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B-125057 1 (1973-11-29)

handle is hein.gao/gaobaafup0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE SWASHINGTON, D.C. 20548 % i LOGISTICS AND COMMUNICATIONS DIVISION B- 125057 (NOV 2 9 1973 The Honorable !Il~lIII/II!IIIlhIIIIIIII The Secretary of the Navy LM096011 Dear Mr. Secretary: In a letter dated August 6, 1973, you forwarded the Department of the Navy's reply to our report to the -Congress entitled Economies Available ThroughIp Xg&,,Management of Naw S1pboa nyrtxe(-207 Apr. 9, 1973)7O6rdi- narily there is no need for a written response on our part. However, in this particular case, we feel obligated to comment on a statemet includtid in the Navy's reply that could be mis- inter~R,,e ed as presenting a GAO position quite dfff'6ht romi the one we actually took. On page 5 of its reply, the Navy said that it believed our projection of $59 million in fleetwide shipboard excesses was overstated about fourfold because of shortcomings in the estimating methodology we used. Immediately thereafter it stated, This has been discussed informally with GAO repre- sentatives who concede shortcomings in the methodology, but because of other external factors, are reluctant to change their estimate. These comments could be misinterpreted as meaning our representatives had informally agreed that our estimate was overstated fourfold, which is far from true. Our estimate of fleetwide excesses was based on the difference between the total value of inventories removed from selected ships receiving supply overhauls during fiscal years 1971 and 1972 and the total value of the authorized stockage lists for these ships. During informal discussions held on July 13, 1973, a representative of the Office of the Assistant Secretary of Defense (Comptroller) and an official of the Office of the Deputy Chief of Naval Operations, Logistics, told us that the Navy believed our estimate of excesses accumulated and held aboard ships for up to 3 years was overstated by about $45 million. The Navy representative said that the authorized 7D-8--_E

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