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Summary

We issued our audit of Coast Guard’s inventory management of spare and repair parts of cutters and small boats. During FY 2002, Coast Guard plans to begin constructing a new warehouse for inventory parts managed by its Engineering Logistics Center. Fifty-nine percent of the inventory items are inactive, meaning there were no requests for them over a 32-month period. An additional 28 percent of items were in low demand, meaning they were requested four or fewer times annually. Coast Guard agreed with our recommendation to reconsider the need for and size of the proposed warehouse based on the results of transferring inventory items to the Defense Logistics Agency or other Government agencies and disposing of unneeded inventory. However, Coast Guard's response included a reevaluation which concluding that the warehouse was needed and appropriately sized. We recommend deferring the warehouse decision until Coast Guard completes the review and knows which and how many parts need to be warehoused.