GAO-07-232 Opportunities Exist to Save Billions by Reducing Air Force Unneeded Spare Parts Inventory DTD April 2007

The Air Force has continued to purchase unneeded on-order inventory because its policies do not provide incentives to reduce the amount of inventory on order that is not needed to support requirements. When the Air Force buys these items it may obligate funds unnecessarily, which could lead to not having sufficient obligation authority to purchase needed items and could negatively impact readiness. In addition, although the percentage of the Air Force on-hand inventory was reduced by 2.7 percent due to increases in demand, about 65 percent ($18.7 billion) of this inventory was not needed to support required inventory levels. GAO calculated that it costs the Air Force from $15 million to $30 million annually to store its unneeded items.