Navy Sinks Billions into Unneeded Spare Part

For Immediate Release

Senator Bernie Sanders

Michael Briggs or Will Wiquist (202) 224-5141

Navy Sinks Billions into Unneeded Spare Part

WASHINGTON - The Pentagon continues to waste billions of dollars on unneeded spare parts, according to a new investigation into Navy purchasing practices that was requested by Senator Bernie Sanders (I-Vt.).

Despite repeated warnings about longstanding problems with the military's inventory management, $7.5 billion worth of unneeded parts were stashed in Navy warehouses annually, according to a new Government Accountability Office report.

The latest investigation covering a four-year period ending in 2007 was conducted at the request of Sanders and Representative Solomon Ortiz, chairman of a House Armed Services subcommittee on military readiness.

"At a time when the nation has a $10.6 trillion debt, we simply cannot afford the continuing uncontrollable waste across the federal agencies," Sanders said.

"It is unacceptable that the Navy has $7.5 billion in unnecessary spare parts stacked up in its warehouses," Sanders added. "In fact, the Navy has ordered millions of dollars in spare parts that have not yet been delivered to its warehouses, but are already marked for disposal. This is both unbelievable and outrageous. Unfortunately, this is not just the Navy, but something the entire military has to address. I hope the next administration will take the issue seriously."

The bloated inventories were so big that the parts on hand in some cases exceeded the actual expected demand for the items for decades to come, according to the report.

In addition to the hefty price tag for the unnecessary parts, the Navy shelled out $18 million just to store the excess parts.

Some items, the GAO report added, continued to be purchased based on projections that were calculated when a part was originally built without ever adjusting for real-life experience. For example, the demand for seven out of nine parts for a submarine sonar system first ordered in 1991 never materialized, but the parts are still held in the Navy inventory.

The Navy agreed had agreed to fix the problems highlighted by GAO before, but failed to take the recommended corrective measures. As a result, the report said, the Navy continues to have "significant levels of secondary inventory exceeding current requirements, including a substantial amount of inventory that had no projected demand."

Without acting on the cost-saving recommendations, the report added, "the Navy will likely continue to purchase and retain items that it does not need and then spend additional resources to handle and store these items."

One result of squandering money on excessive spare parts is that "these funds are not available to meet other military needs," the report concluded. Sanders said the waste by the military is more egregious at a time when investments in rebuilding roads and bridges and schools are desperately needed as part of an economic recovery package to help pull the nation out of a steep recession.

The report is the latest in a series of audits to spotlight costly waste in the military procurement process at the Pentagon. Last September, the GAO calculated that more than half of the Air Force's secondary inventory, with a total average value of $31.4 billion, was not needed to support service requirements.

In fact, for years the GAO has exhorted the Pentagon to provide incentives to reduce purchases of unneeded on-order inventory, conduct a comprehensive assessment of unneeded inventory items on hand, and to take measures to address fluctuations in demand that produce these huge inventories.

Sanders has proposed creation of a panel to root out Pentagon waste. With other freshmen senators, he introduced legislation inspired by former Senator Harry S. Truman. In 1940, the future president became chairman of the Senate Special Committee to Investigate the National Defense Program. In the course of World War II, more than $15 billion in unnecessary and fraudulent defense spending was identified.

To read the GAO report, click here.


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