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UNITED STATES GENERAL ACCOUNTING OFFICE
WASHINGTON, D.C. 20548
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION
B-162152 APRIL 9,1985
General Richard H. Thompson
Commander, U.S. Army Materiel Command
5001 Eisenhower Avenue
Alexandria, Virginia 22333
Dear General Thompson:
Subject: 'The Army's Use of Serviceable Returns in
Requirements Computationsl (GAO/NSIAD-85-59)
We have concluded a limited survey of serviceable returns
to the Army wholesale supply level. This survey was initiated
to determine the degree of compliance with the recommendations
in our prior report entitled Army Can Save Millions Annually by
Properly Considering Serviceable Returns in its Requirements
Computations (LCD-80-64, May 15, 1980). ]
The Department of Defense (DOD) had concurred in that
report's recommendation that the Army reduce projected require-
ments for materiel by the full amount of forecasted returns of
serviceable materiel and directed specific actions by the Army.
Our current survey found that the rate of offset to demands as a
result of forecasted serviceable returns to inventory control
points (ICPs) remains low--zero to 20 percent.
BACKGROUND
Excess serviceable materiel is materiel requisitioned from
the wholesale supply level and received by the requisitioner,
but is found to be the wrong item or is no longer needed by the
requisitioner. The requisitioner notifies the wholesale supply
level that he or she has the excess materiel and is informed to
return the materiel to the wholesale supply level, or if the
wholesaler has no need for the item, the requisitioner is told
to dispose of the item locally.
In addition, the wholesaler also records the user's
requisition on the demand history file for this particular
item. This file forms the bases on which future requirements
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