Navy Sinks Billions into Spare Parts

The U.S. today has a $10.6 trillion national debt and huge unmet needs in such areas as health care, education, infrastructure and sustainable energy. Unfortunately, in the midst of all of this the Pentagon, with a greatly expanded budget of $540 billion, continues to waste billions every year. Despite repeated warnings about longstanding problems with the military's inventory management, $7.5 billion worth of unneeded parts were stashed in Navy warehouses, according to a new Government Accountability Office report that I requested.

Having too many spare parts just doesn't make sense. The bloated inventories were so big that the parts-on-hand in some cases exceeded the expected demand for the items for decades to come, according to the report.

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

And that's not even the worst of it. In fact, the Navy has ordered millions of dollars in spare parts that have not yet been delivered to its warehouses that already are marked for disposal. That is both unbelievable and outrageous.

Without acting on the GAO's 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."

It's not just the Navy. The new GAO report is the latest in a long 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. A report on the Army inventory practices is due out in January.

One result of squandering money on excessive spare parts, the latest report concluded, is that "these funds are not available to meet other military needs."

To my way of thinking, the waste by the military is even more outrageous 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 us out of a steep recession.

For years now, the Pentagon has been urged 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.

They say they are working on it. Fine, but we don't need more lip service. It obviously is not good enough just to say "do a better job." We must make it illegal for the military to spend appropriations on spare parts that it cannot justify.

This is not a new problem. In 1940, then Senator Harry Truman headed up a 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. We could use that same kind of concerted effort today to root out waste. That's why I cosponsored legislation that was approved by the Senate to establish an independent, bipartisan commission to investigate U.S. wartime contracting abuses in Iraq and Afghanistan.

At a time when our country faces an unprecedented economic crisis we need to be vigorous in ending fraud, waste and duplication in all areas of government. For too long, the Pentagon has been exempt from that scrutiny. That neglect must end now.

To read the new GAO report, click here.

Senator Bernie Sanders, an independent from Vermont, is a member of the Senate Budget Committee.

Comments

[Doofus]

The logistics of spare parts is just a terribly complex business, made all
the more so by having as 'extensive' a military organization as we do.
If we it were a smaller organization, it'd require a lot fewer spare parts.
That'd be the way to go.

Having too many spares is bad. Having too few is worse. 'Just right' almost
never happens. Complaining about this is somewhat opportunistic.

[zlohcuc]

If ever the bromide "follow the money" was appropriate , it is here. Simply have a look at the way the procurement procedures and work flows are structured and you will discover who is profiting from the currently indecipherable patchwork of this "system" Here is wild guess, peoples' jobs and bonuses are likely tied to perpetuating the current rules and regulations. There is no reason to change since most of the players on the supply and procurement side are complicit. What is the upside for the machine to identify and eliminate this waste? There are no consequences, immunity to reform no matter how staggering the dollars at stake, continues on despite the regular recitation of these warnings and reports.

[brokenarrow]

Conservatives, yeah, right. I'm just going to stop paying taxes until accountability is restored.

[vippy]

Unbelievable, how government just wastes and wastes but they know how to raise taxes!!!!
It is always "not my job." What are the congressmen and senators doing - they always dream up
new ways of something so why can't they initiate or put oversight on something that seems out of
control?

[1differentdrummer]

Well, the Navy is businesslike, in a George Bush Pentagon sort of way.

[realpolitic]

Yes, we need an investigation into how so many billions were wasted in Iraq and Afghanistan. We need prosections were approriate.

[twofish]

And stop the deployment of Star Wars missile defense until they can prove that it works.

[PierreLeClerke]

Never deploy such a destabilizing system. This is yet another policy for profit scam perpetrated by the M.I.C. with the complicity of it's welled oiled wholly owned MSM and body politic.

If you want to spin your wheels for another century in the wrong direction, poke your neighbor in the eye. Otherwise, invite him to your table and keep him there until you have become friends and realize the world is small and to survive, we must all work together and solve the many urgent challenges confronting the entire human race.

[Shawn0965]

Wait until you get to the Army!

Stockpiles of munitions for weapons systems that don't even exist anymore or that have out lived their shelf life. You haven't seen nothin yet!

[William1950]

yeah, jeeze we don't need any spare oil filters and fan shafts... if the break down just let em go to the local ship parts discount outlet.

[1differentdrummer]

Is that what the article said?

[noneIn2008]

They must not have made the necessary purchase from your district. Polls only holler when they don't get their cut of the pork.

[sammyscout]

Lets start by dropping all the private army contracts

[nonservilepeasant]

Part-2.

I have many stories such as the one that follows, but this particular event is recent.

While at work on a Saturday, I received a call from a Navy ship at sea (designation withheld). The petty officer calling needed a part for one of its guns (type and name of gun withheld). These guns are made in Italy and, I’m told, require frequent repair. Spares aboard ship had been used. This vessel has a mission to protect the fleet and this failed part put one its guns out of commission.

I called in 6 people who were needed to machine, bend, weld, assemble, and test this part. We made two of them. One of our people met an assigned Navy agent at Sea-Tac airport who carried the parts aboard the aircraft to Jacksonville, FL. A Navy helicopter took the parts from Jacksonville out to sea to the vessel.

This was a very expensive part for the US taxpayers (and why we gave them an extra at no cost to the Navy). I won’t say how many spares of this part were permitted by the ship’s regs, but the petty officer told me they had requested more but were denied.

