Defense Logistics: Actions Needed to Improve Department-Wide Management of Conventional Ammunition Inventory
Highlights
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.
Recommendations
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.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | 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. |
DOD concurred with our recommendation. The Navy and Marine Corps have taken steps to incorporate Defense Logistics Management Standards into their ammunition information systems -- Ordnance Information System and Ordnance Information System-Marine Corps, respectively.
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| Department of Defense | 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. |
As of August 2017, the Air Force has redirected its efforts away from the Combat Ammunition System since it has proven difficult to meet the compliance standards of DLMS and Financial Improvement and Audit Readiness (FIAR) within that Air Force system. According to the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, the Air Force is testing a new information system to incorporate both DLMS and FIAR compliance as baseline requirements, and a contract was let in June 2017 to provide additional resources to the developer in order to continue testing with the goal of fielding a limited deployment capability by the end of 2017.
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| Department of Defense | 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. |
As of August 2017, additional ammunition upgrades in LMP deferred under Increment 2 have remained unfunded and unscheduled. According to the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, the Army will continue to assess the ammunition supply chain and its associated management information systems to ensure the service can meet the requirements directed by DOD supply chain materiel management and ammunition guidance. An official within the Under Secretary's office suggested that the Army may discontinue use of LMP as its ammunition information system if it finds that a different approach better fulfills requirements.
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| Department of Defense | 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. |
As of August 2017, DOD has not provided evidence that new internal controls have been implemented regarding data imported from the other service ammunition systems. According to an official within the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, since NLAC is not considered an accountable system of record, the services have not been directed to fund changes in their ammunition systems in order to improve data quality in NLAC. However, since we issued our report, DOD has made a number of improvements to NLAC that include additional reporting capabilities, security controls, and a new user?s manual.
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| Department of Defense | 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. |
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.
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| Department of Defense | 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. |
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.
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| Department of Defense | 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. |
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).
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