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Audit finds Navy storing $7.5b in unneeded parts

Analysis fuels calls to reduce defense budget

By Bryan Bender
Globe Staff / December 18, 2008
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WASHINGTON - Government auditors identified at least $7.5 billion worth of unneeded spare parts stored in Navy warehouses yesterday, the latest example of wasteful military spending that is fueling calls for President-elect Barack Obama to take bold action to rein in the Defense Department's bloated budget.

Between 2003 and 2007, the Navy's supply of replacement parts for ships and aircraft far exceeded its needs, the Government Accountability Office found during a new audit. Indeed, in some instances investigators found stocks of equipment that the service is unlikely to use up for decades - such as 13,852 engine blades for its F/A-18 fighter jets estimated to be worth $3.6 million.

In total, the Navy has nearly 2 million more aircraft parts than its own projections deem necessary, while it is storing 10 million ship parts designated as excess, the report found. The cost of storing the equipment alone is $18 million, the GAO estimated.

"Based on Navy demand forecasts, inventory that exceeded current requirements was sufficient to satisfy several years, or even decades, of supply needs," according to the investigation, which was requested by Senator Bernie Sanders, a Vermont independent.

Several factors contributed to the unnecessary purchases, including inefficiency in the Navy's inventory management and a limited ability to accurately forecast equipment needs, congressional auditors said.

"As a result, the Navy had billions of dollars in excess inventory against current requirements each year," the GAO concluded, including some pieces of equipment that are still on order but already slated for disposal because they won't be needed.

Another example cited in the report was seven sonar sets for attack submarines that have been sitting in storage since 1991 and that the Navy never plans to use. And last year alone the Navy had 85,700 "unique items" in its spare parts inventory - valued at $1.9 billion - for which it had no projected demand.

Sanders, who sought the audit and cosponsored legislation earlier this year to create a special oversight board to root out wartime waste, called the findings "unbelievable and outrageous." He urged Obama to take action next year to safeguard taxpayer funds.

"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, a member of the Senate Budget Committee, said in a written statement.

He added: "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."

Obama has said he will make cutting wasteful government spending a top priority.Secretary of Defense Robert M. Gates, whom Obama has asked to stay on indefinitely, has also sent clear signals in recent weeks that he, too, is committed to taking the axe to Pentagon programs he deems unnecessary.

In the meantime, the Pentagon, which concurred with the report's recommendations for improving supply chain management, pledged to take action.

The findings come as the Commission of Wartime Contracting, established by Congress this year to investigate waste, fraud, and abuse in Pentagon purchasing, prepares to hold its first public hearing in February.

But Sanders, in a telephone interview yesterday from Vermont, said far more needs to be done, vowing to author legislation to make it illegal for the military to spend appropriations on spare parts it cannot justify.

"We have been talking about this issue of unused and unneeded spare parts for many years," Sanders told the Globe. "We need legislation to make sure the Pentagon is not wasting billions of dollars."

Bender can be reached at bender@globe.com.

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