Gov't report: Navy has billions in surplus (USA Today)

By Matt Kelley

WASHINGTON — The Navy keeps an average of $7.5 billion worth of spare parts and other goods it doesn't need every year because of poor planning and management, congressional investigators say in a report to be released today.

The Government Accountability Office report says the Navy hasn't heeded repeated warnings since 2001 about longstanding problems with the military's inventory management. The report from the GAO, Congress' non-partisan investigative agency, says the Navy's failure to keep track of changing requirements and a lack of communication among the proper officials led to surpluses of spare parts ranging from submarine sonar sets to engine fan blades for fighter jets.

The GAO found "incredible waste," says Sen. Bernie Sanders, I-Vt., one of the lawmakers who commissioned the report.

"The idea we are spending many billions of dollars every single year for parts that are not needed or not used by the Navy is absolutely unacceptable," says Sanders, a member of the Senate Budget Committee.

In the Pentagon's response to the report, Defense Department logistics manager Jack Bell acknowledged the problems and said the Navy is working to fix the management shortfalls identified by the GAO.

"The department continues its focus on reducing potential excess," Bell wrote.

On average, the Navy had about $18.7 billion worth of spare parts each year from 2004 through 2007, the report says. That exceeded the Navy's own requirements by about 40%, the GAO said.

Most of the surplus could be used in future years, but not always. For example, the Navy had no foreseeable need for about $1.9 billion of spare parts it had on hand in 2007, the report says.

In addition, there was about $3.7 billion worth of unusable spare parts that needed to be repaired before being put into service, the report says.

Some examples of mismanagement cited by the GAO include:

  • The Navy continues to store 19 copies of an electronics module for weapons systems purchased 20 years ago, including 15 of them worth a total of $48,000 that are not needed.
  • The Navy has 13,852 fan blades worth a total of $3.6 million for F-18 jet engines even though "demand for the blades disappeared" when it bought copies of a larger engine part that includes the fan blades.

The Navy is offering to return the excess fan blades to the manufacturer in exchange for a discount on a new contract, the report says.

The report says Navy managers aren't held accountable for cost efficiency, which encourages them to rack up "billions of dollars in excess inventory … without having to demonstrate that these inventory levels are cost effective."