When it comes to shipping supplies, the Department of Defense is no Federal Express. DOD loses track of sixty percent of the $5 billion in supplies it ships, unable to tell if they reached their intended destination. That means that $3 billion worth of tents, shovels, and navigational computers may not ever get to soldiers in need, according to a new U.S. General Accounting Office (GAO) report.
DOD claims the goods, called in-transit inventory, could have been delivered. It just doesn’t know for sure. For 12 million of 21 million shipments in 1997, DOD was unable to produce a receipt of delivery. As far as DOD knows, $3 billion in inventory could have been delivered to the Gap. According to the report, Pentagon accounting is so bad that these figures likely understate the magnitude of the problem.
Not only is the Pentagon supply chain ripe for waste fraud and abuse, it is also a threat to national security. If such practices continued during wartime, DOD would only be able to confirm delivery of crucial supplies to front-line soldiers about 40 percent of the time.
The disastrous delivery record can at least partly be attributed to the chain of paper DOD attempts to keep. While most delivery companies now use computers to scan packages and can tell where a package is at every moment, DOD too often relies on paper receipts.
Though the Pentagon asserts it will soon switch to more advanced inventory control systems, it keeps pushing back the date by which it will upgrade. Reformers, including Sen. Tom Harkin (D-IA) have been pushing for DOD to develop just-in-time inventory techniques, including modern technologies, for several years.
Difficulties with in-transit supplies underscore persistent inventory problems throughout the Pentagon. Last year GAO uncovered $41 billion in excess inventory wasting away at Defense Department storehouses. Reformers argue that the Pentagon must be ordering too much stuff if such pervasive inventory problems don’t completely shut down operations and are only uncovered by independent auditors.
The GAO report entitled, "In-Transit Inventory", was released last week. Document number NSIAD-98-80R can be obtained by calling (202) 512-6000.
For more information contact Patrick Dorton with Senator Harkin at (202) 224-3254.
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