The Navy Paid $3.8 Million to Store Spare Parts It Doesn't Need

The Pentagon's own watchdog, the DoD Office of Inspector General⧉, projects that Naval Supply Systems Command's Weapon Systems Support arm (NAVSUP WSS) -- the office that keeps spare parts flowing to Navy ships, submarines, and aircraft -- was maintaining 34,912 unique types of parts, 43% of everything it has held for five-plus years with zero demand, no longer needed by any weapon system -- a projection built from a sample that the Navy's own aviation and ship-engineering commands confirmed as unneeded.▸ NAVSUP paid an estimated $3.8 million in FY2024 storage fees⧉ just to keep that dead stock on a shelf -- a bill that could reach an estimated $22.9 million over six years if nothing changes.

NAVSUP manages more than 430,000 National Item Identification Numbers, or NIINs⧉ -- the barcode-like tag the Pentagon assigns to every part it owns, from circuit cards to submarine reduction gears.▸ As of September 2023, 113,800 of those NIINs -- 7.8 million individual items, valued at $3.8 billion -- had gone at least five years without a single customer requesting or drawing one⧉. Of those, 81,829 NIINs sat in warehouses run by the Defense Logistics Agency (DLA), the Pentagon's separate storage arm that bills NAVSUP rent for shelf space⧉ -- and NAVSUP paid the DLA an estimated $9 million in FY2024 just to store all of it, needed or not.

Auditors pulled a statistical sample of 420 of those NIINs and asked the two commands that actually run the weapon systems -- Naval Air Systems Command (NAVAIR) and Naval Sea Systems Command (NAVSEA) -- whether the parts were still needed.▸ Their answer: dispose of 248 of the 420. One example is three aircraft engine part kits (NIIN 13135172), on the books since 1989 and worth $949,020, that drew $14,556 in FY2024 storage fees alone before NAVSUP finally agreed they were no longer needed⧉. Another: three ailerons worth $20,853 that NAVSUP had stored for 15-plus years, paying the DLA about $268,395 in cumulative storage fees for them -- roughly 12.9 times the parts' own value⧉.

NAVSUP is supposed to catch this itself: DoD's Comprehensive Inventory Management Improvement Plan, developed in October 2010, set the goal of eliminating five-plus-year no-demand stock⧉ unless there's a documented reason to keep it, and NAVSUP's own guidance requires a disposal review of that inventory every six months.▸ In practice, NAVSUP skipped the review entirely for 355 of the 420 sampled NIINs -- about 85% -- mostly because their quantities sat at or below internal retention floors that exempted them from the review in the first place⧉. Of those 355 skipped items, 134 -- about 38% -- turned out to be exactly the kind of unneeded inventory the review was designed to catch⧉.

NAVSUP's economic model for deciding what to keep also doesn't count the storage costs already paid when weighing whether an item is 'more economical to retain' -- so a part can keep failing that math forever, even after it has cost more to store than it's worth⧉.▸ The auditors' own example: the three ailerons that had already cost about 12.9 times their value in cumulative storage before anyone flagged them.

Part of the breakdown is structural: NAVSUP owns and manages the inventory, but NAVAIR and NAVSEA -- the commands that actually know whether a weapon system still needs a part -- are only supposed to be consulted, not automatically looped in⧉.▸ A NAVSEA official told auditors NAVSUP had not worked with NAVSEA at all to determine which items should be eliminated. That gap started closing only once the DoD OIG asked the question directly: since the audit began, NAVSUP WSS disposed of $998.7 million in excess inventory -- $884 million in aviation stock and $114.7 million in maritime stock⧉, which NAVSUP estimates will save $22.2 million in storage costs over the next six years.

NAVSUP's Commander agreed in writing with every recommendation in the report⧉ -- but 'agreed' isn't 'done': the DoD OIG marks the recommendations resolved, not closed, and will only close them once NAVSUP documents that it actually reviewed and disposed of the remaining unneeded stock and rebuilt its economic model to count the storage bill it's already run up.▸ The report's transmittal memo asked NAVSUP for a written status update within 90 days.