The US Navy has some procurement problems, of that I have no doubt. But I certainly hope for all our sakes that Sen. Bernie Sanders looks at this very, very carefully before jumping to conclusions that lead to faulty—and potentially dangerous—changes to the system.

[Accolay]

I agree. Additionally, I think I know exactly what gun and which ship you're referring to. Getting parts is a bear for many Navy systems. I was on one of these ships when I was in the Navy. Some of these systems are 30 or more year old technology. Like working on a much more complex 70's vehicle restoration and parts aren't just something you can get off the shelf from autozone.

The problem is not only in the procurement of spares, but the tracking, handling, and storage of them. People who were never in the military in a procurement/supply role wont understand. They can't even comprehend the problem. I've been in naval annex warehouses that looked like where the Ark of the Covenant was placed in the end of "Raiders of the Lost Ark." The Navy probably has the part somewhere, but they don't know where it is!

Sometimes getting easy stuff like notebooks was hard.
I could go on about the problems I had with that, and propose solutions too...but I don't have time to write a book.

The military absolutely needs to figure this stuff out, but like you say it needs to be very careful. Also, policy makers must understand that this is the military we're talking about. It can't be totally run like a business. Sometimes when something is needed, stuff is needed now now right now, and there isn't time to wait until the next fiscal year/budget blah blah blah.

[letsbepeaceful]

It's not this kind of spare they are talking about - what your company does is valuable and important. I have a relative who works for the military, doing high-level accounting, who's mad as h*** at the waste and disappearance of billions of dollars. No response from higher-ups in response to their audits and recommendations. It's public knowledge that they are still ordering and receiving parts for equipment that is no longer in use, or that is being phased out. Thousands of oil filters for vehicles they haven't used in 10 years - that kind of thing. Parts for airplanes that are shrouded in an airplane cemetery in Arizona.....parts for weaponry that is no longer issued. And there are still more orders in the pipeline, pushed for by legislators trying to 'save' (read: curry favor with....) a local business.

[nonservilepeasant]

Part-1.

I’m a steadfast Democrat. I own a small business manufacturing small to medium size spare parts for the US Military. For the last 10 or so years, 90+% of our orders have been making parts and supplying materials for US Navy ships and submarines.

The orders we get are not large volume because there aren’t that many ships and submarines. Large businesses don’t normally want to make just a few parts so they charge very high per-part prices for low-volume orders. Small businesses like mine don’t charge such high prices as most of our business is in low-volume orders.

Because of the nature of the above practices, it benefits the US Navy economically to procure parts far in excess of its current needs. Studies show that per-part costs are much lower by doing so, even with storage costs included. Ships and submarines last a very long time but need repair frequently because of the corrosive environments in which they operate in defense of our nation. For ship repair, buyers must obtain materiel from stores (inventory) first and then procure from vendors that which is not available—but from said vendors only in the quantities needed for the repair project.

The US Navy has some procurement problems, of that I have no doubt. But I certainly hope for all our sakes that Sen. Bernie Sanders looks at this very, very carefully before jumping to conclusions that lead to faulty—and potentially dangerous—changes to the system.

[robin50]

I worked in a civilian position supporting a radar system for the navy for over 20 years At one point, due to political whims and cost cutting, it was decided to go to single source suppliers rather than qualifing a second or even third sources for major components of this system. This contractor now has the Navy over the so called barrel. To furnish these major and rather sophiscated components, they must have contract large enough to make it "worth their time".

I do know the Navy does have a large bloated inventory and it does need a good long look. And the bloated staff that it takes to procure all this unneede inventory, needs a good hard look too. Like you, I do hope they are very careful of how they look. The "just in time" system of managing inventory will not work in favor of sailors in many cases. The situation, as you know, is much different than say the aggravation of having to wait a few days for a part for your Ford.

[JimBozo]

Thank you for the lucid comment, nonservilepeasant. It spares me doing the same thing. I might also point out that Jay Leno's column in the new issue of Popular Mechanics is to do with a craftsman who has created new tooling for casting Deusenberg cylinder heads, selling for $40,000 a pop. Jay, who owns seven "Duesys" bought one, and considered himself lucky to get it, even at that price.

Our Navy's vessels are low-volume-semi-custom-built machines. Buying parts which will soon be non-existent if not bought in advance, is a very practical move. Setting up to manufacture replacement parts later, would require new tooling, resulting in even higher costs.

[Carolab]

Planet Pentagon: How the Pentagon Came to Own the Earth, Seas, and Skies

http://www.commondreams.org/archive/2007/07/11/2435

[txkayrose]

We have billions worth of unneeded spare parts, but our troops run short of protective gear? There is enough money to line the pockets of our wartime contractors, but not enough to provide for the physical / mental / emotional recuperation after the troops come home?
There is no way for us on the outside to pick a magic percentage that should be cut, but I agree with Rep. Sanders that a bipartisan committee needs to review the contract-related spending. Providers who can't demonstrate that they are on-time & within budget need to lose their contract. Contracts need to be submitted "blind". Contractors that cannot demonstrate a peace-time value should be moved to the end of the list.
Most of the surplus porbably has a non-military application. Hire some of the homeless, unelployed vets to figure out what to do with all that stuff. (they spent months in foreign countries, making life bearable with nothing but that stuff. you'd be amazed).
REDUCE - REUSE - RECYCLE.