 2014, DOD reported that it was on track for full implementation of DLMS by 2017.

    Recommendation: To improve the efficiency of data exchanges between LMP and other service ammunition systems, the Secretary of Defense, in coordination with the Under Secretary of Defense for Acquisition, Technology, and Logistics, should 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.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: The Army did not provide an update as of August 2016 concerning when additional ammunition-related functionality will be included in LMP. In September 2014, DOD reported that LMP will incorporate additional ammunition-related functionality to improve the timeliness and visibility of ammunition data as part of a future system update (known as LMP Increment 3).

    Recommendation: 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, the Secretary of Defense should 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.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: The Army's May 2016 Performance Work Statement for the National Level Ammunition Capability (NLAC) indicates that steps will be taken to ensure NLAC data is comprehensive and accurate and that a Quality Assurance Plan will be developed. We will follow up to determine the status of these efforts.

    Recommendation: To improve DOD's ability to provide total asset visibility over conventional ammunition, the Secretary of Defense should 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 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.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: In March 2016, DOD designated the National Level Ammunition Capability as the authoritative source of conventional ammunition data for the department. Specifically, in March 2016, the Under Secretary of Defense for Acquisition, Technology, and Logistics issued a memorandum that designated NLAC as the authoritative source of conventional ammunition data and provided implementation guidance to the military services to facilitate this effort.

    Recommendation: To improve DOD's ability to provide total asset visibility over conventional ammunition, the Secretary of Defense should 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 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.

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: The Army has begun to include missile information in DOD's annual ammunition cross-leveling process. In September 2014, DOD provided an update to the Committee on Homeland Security and Government Affairs regarding the status of this recommendation and stated that it was revising guidance to add missile information managed by the Army Aviation and Missile Command to its annual inventory stratification report. The military services use such stratification reports as a key input for the ammunition cross-leveling process. A subsequent DOD briefing on the results of the fiscal year 2014 cross-leveling process showed that Army missiles were included in the process and that some missiles were transferred to another service. DOD also has issued revisions to its supply chain guidance requiring such information to be included as part of stratification reporting.

    Recommendation: To enable the military services to make maximum use of ammunition in the inventory, the Secretary of Defense should 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.

    Agency Affected: Department of Defense

  7. Status: Closed - Implemented

    Comments: In September 2014, DOD reported that it was revising DOD guidance to include unclaimed ammunition data categorized for disposal from prior years in the annual redistribution process. Revisions were made to DOD Manual 4140.01 and were published on August 14, 2015 (vol. 6) and June 25, 2015 (vol. 10).

    Recommendation: To enable the military services to make maximum use of ammunition in the inventory, the Secretary of Defense should 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 Affected: Department of Defense

 

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