Last year, many U.S. Navy aircraft sat grounded and waited for replacement parts to return them to airworthy status once again, unaware that the critical spare parts were already in their possession.
Thomas Modly, the Under Secretary of the Navy, revealed at a Military news conference last week that the Navy had failed to account for around $126 million in spare parts that could have begun critical aircraft maintenance, Military.com reported.
“Not only did we not know that the parts existed, we didn’t even know the warehouse existed,” said Moldy during the annual meeting of the Military Reporters and Editors conference at Navy League headquarters in Arlington, Virginia.
Moldy, the Navy’s number two civilian in charge, said the $126 million in F-14 Tomcat, P-8 Poseidon and P-3 Orion spare parts were found at a warehouse in Jacksonville, Florida during Navy and Marine Corps-wide audits, which he said helped resolve the inventory problem.
“When they brought those parts into the inventory system, within a couple of weeks there were like $20 million in requisitions on those parts for aircraft that were down because we didn’t know we had the parts of the inventory,” he said.
The audit was performed by the London-based Ernst and Young accounting firm, according to Navy Times.
Moldy said tracking inventory is one of the critical challenges facing the Navy.
“It’s billions of dollars and we don’t have good accountability on that,” he said. “We need to get much better.”
Moldy said the Navy is making efforts to implement better inventory tracking systems, which he hopes will prevent misplaced parts in the future.
In a series of remarks covering a range of Navy issues, Moldy set the inventory issue alongside a Navy need to push for business reforms and cut costs to improve the effectiveness of spending.
Citing the example of delays on the completion of the USS Gerald R. Ford aircraft carrier, Moldy said one problem for the Navy is its limited number of suppliers. In the case of the delayed aircraft carrier, Moldy alluded to Newport News Shipbuilding — a subsidiary of Huntington Ingalls Industries, the sole builder of aircraft carriers for the U.S.
“Who else are we going to go to? If they don’t perform, your ability to hold them accountable is very, very difficult,” he said.
Moldy characterized the shortcomings as an issue of “shared responsibility” between the U.S. Navy and private industry.
The Defense Department failed a prior 2018 audit, finding $367 million in misplaced spending. At the time, Republican Rep. Mac Thornberry, then-Chairman of the House Armed Services Committee, called the failed audit an opportunity for defense reforms to improve efficiency in spending.
— Reuters (@Reuters) November 15, 2018
Thornberry did not advocate spending cuts as a result of the misplaced spending and warned spending cuts would reverse progress made towards rebuilding U.S. defense spending.