DLA Disposition Services receives, classifies,  segregates, demilitarizes, accounts for, and disposes of personal property  that has been identified as “excess” to the military services’ needs. Figure 2 illustrates this process. DLA officials explained that, in accordance with DLA  guidance and policy, the disposal process is a four-stage process that  includes 42 days (known as the “screening cycle”) during which potential  recipients may screen, request, and obtain excess property at the stages  in which they are eligible to do so, after which any remaining property  may be sold. Measured in terms of original acquisition value, DOD disposes of most of  its excess personal property in this stage. DOD’s Implementation of the Disposal Process Has Given Some Non- Federal Entities Priority over Some Federal Agencies for Obtaining Property

		DOD’s Program for Law Enforcement Agencies Allows Some State and Local Agencies to Take Priority over Some Federal Agencies

DOD’s disposal process has evolved over time as new laws have  authorized non-federal program recipients to obtain property from DOD  that DOD no longer needs. As new laws have added special programs to  the list of eligible recipients for DOD’s excess property, DOD has  exercised its statutory authority to implement these special programs by  allowing certain non-federal recipients (such as state and local law  enforcement agencies) to screen and request property in the first stage of  the disposal process—reutilization—before federal civilian agencies and  state and local governments, which obtain property in later stages— transfer or donation. As a result, in  some cases, federal agencies that may also have a need for such  property for their missions may not be able to obtain it through the  disposal process, because the excess property that was available has  already been claimed by or provided to state or local law enforcement  agencies. During calendar years 2013 and 2014, 150 law enforcement agencies  obtained 285 pieces of earth-moving and excavating equipment through  the 1033 program, with original acquisition values totaling just over $25  million. We could not determine whether any specific item that DLA Disposition  Services provided to state and local law enforcement agencies would  have filled the need that one of those federal agencies met by using  appropriated funds for a new procurement. Such property could potentially be transferred to  federal civilian agencies to meet their needs or donated to states,  municipalities, schools, or nonprofit organizations. Unless DOD further  reassesses its disposal process to determine if it needs to make  additional changes to its guidance governing the priorities of the disposal  process—specifically for property obtained by special programs such as  the 1033 program—and revises its guidance reflecting those priorities, the  risk remains that federal civilian agencies may spend additional  appropriated federal funds to procure equipment, rather than pursue  obtaining equal or similar items at little or no additional cost to the federal  government through DOD’s disposal process. DOD Has Encountered Challenges in Its Capacity to Manage Excess Property in Need of Disposal

		Some Disposition Services Sites Have Extended Waits for Turn-In Appointments and Backlogs of Unprocessed Property

DLA Disposition Services faces challenges in processing the current  levels of excess property that the military services are turning in for  disposal, and these challenges may affect DOD’s ability to handle any  increases in the amount of property for disposal in an efficient manner. Conclusions

For fiscal year 2014, DOD reported that it had reutilized, transferred, or  donated excess and surplus property with a total original acquisition value  of approximately $3.18 billion in nominal dollars. Recommendation for Executive Action

Recognizing that DOD has recently revised its disposition guidance, we  recommend that the Secretary of Defense direct the Director, DLA, to  further reassess DOD’s disposal process to determine whether additional  changes are needed in the priority given to recipients within the process,  including potential changes to the categories and quantities of property  that special programs may obtain, and revise its guidance reflecting those  priorities accordingly to better enable DOD to fulfill the disposal program’s  objectives. Appendix I: Scope and Methodology

To describe the process for disposing of Department of Defense (DOD)  excess personal property in the United States, we reviewed key  documentation of guidance DOD provides to Defense Logistics Agency  (DLA) Disposition Services and DOD components on the disposition of  excess personal property, such as the Defense Materiel Disposition  Manual and the DOD Demilitarization Manual. To assess how DOD’s priorities in its disposal process affect the  distribution of excess property, we reviewed key guidance, manuals, and  policies; legal authorities; and reports and other documents related to the  process.
Why GAO Did This Study

Each year the military services identify thousands of items of personal property—including military equipment and materiel—that they need to dispose of because it is obsolete, not repairable, or excess to their requirements. For fiscal year 2014, DOD reported that excess and surplus property with a total original acquisition value of approximately $3.18 billion in nominal dollars was reutilized, transferred, or donated. DOD reported total revenues of almost $128 million from items sold in fiscal year 2014.
Congress included provisions in reports accompanying legislation for GAO to review DOD's current process for disposing of excess personal property. This report (1) describes the process for disposing of DOD's excess personal property in the U.S.; (2) assesses how DOD's priorities in its disposal process affect the distribution of excess property; and (3) assesses the extent to which DOD has encountered challenges in its capacity to manage excess personal property to be processed. GAO reviewed guidance; obtained the most recently available calendar year (2013-2014) data on property obtained by law enforcement agencies, wait times, and backlogs; and interviewed cognizant officials.

What GAO Found

Disposing of Department of Defense (DOD) property that is excess to a military service's needs is a multi-stage process, executed by the Defense Logistics Agency (DLA). The process includes a 42-day period during which potential recipients may screen, request, and obtain excess property at the stages in which they are eligible to do so (see figure). First, usable property may be reutilized within DOD or provided to special programs (such as the program that provides excess DOD property to federal, state, and local law enforcement agencies) identified in statutes or by DOD. If not reutilized, this property may be transferred to federal civilian agencies, after which it becomes surplus and may be donated to other parties, such as state governments. Remaining property may be sold to the general public, if appropriate and safe, or rendered useless for its original military purpose (demilitarized) and sold as scrap or destroyed.
Overview of DOD's Disposal Process
The priorities outlined in DOD's disposal process guidance place special program recipients in the first stage of the process (reutilization) versus the later stages (transfer or donation), giving some non-federal entities priority for excess property over some federal civilian agencies that may have similar needs. For instance, in calendar years 2013-2014, the special program for law enforcement agencies mentioned above provided 150 of those agencies with 285 pieces of earth-moving and excavating equipment, while at least 9 federal agencies also purchased equipment in this category for their mission needs. GAO could not definitively conclude that any specific item provided to state or local law enforcement agencies would have filled the need any federal agencies met using appropriated funds for new procurement, but the possibility exists. In October 2015, DOD revised its process so that DOD components will obtain its excess property before special programs. Still, special programs could obtain such property before most federal civilian agencies and non-federal entities. DOD is not planning to further assess its priorities to see if additional changes may be needed in the priorities of property recipients. Thus, the risk remains that federal agencies could spend federal funds to procure property that they might have been able to obtain through the DOD disposal process.
DLA Disposition Services faces challenges processing excess property that has been turned in for disposal. DLA has established goals for processing times and modified some of its practices for processing this property, but some military customers still face long waits to turn in property and thus may incur costs for moving, storing, and maintaining property they no longer need. DLA officials said they plan to study this issue to identify and make needed improvements.

What GAO Recommends

GAO recommends that DOD further reassess its disposal process to determine whether additional changes are needed in the priorities of recipients within the process and revise its guidance reflecting those priorities, accordingly, to better fulfill the disposal program's objectives. DOD concurred with the recommendation.