§2458. Inventory management policies

(a) Policy Required.-The Secretary of Defense shall issue a single, uniform policy on the management of inventory items of the Department of Defense. Such policy shall-

(1) establish maximum levels for inventory items sufficient to achieve and maintain only those levels for inventory items necessary for the national defense;

(2) provide guidance to item managers and other appropriate officials on how effectively to eliminate wasteful practices in the acquisition and management of inventory items; and

(3) set forth a uniform system for the valuation of inventory items by the military departments and Defense Agencies.

(b) Personnel Evaluations.-The Secretary of Defense shall establish procedures to ensure that, with regard to item managers and other personnel responsible for the acquisition and management of inventory items of the Department of Defense, personnel appraisal systems for such personnel give appropriate consideration to efforts made by such personnel to eliminate wasteful practices and achieve cost savings in the acquisition and management of inventory items.

(Added Pub. L. 101–510, div. A, title III, §323(a)(1), Nov. 5, 1990, 104 Stat. 1530 ; amended Pub. L. 102–190, div. A, title III, §347(a), Dec. 5, 1991, 105 Stat. 1347 .)

Amendments

1991-Subsec. (a)(3). Pub. L. 102–190 added par. (3).

Implementation of 1991 Amendment

Secretary of Defense to establish uniform system of valuation described in subsec. (a)(3) of this section not later than 180 days after Dec. 5, 1991, see section 347(c) of Pub. L. 102–190, set out as a note under section 2721 of this title.

Report on Inventory and Control of Military Equipment

Pub. L. 106–65, div. A, title III, §363, Oct. 5, 1999, 113 Stat. 576 , provided that:

"(a) Report Required.-Not later than August 31, 2000, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the inventory and control of the military equipment of the Department of Defense as of the end of fiscal year 1999. The report shall address the inventories of each of the Army, Navy, Air Force, and Marine Corps separately.

"(b) Content.-The report shall include the following:

"(1) For each item of military equipment in the inventory, stated by item nomenclature-

"(A) the quantity of the item in the inventory as of the beginning of the fiscal year;

"(B) the quantity of acquisitions of the item during the fiscal year;

"(C) the quantity of disposals of the item during the fiscal year;

"(D) the quantity of losses of the item during the performance of military missions during the fiscal year; and

"(E) the quantity of the item in the inventory as of the end of the fiscal year.

"(2) A reconciliation of the quantity of each item in the inventory as of the beginning of the fiscal year with the quantity of the item in the inventory as of the end of the fiscal year.

"(3) For each item of military equipment that cannot be reconciled-

"(A) an explanation of why the quantities cannot be reconciled; and

"(B) a discussion of the remedial actions planned to be taken, including target dates for accomplishing the remedial actions.

"(4) Supporting schedules identifying the location of each item that are available to Congress or auditors of the Comptroller General upon request.

"(c) Military Equipment Defined.-For the purposes of this section, the term 'military equipment' means all equipment that is used in support of military missions and is maintained on the visibility systems of the Army, Navy, Air Force, or Marine Corps.

"(d) Inspector General Review.-Not later than November 30, 2000, the Inspector General of the Department of Defense shall review the report submitted to the committees under subsection (a) and shall submit to the committees any comments that the Inspector General considers appropriate."

Best Commercial Inventory Practices for Management of Secondary Supply Items

Pub. L. 105–261, div. A, title III, §347, Oct. 17, 1998, 112 Stat. 1980 , provided that:

"(a) Development and Submission of Schedule.-Not later than 180 days after the date of the enactment of this Act [Oct. 17, 1998], the Secretary of each military department shall submit to Congress a schedule for implementing within the military department, for secondary supply items managed by that military department, inventory practices identified by the Secretary as being the best commercial inventory practices for the acquisition and distribution of such supply items consistent with military requirements. The schedule shall provide for the implementation of such practices to be completed not later than five years after the date of the enactment of this Act.

"(b) Definition.-For purposes of this section, the term 'best commercial inventory practice' includes cellular repair processes, use of third-party logistics providers, and any other practice that the Secretary of the military department determines will enable the military department to reduce inventory levels while improving the responsiveness of the supply system to user needs.

"(c) GAO Reports on Military Department and Defense Logistics Agency Schedules.-(1) Not later than 240 days after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report evaluating the extent to which the Secretary of each military department has complied with the requirements of this section.

"(2) Not later than 18 months after the date on which the Director of the Defense Logistics Agency submits to Congress a schedule for implementing best commercial inventory practices under section 395 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105–85; 111 Stat. 1718; 10 U.S.C. 2458 note), the Comptroller General shall submit to Congress an evaluation of the extent to which best commercial inventory practices are being implemented in the Defense Logistics Agency in accordance with that schedule."

