Pentagon Waste: Could Billions Have Been Saved Through Smarter Ordering System?

Defense Logistics Agency needs only half of what it orders, wasting $7 billion.

June 09, 2010, 1:47 PM

June 10, 2010— -- There is no question that with the United States involved in two wars, the troops need lots of equipment and plenty of spare parts to keep things running.

That is where the Pentagon's Defense Logistics Agency comes in. It is the DLA's job to manage and buy huge amounts of spare parts to make certain that the military is ready and operating.

However, a new report from the Government Accounting Office found that the agency is ordering so many supplies, it is leading to tremendous waste. The DLA has bought billions of dollars worth of equipment at taxpayer expense that is not even needed by the military.

Sen. Bernie Sanders, independent of Vermont, is outraged by the spending.

"The Pentagon is wasting an enormous amount of money. In this case it's the Defense Logistics Agency," he told ABC News. "They have $13 billion in inventory [...] $7 billion of that is spare parts they don't need."

That's right, $7 billion in spare parts -- a full half of the inventory -- won't be needed by the military, leaving warehouses stuffed with brand new equipment that is simply gathering dust.

For example, the DLA purchased 230 aircraft access covers used when repairing the B1 bomber.

At $3,900 a piece, that order adds up to $897,000. But the agency found out that only 35 would be needed, too late to save taxpayers some $760,000.

Then, there's a part used on the MRAP mine-resistant armored vehicles, which are so important for troops on the ground.

In Feb. 2009, the DLA bought 1,200 winches for the vehicles, which were delivered in May of that year. In the interim, forecasted demand for the item dropped from 51 per month to just six per month. Using the new rate of demand, the inventory would last for 20 years. If they had changed the order based on the adjusted demand rate, the agency could have saved $691,000.

$7 Billion in Missed Savings

The list of missed savings opportunities goes on, for a $7 billion total. That could have covered the entire budget for the National Science Foundation or paid for half the cost of the 2010 Census. In fact, $7 billion in savings could actually take care of the Defense Department's own budget reduction goal.

In a statement to ABC News the DLA said they welcome the report and that they have "been taking positive steps to decrease our inventory of spare parts. "

The statement goes on to say they will continuing using the GAO's reccomendations to make improvements and that they "have also redefined our processes and implemented a new information systems architecture to improve our demand forecasting, and we continue with these efforts."

"The communications between the Army, Navy, Air Force and the Defense Logistics Agency, according to the GAO, is very, very poor," said Sanders.

The problem lies in DLA's ability to adjust to demand needs.

"Sometimes they are saying they need parts when in fact that is not accurate," he said. "Here's some irony here, in some instances, we don't have the parts that the military actually needs, in the middle of two wars. So the communications process is very, very faulty."

Sanders said that while some of the spare parts are sold, others are simply thrown away.

It's now too late for savings from spare parts, because taxpayers have already paid the bill. But the GAO hopes that this time, lessons have been learned.

Click here to read the full Defense Losgistics Agency statement.

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