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B-133025 1 (1974-06-17)

handle is hein.gao/gaobaafph0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE 0 -315I3 . WASHINGTON, D.C. 20548 L :MSTMS AND COMMUNIONS REFERENCE CC0?Y DIVISION G B-13302S Q not remeve the Report JUN 1 7 1974 B-133025 e, Secon, urdess thaied out. Return promptly. The Honorable/ lIllhl lIIllll/lllIIHIIIIn/ The Secretary of Defense - LM095831 Dear Mr. Secretary: GAO is terminating its review of the Army's Routine Economic Airlift (REAL) program because the Army has suspended the program pending correction of problems which have pre- vented REAL from achieving planned objectives. This report summarizes our observations on the program, many of which we discussed with Army officials during our review. The purpose of REAL was to improve the responsiveness of the Army's logistic support.sys.t.em and effect savings by re- ducing the stocks re iired for pipelime andqhadp4 inventories in- -eias theat-eii-i-e 1beseeave that the economic airlift concept--wherein inventory cost reductions more than offset the cost of air transportation--is valid and will lower costs and improve the effectiveness of the Army's logistic support program if the Army can solve the problems it had in initially operating the program. The problems we have identified should be considered dur- ing the reassessment of the REAL program. For example, we found that the data used in selecting items for routine air shipment was not realistic or valid and that the universe of items deemed eligible to be considered for REAL was unneces- sarily restrictive. In addition, the Army did not implement a program to evaluate the effectiveness of the REAL operation. We feel these problems contributed significantly to the pro- gram's failure. Our examination of the REAL program involved work at Headquarters, Department of the Army; the Army Materiel Com- mand; the Military Airlift Command (MAC); two national inven- tory control points and three Army depots in the continental United States (CONUS); and the U.S. Army, Pacific, in Hawaii. BEST fA

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