Inventory Management of In-Transit Items

Pub. L. 105–261, div. A, title III, §349, Oct. 17, 1998, 112 Stat. 1981 , as amended by Pub. L. 106–398, §1 [[div. A], title III, §386], Oct. 30, 2000, 114 Stat. 1654 , 1654A-88, provided that:

"(a) Requirement for Plan.-The Secretary of Defense shall prescribe and carry out a comprehensive plan to ensure visibility over all in-transit end items and secondary items.

"(b) End Items.-The plan required by subsection (a) shall address the specific mechanisms to be used to enable the Department of Defense to identify at any time the quantity and location of all end items.

"(c) Secondary Items.-The plan required by subsection (a) shall address the following problems with Department of Defense management of inventories of in-transit secondary items:

"(1) The vulnerability of in-transit secondary items to loss through fraud, waste, and abuse.

"(2) Loss of oversight of in-transit secondary items, including any loss of oversight when items are being transported by commercial carriers.

"(3) Loss of accountability for in-transit secondary items due to either a delay of delivery of the items or a lack of notification of a delivery of the items.

"(d) Content of Plan.-The plan shall include for subsection (b) and for each of the problems described in subsection (c) the following information:

"(1) The actions to be taken by the Department, including specific actions to address underlying weaknesses in the controls over items being shipped.

"(2) Statements of objectives.

"(3) Performance measures and schedules.

"(4) An identification of any resources necessary for implementing the required actions, together with an estimate of the annual costs.

"(5) The key management elements for monitoring, and for measuring the progress achieved in, the implementation of the plan, including-

"(A) the assignment of oversight responsibility for each action identified pursuant to paragraph (1);

"(B) a description of the resources required for oversight; and

"(C) an estimate of the annual cost of oversight.

"(e) GAO Reviews.-(1) Not later than 60 days after the date on which the Secretary of Defense submits the initial plan to Congress, the Comptroller General shall review the plan and submit to Congress any comments that the Comptroller General considers appropriate regarding the plan.

"(2) The Comptroller General shall monitor any implementation of the plan and, not later than 1 year after the date referred to in paragraph (1), submit to Congress an assessment of the extent to which the plan has been implemented.

"(f) Submissions to Congress.-The Secretary shall submit to Congress any revisions made to the plan that are required by any law enacted after October 17, 1998. The revisions so made shall be submitted not later than 180 days after the date of the enactment of the law requiring the revisions."

Inventory Management

Pub. L. 105–85, div. A, title III, §395, Nov. 18, 1997, 111 Stat. 1718 , provided that:

"(a) Development and Submission of Schedule.-Not later than 180 days after the date of the enactment of this Act [Nov. 18, 1997], the Director of the Defense Logistics Agency shall develop and submit to Congress a schedule for implementing within the agency, for the supplies and equipment described in subsection (b), inventory practices identified by the Director as being the best commercial inventory practices for the acquisition and distribution of such supplies and equipment consistent with military requirements. The schedule shall provide for the implementation of such practices to be completed not later than three years after the date of the enactment of this Act.

"(b) Covered Supplies and Equipment.-Subsection (a) shall apply to the following types of supplies and equipment for the Department of Defense:

"(1) Medical and pharmaceutical.

"(2) Subsistence.

"(3) Clothing and textiles.

"(4) Commercially available electronics.

"(5) Construction.

"(6) Industrial.

"(7) Automotive.

"(8) Fuel.

"(9) Facilities maintenance.

"(c) Definition.-For purposes of this section, the term 'best commercial inventory practice' includes a so-called prime vendor arrangement and any other practice that the Director determines will enable the Defense Logistics Agency to reduce inventory levels and holding costs while improving the responsiveness of the supply system to user needs.

"(d) Report on Expansion of Covered Supplies and Equipment.-Not later than March 1, 1998, the Comptroller General shall submit to Congress a report evaluating the feasibility of expanding the list of covered supplies and equipment under subsection (b) to include repairable items."

Direct Vendor Delivery System for Consumable Inventory Items of Department of Defense

Pub. L. 104–106, div. A, title III, §352, Feb. 10, 1996, 110 Stat. 266 , provided that:

"(a) Implementation of Direct Vendor Delivery System.-Not later than September 30, 1997, the Secretary of Defense shall, to the maximum extent practicable, implement a system under which consumable inventory items referred to in subsection (b) are delivered to military installations throughout the United States directly by the vendors of those items. The purpose for implementing the system is to reduce the expense and necessity of maintaining extensive warehouses for those items within the Department of Defense.

"(b) Covered Items.-The items referred to in subsection (a) are the following:

"(1) Food and clothing.

"(2) Medical and pharmaceutical supplies.

"(3) Automotive, electrical, fuel, and construction supplies.

"(4) Other consumable inventory items the Secretary considers appropriate."

Date of Issuance of Policy

Section 323(b) of Pub. L. 101–510 provided that: "The policy required by section 2458(a) of title 10, United States Code (as added by subsection (a)), shall be issued not later than 180 days after the date of the enactment of this Act [Nov. 5, 1990]."