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Peace at any cost is a Prelude to War!
Navy, Air Force
spare-parts crisis
Pentagon says new procedures
'eliminated war reserve levels'
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By Jon E. Dougherty
� 2000 WorldNetDaily.com
An internal Pentagon report says that Clinton-era changes to the Department
of Defense accounting and inventory procedures have "virtually eliminated war
reserve levels of spare parts for both the Navy and the Air Force," reversing
a decade-long effort of steady investment in vital military components.
The report, dated May 11, says "despite ... current initiatives" that were
only implemented last budget year to remedy the Pentagon's spare parts
problems, "the [Defense Department] is likely to face parts challenges for
the foreseeable future."
Released from the office of the director for Readiness Programming and
Assessment, the eight-page report said "spare parts shortages have been a
major factor in lower reported equipment levels, particularly in ... aviation
communities, for the last five to seven years."
A high-level Pentagon source, who spoke on condition of anonymity, told
WorldNetDaily that though other "peace dividend reductions" were originally
implemented in 1989, "from then until 1991, readiness was not affected."
The report said that while more money has been added to the Defense budget to
resolve the spare parts problem, the "funds have not added to the overall
stockage level, but rather prevented the inventory from shrinking further. In
effect, we are purchasing more parts in order to maintain the current
inventory level," which has shrunk.
"New [military] missions added are now part of the baseline requirement," the
Pentagon official said, "but there is no room to fund real readiness
improvements unless the top line is increased or the missions decrease."
The report "documents large reductions in [the Pentagon's] overall spare
parts inventory since the early '90s," as well as "a number of business
practice changes that ... reduced our ability to monitor spare parts
inventories and forecast problems."
Spare parts problems will continue, the report said, because "many of the
root causes of the current situation have not been remedied."
The report said the Defense Department's current spare parts inventory is
valued at $64 billion, up from its 1980 level of $43.4 billion -- the final
budget year of the Carter administration's "hollow military" years, analysts
said.
By 1989, however, the Pentagon's spare parts inventory had climbed to $109.4
billion "primarily due to an expanded force structure and a concerted effort
to increase spare parts." After the department initiated "a series of
business and financial management reforms" to comply with the Pentagon's
"Base Force" restructuring plan, "the Department established a plan to reduce
'excess' inventories."
"In the early '90s, Congress quickly added to this movement by imposing
legislative constraints on what the Department could purchase for its
wholesale inventory," the report said.
In 1990, Congress imposed a 90 percent material replacement limitation,
followed by an 80 percent limitation in 1991. But from 1992 to 1995, Congress
imposed a 65 percent material replacement level.
At the same time, throughout the Clinton-Gore administration, military
deployments and missions have more than doubled from deployment levels seen
in the 15 years between the U.S. exit from South Vietnam and the end of the
Cold War 11 years ago.
"Because of these initiatives, the DOD spare parts inventory, when adjusted
for price changes, has been reduced in the last decade by approximately 50
percent for both wholesale (depot level) and retail (held at the local base)
levels," said the report.
"The reduction virtually eliminated war reserve levels of spare parts for
both the Navy and Air Force and lowered the amount (retention levels) for
slow moving or inactive inventory," the report said.
"There were $7 billion in 'peace dividend' savings generated from 1992 to
1994," the Pentagon official said, "and about $9 billion since then from
operation purposes, including drug-war missions, increases in peacekeeping,
counterintelligence" and other frontline and combat-oriented missions.
"The administration has ordered all these new missions without increasing the
'top line' of the DOD's budget."
The root causes of the Pentagon's spare parts and readiness problems "were
generally good ideas," the official said, "but they were used to justify
taking far more funding than they saved."
The report said Clinton administration officials at the Pentagon changed the
re-supply and spare parts inventory systems from one of actively keeping
necessary stockpiles of highly used spare parts to a "just-in-time" delivery
system used by corporate America to keep its inventories low.
But as parts suppliers go out of business or stop manufacturing spare parts
because they are no longer getting orders for them, as well as other business
reasons, "wholesale levels [of inventory] have not been increased
accordingly," the report said.
