GAO Reports Navy Has Billions in Excess Spare Parts

The GAO has reported that the U.S. Navy maintains supply stock in excess of its needs to the value of about $2 billion. This is related to a story we wrote yesterday about the Army hiring a supply chain management contract. The story in USA Today says that in an average year the Navy maintains supply stock worth almost $19 billion. Of this there is only a requirement for about $12 billion. Many of the parts are for older systems that are not used. Of course there is the argument that storing the parts is not costly and there is a chance that they might have to be used in the future if operational rates increased. To identify those parts though that might be useful in the future would require some analysis of the parts pool on hand. When a system is introduced into use there has to be some stock purchased and it may be that some parts were not required at the rate that was originally thought. Balancing the supply and demand may be a tricky thing as you do not want a system down for lack of spare parts.