Maintenance level changes also initiated during the Clinton-Gore
administration have caused "long delays in unit stock replacement, weapon
systems down awaiting parts, and costly supply and maintenance actions such
as cannibalization, parts expediting [paying more for overnight deliveries,
for example], and local procurement/repair," the report said.
Other accounting gimmicks made the spare parts and inventory supply systems
dependent on "financial management of the stock fund" while "judgments on the
adequacy of spare parts requirements" became less dependent on "logistics
measures and readiness requirements," said the Pentagon document.
The report also cited other factors "exacerbating" the spare parts shortages:
Diminishing manufacturing sources: With the end of the Cold War, worldwide
the defense industry has downsized, meaning the Pentagon has a problem
finding replacement parts for older weapons systems. "Because the services
are often not aware of the discontinuance of an item until the manufacturer
has made the decision, the services are often in a reactive mode with limited
options for addressing the problem," the report said.
Aging weapons systems: Aging systems have added support costs to the
Pentagon's budget. "The aging of the DOD weapons systems, especially
aircraft, will continue to present material readiness challenges for the
Department until the next generation systems are purchased and fielded," said
the report.
Skill and knowledge drains: For the past 10 years, the Pentagon has
dramatically decreased its military and civilian workforce. "Many of these
downsizing efforts ... were directed at the Department's support functions,
such as logistics and supply, and have left skill shortages or imbalances in
these areas."
"If you're going to play fast and loose with the numbers -- if that's what's
going on here -- or if you're going to try some sort of harebrained reforms
that aren't going to work, don't do it in an area of defense spending that
you're about to severely tax," said Eric Schlect, director of congressional
relations for the National Taxpayer's Union.
Schlect, who analyzed the report, said that the added weight of additional
military deployments ordered by the Clinton administration -- coupled with
inappropriate Defense Department expenditures -- have contributed greatly to
an overall decrease in military readiness.
"Who knows how much the administration knew about the extra deployments they
have ordered before they actually ordered them? They must have known about
some of them and they probably knew they had no intention of pulling troops
out of existing deployments. But if you know about them -- and that's going
to severely tax your spare parts -- don't start messing with spare parts and
taking monies away from them," Schlect said.
"If you need the money ... take it from somewhere you can afford it," he
added, "especially for frivolous social programs."
The Defense Department failed to return repeated calls seeking comment on the
report and about the current state of spare parts readiness within the
service branches.
The hardest hit over the last several years of decreasing spare parts funding
has been the Pentagon's aviation branches. According to the report, the Air
Force has especially suffered.
"The largest [parts budget increases] were in the Air Force spare parts
accounts," the report said, but "even with this increase, the Air Force is
projecting only a modest increase (3-5 percent) [in] aircraft mission capable
rates."
The report said "some evidence" suggested the Air Force's spare parts
shortages were easing, "but not significantly so." Also, "the current
forecast is for the Air Force MC (mission capable) rates to remain below the
levels experienced five years ago.
"The Air Force arguably has the largest spare parts problem, but the remedies
proposed to date will, at best, only solve part of the problem," the Pentagon
document said.
The Army, meanwhile, said it expects easing in its spare parts problems but
"this seems to be in direct contrast to the Army's recent experience with its
rotary wing fleet and the M1A2 tank, where there have been notable
reliability problems," the report said.
Further, the report said, the number of Army systems "not meeting supply
availability goals" has increased "notably" in the past year, and the service
has "identified a $250 million unfunded shortfall in its unit stocks."
The status of spare parts in the Navy is "unclear," the report said, though
"with a replacement rate of only 75 percent in FY2000, Navy spares inventory
can be expected to continue to shrink."
"Many Navy aviation units continue to 'bowwave' (defer) spare parts
requirements late in the fiscal year due to lack of funding," said the
report, which added that the Navy "identified $174 million in unfunded
initial spares ... requirements to Congress for the FY2001 budget."
The Marine Corps "is not experiencing significant spare parts shortages as
seen in the other services," said the report, which did not address spare
parts levels in the Coast Guard
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